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Procedia Computer Science 170 (2020) 664–671

The 3rd International Conference on Emerging Data and Industry 4.0 (EDI40)
The 3rd International Conference on Emerging
April 6-9, 2020, Warsaw, Data and Industry 4.0 (EDI40)
Poland
April 6-9, 2020, Warsaw, Poland
Developing Digital Transformation Strategy for Manufacturing
Developing Digital Transformation Strategy for Manufacturing
Saeed Albukhitan*
Saeed Albukhitan*
Institute of Data Semantics
Jubail Industrial
Institute City, 31961,
of Data Saudi Arabia
Semantics
Jubail Industrial City, 31961, Saudi Arabia

Abstract
Abstract
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fast development,
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the will be discussing
strategy tailored tohowthe
nature of the manufacturing
manufacturing could develop sector.
a digital transformation strategy that including a different aspect of the strategy tailored to the
nature of the manufacturing sector.
© 2020 The Authors. Published by Elsevier B.V.
© 2020 The Authors. Published by Elsevier B.V.
This
© is an
2020 open
The accessPublished
Authors. article under the CC B.V.
by Elsevier BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Peer-review
This is an under
open responsibility
access article of
under the
the
Peer-review under responsibility of the ConferenceConference
CC BY-NC-NDProgram
Program Chairs.
license
Chairs.(http://creativecommons.org/licenses/by-nc-nd/4.0/)
Peer-review under responsibility of the Conference Program Chairs.
Keywords: digital transformation strategy; digitalization; Industry 4.0; manufacturing;
Keywords: digital transformation strategy; digitalization; Industry 4.0; manufacturing;

* Corresponding author. Tel.: +966- 13-3574586; fax: +966-13-3585000.

* E-mail address:author.
Corresponding albokhitan@gmail.com
Tel.: +966- 13-3574586; fax: +966-13-3585000.
E-mail address: albokhitan@gmail.com
1877-0509 © 2020 The Authors. Published by Elsevier B.V.
This is an open
1877-0509 access
© 2020 Thearticle under
Authors. the CC BY-NC-ND
Published license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
by Elsevier B.V.
Peer-review
This under
is an open responsibility
access of the Conference
article under CC BY-NC-NDProgram Chairs.
license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Peer-review under responsibility of the Conference Program Chairs.

1877-0509 © 2020 The Authors. Published by Elsevier B.V.

This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Peer-review under responsibility of the Conference Program Chairs.
10.1016/j.procs.2020.03.173
 Saeed Albukhitan / Procedia Computer Science 170 (2020) 664–671 665
2 Saeed Albukhitan/ Procedia Computer Science 00 (2020) 000–000

1. Introduction

In recent years, Digital Transformation (DT) has appeared [1] as an important phenomenon research topic related
to companies. Digital Transformation is the integration of digital technologies and new business models into all
areas of resulting in major changes to how industries function and how they provide value to customers [2]. DT
incorporates the changes taking place in the world and industries through the use of digital technologies [3]. In order
to produce the capability to generate new paths for value creation in the digital era, there is a need to have different
culture, processes, structure, and strategies [4].
Most of the benefits in manufacturing from digital transformation could be summarized under five groups. First
benefit related to improvement in productivity where the development and design processes are faster and better
informed using tools such as augmented reality (AR) and 3D printing by leveraging interactive data from users in
real-time. Improvement in production with minimal downtime could be achieved due to better machine connectivity
by sending vital maintenance data that can help to prevent machine faults and enhance output. The second one is
related to quality with the high-resolution measuring of production parameters and products throughout the entire
process. New machine learning tools for quality assessment of the products [5] are applied to production data to
automatically indicate quality defects root causes and predict waste-related issues before they occur. The third
benefit related to cost where data capturing and analyzing the manufacturing process across all stages, including
machine data, production line, transportation, and logistics. This analysis helps to identify cost reduction
opportunities and better management of inventory to meet demands while machines offer a high level of flexibility
that allows for fast alterations between products. The fourth benefit related to having more product customization,
which is an important selection factor for customers [6]. Manufacturing lines with digitalization can offer customers
customization with attractive options while still producing on a big scale and efficiently with competitive prices. The
last and very most important aspect of manufacturing is related to safety [7] at workplaces in which hazardous tasks
can be performed by robots. Staff can be notified about the potential and possible hazards in advance by making use
of installed sensors throughout the workplace.
Digital transformation strategy is seen as a structured and formal plan that directs a company throughout its
digital transformation journey [2]. It thus extends the practical analysis and discusses the benefits and risks
associated with digital technologies comprehensively. The distinctive essence of being inclusive of all business
segments and the characteristics of the organization includes multiple coordination mechanisms: first, alignment
with the business strategy; and second, alignment with other operations.
In this paper, we will be discussing how manufacturing could develop a digital transformation strategy that
includes different aspects of the strategy tailored to the nature of the manufacturing sector. The rest of this paper is
organized as follows. Section 2 reviews the digital transformation of valuable players for manufacturing. Section 3
presents the challenges faced by manufacturing in implementing digital transformation. Section 4 presents the
guidelines for strategy development. Finally, we summarize the paper and highlight the future work directions in
Section 5.

2. Digital Transformation Valuable Players for Manufacturing

In this section, we list some of the most common valuable players and use cases of the digitalization in
manufacturing. In the introduction, we have mentioned categories for those benefits and in this section will briefly
elaborate on the top use cases that help Manufacturing to benefit from digitalization technologies and initiatives. The
first digitalization valuable player for manufacturing is the Additive Manufacturing [8] which is commonly referred
to as 3D Printing. The additive manufacturing combines a wide variety of processes and materials that share a
common feature of translating 3D data directly into the physical realm. This mode of production enables design
flexibility that has never been possible before, and as this technology advances, we are witnessing the proliferation
of applications in sectors like, but not limited to medical, automotive, aerospace, and lifestyle.
Asset Performance Management (APM) [9] is another use case and common player for manufacturing and being
offered by most of the digitalization solution providers as a standard product. With the emergence of Industry 4.0,
APM includes a wider range of functions due to the possibility to do data analytics, the ability to get equipment from
OEM and integrate data from multiple plants and sites. APM provides several tools to improve the equipment and
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plant availability of manufacturing equipment. APM tools gather, consolidate, visualize, and then analyze collected
data from all equipment. APM helps predictive forecasting, condition monitoring, and reliability maintenance of
equipment systematically and easily. Industrial Internet of Thing (IIoT) [13] is evolving at a rapid pace as
manufacturers are realizing the huge potential of this technology approach to completely change the way they
operate. Some of the leading use cases of Industry 4.0 are predictive maintenance, condition/status monitoring,
digital twin, data-based research and development, and fleet management.
Analytical insights of Associated Products and Services [11] enable customers to monitor their
machines’ consumption patterns and improve operations by optimizing replenishment schedules. Another example is
predictive maintenance services, which help customers reduce machine downtimes and lower maintenance costs.
Remote ordering services give customers the ability to verify stock and offer restocking from anywhere via
applications. Appliance manufacturers can also leverage data insight from appliances and switch to on-demand
production and inventory management.
Cloud Platforms [10] are new technologies for creating and hosting application as compare with the client-server
methodology. This new technologies for creating and deploying application has numerous advantages over client-
server in term of management and maintenance cost. It is much cheaper and faster to acquire additional processing
power if needed as compared to client-server methodology. Edge Computing [12] improves in processing power
allowing more tasks to be handled by user end-devices. This reduces latency by reducing the load connected to the
Internet of Things and the cloud, reduces data security risks, and reduces delivery costs. This processing ability
opens many possibilities within the scope of the Internet of Things such as avoiding obstacles, language processing,
object detection, face recognition, and other machine learning applications. Fog computing [13] inhabits the distance
between the Internet of Things endpoints and the cloud. In other words, Fog computing is a network that connects
data entry points and cloud machines where that data is stored. Fog is a midway processing area that takes care of
data from the edge and manages tasks that do not require cloud machines but cannot be handled by edge devices.
Advanced Analytics and Machine Learning [14] is one of the industry's most important digital applications. It can
receive and analyze continuous updates from sensors and other data collection points in real-time - and be able to
respond with immediate action. In this way, machine learning a very powerful mean in leveraging the IoT for
industrial applications. By using machine learning and predictive maintenance, staff will be able to understand the
behavior and performance of machines in setting up manufacturing as algorithms adapt based on new information.
This allows us to identify unusual behaviors and to predict errors and malfunctions with high accuracy.
Open Process Automation [15] aims to provide a new and open architecture of automation solution that is flexibly
adapted for industrial application and non-installation application scenarios. Many of the automated manufacturing
are control using a Distributed Control System (DCS) or Programmable Logic Controllers (PLCs). Those types of
controllers are inconvenient for the new technology trend since their architecture is suited for traditional control.
Also, it is difficult to make changes in those systems since they are very dedicated to a specific production facility.
The use of robots [16] in industrial manufacturing is common today with approximately 2 million industrial
robots operating around the world. The motivation behind robots is high due to their competency what they are
offering since they can do monotonous, unpleasant, and dangerous work instead of humans. Internet of Robotic
Things (IoRT) takes technology to the next level and will be a major part of the manufacturing future. Robots used
in production will be provided with instantaneous data that will be used to make decisions regarding synchronization
and performance on the factory floor. IoRT will allow manufacturers to better meet and exceed customer's
requirements of their and react accurately to deviations in the supply chain.

3. Digital Transformation Strategy

A well-defined digital transformation strategy is critical for the overall success of digital implementation in a
manufacturing setting. The strategy should cover every aspect of business activity – from development and
production to advanced quality control, delivery, and analysis.
The state of the company’s legacy systems should be taken into account to identify potential challenges. As much
data as possible should be collected from the machines in their current and past states before the implementation of
the new system begins.
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3.1. Digital Transformation Challenges in the Manufacturing Industry

For manufacturing organizations to effectively embrace digital technology, it is critical to understand the
challenges they face along the digital transformation journey. The roadmap for digital transformation includes
several challenges that need to be addressed and handled. Here are some of the challenges to look out for when
implementing digitalization in manufacturing shown in Table 1 below.

Table 1. List of Top Challenges Faced by Manufacturing for DT.

Challenges
Traditional Processes
Resistance to Change
Legacy Business Mode
Limited Automation
Budget restrictions
Absence of relevant
knowledge
Inflexible company structure
Security
Description
With everything connected digitally, it is challenging to rely on traditional
paper-based processes and operate in silos; there is no longer a place for
manual, time-consuming processes.
Where does the organization sit on change? Most employees are so
entrenched in traditional processes of daily duties that, when the time comes
to improve processes and incorporate new technology, they resist. They see
change management as a challenge to their roles/responsibilities, at best,
and a threat to their job security, at worst. Many people resist change to
their work environment since it affects their comfort zone and since digital
disruption is experienced as a threat to many employees in manufacturing.
Manufacturers have become very comfortable in their legacy systems.
Many repetitive, redundant and time-consuming tasks are performed
manually by a task force that consumes a huge number of man-hours which
results in high cost.
A substantial investment is required to lead a manufacturing facility through
the digital transformation journey. The benefits are multiple, both short and
long-term, but it is important to remember that each company is different,
especially when it comes to systems of revenue and cost.
Without relevant knowledge, the introduction of technology alone is not
enough to make it work. Enhancing employees’ knowledge is an essential
part of integrating digital technologies into manufacturing
The introduction of industrial internet of things (IIoT) to a manufacturing
site is similar to the other transformation task and it is more than just small
improvement. There is a need for the organization to have new technologies
and business models to work properly. Although this may be scary, it can
lead to a lot of positive results as the organizational structure is reset and
retested, creating an opportunity to improve employee status and other
improvements.
Cybersecurity is a major concern for any digital transformation project since
the operation network and systems will be exposed to the internet.

3.2. Digital Transformation Challenges Resolutions

To implement DT in manufacturing the outlined challenges in the previous section need to be mitigated
systematically the reduce the risk of failure or delay of DT implementation in the manufacturing site. Table 2 below
suggest some of the good recommendations for each challenge.
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Table 2. Recommendations for Mitigation of Manufacturing Challenges Related DT.

Challenges Recommendation
Traditional Processes Manufacturers need a modern and agile digital solution that replaces outdated and
error-prone paper-based processes and converts them to digital
Resistance to Change 1. Organizations should have the best digital solution in place to reduce time-
consuming processes, improve employee efficiency and reduce job stress by
enabling access to work from anywhere, anytime, regardless of location.
2. High Commitment should start with executive management and be passed onto
individual employees as part of the digital transformation process.
3. Transparency and effective communication are essential to get everyone motivated
about the potential of this new technology.
Legacy Business Manufacturers need to leave their comfort zone, revamp their business model, and
Mode proceed ahead for more efficient and faster time-to-market business processes by
employing digital technology that provides exceptional efficiency within their existing
legacy systems
Limited Automation Organizations can automate or reduce manual tasks, allowing for faster product updates
and response times by embracing the right digital solution.
Budget restrictions 1. Proper planning for the investment process is required and no two digital
transformation programs are similar.
2. Having a long-term vision is important for reaching a truly valuable goal down the
line with a big picture in mind
3. Solutions with a solid ROI should be selected and considered as a proof-of-concept
(POC)
Absence of relevant 1. In the case of the company's existing expertise are not sufficient, it is necessary to
knowledge consider collaborating with external consultants or hiring new employees.
2. The responsibility for IIoT introduction should be a shared goal by the whole
organization and not limited few employees or departments.
Inflexible company One methodology is to compile teams from multiple disciplines including engineers,
structure product designers, data analysts, and service professionals as the focal teams for the
digital transformation. The team will nurture new technologies, implement POCs, and
then roll out successful iterations to the company after they’ve been approved.
Security 1. Vulnerability issues should be recognized and documented
2. Several protection layers and fail-safe mechanisms need to be deployed to ensure
that the system is completely safe and secure.

4. Digital Transformation Strategy Development Steps

Based on the challenges and their suggested resolution recommendations that were discussed in the previous
section, a guideline for Digital Transformation strategy development could be established in steps.

4.1. Creation of Digital Transformation Vision and Objectives

In the initial step, organizations must outline their vision and objectives for implementing digital transformation.
But instead of focusing on the problems they are trying to solve with innovations, they should look at their ultimate
goal and what they want to achieve. They should define long-term goals and focus more on the experience they want
to have with their clients and employees. It is necessary to reach a global vision for the future. On the other hand,
this vision must deal with reality. Therefore, organizations need to build a strategic vision about the goals and short-
term resources available with their businesses today. Organizations must focus on their competitive advantage, then
identify gaps in the current structure and create implementation roadmaps to improve them.
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When adopting new technologies, organizations often make two mistakes. They approve any technology that is
adapted by the innovation department or the IT department or is made by other departments. This may include new
applications approved by competitors and other players in the industry. Second, they begin with their capabilities or
ecosystem and they simply start improving without having global goals or specific problems that they want to solve.
These errors can lead to the adoption of isolated and silo technologies, which are difficult to integrate and extend
throughout the organization.
Organizations should start first by defining their objectives and vision they want to accomplish through Digital
Transformation. It should include the definition of successful transformation and its implication to their overall
business and their customers concerning customer experience and engagement. By establishing the objective,
organizations can adopt technologies with a clear emphasis on business improving instead of limited improvement
of individual processes. This will help in developing a comprehensive strategy that involves and transforms the
entire organization and also avoids the silo adoption of technologies.
The current status of the company should be taken into account when developing a strategy for digital
transformation. A good practice is to set objectives and targets for five years. The organization should start with
goals with the most significant ROI as a top priority. A good approach to launching a digital transformation in
manufacturing is to identify improvement opportunities in the performance that will result directly or indirectly in
significant benefits to the customer and employees. This emphasizes areas such as the operations, engineering,
supply chain, customer service, and support as well as the business model itself.

4.2. Assess the Organizations Digital Transformation Capability

In the first step, we have defined what the organization wants to achieve through digital transformation. In this
step, we assess where the organization is now with respect to digital transformation. The organization should assess
its infrastructure and investigate how well its system, software application, and tools in addressing current and future
needs. The organization has to discover the critical components required for its DT strategy, areas that require to
develop new functionality, and the necessary integration that bring them all together. This assessment will support
the organization to find out what technology to be updated, processes that need to be automated or optimized, and
set tools that should be changed. As a consequence, the organization will select tasks, investments, and efforts in the
digital transformation strategy in the best possible way.
A good tool for this assessment is to perform market analysis and benchmarking of the organization with
emerging and existing organizations of similar industries. This could be achieved with a consultant firm that has
more exposure to the market and similar industries. Before making any digital transformation effort, carry out a
profound analysis of the market dynamics. Because of rapid technology development and industry changes, this step
is essential for creating a relevant and up-to-date strategy. Not long ago, the largest yellow cab company in NY,
which was a leader for ages, turn bankrupt because of Uber as a competitor. Today, almost every organization in the
automotive industry invests in self-driving technologies and electric cars. Otherwise, they risk dragging behind. As
the boundaries between industries continue to blur, companies can find practical solutions and a massive portion of
inspiration in other fields.

Figure 1. Digital Maturity Levels

Digital maturity assessment is a common methodology done by most of the consultants [17], which include
several dimensions such as strategy, leadership, operations, culture, people, products and technology. Digital
670 Saeed Albukhitan / Procedia Computer Science 170 (2020) 664–671
Saeed Albukhitan / Procedia Computer Science 00 (2020) 000–000 7

maturity level in each dimension need to be assess based on a scale from one to five with five as highly mature as
shown in Figure 1.

4.3. Design the End User and Employee Experience

Once the organization created a vision and assessed its current status of digitalization, it is time to develop a type
of experience for its employees and customers. Digital transformation values and prioritizes customer experiences as
much as it adds and introduces new capabilities and functions. The organization must concentrate on the experiences
they want to provide their employees and customers instead of concentrating on the need for new solutions and the
limitations of existing technologies.
After the development of high-level DT objectives, detailed goals are required to be developed at this stage.
These goals could include the simplification of employee’s work and ease of through new applications, functions, or
systems. In addition, it should include how to improve customer access to a company’s product and services catalog
with a more attractive shopping experience through the use of mobile or web applications. Good use cases to help
employees with better engage, collaborate and interact with each other. Also, new digital platforms and technologies
for customers interface. The focus is not on the new application or technology but on the experience, they will
provide to customers.

4.4. Review and Select Solutions and Vendors

The next step in the Digital Transformation strategy is the assessment and selection of candidate solutions to
meet the developed objectives, deliver the anticipated experience, and close the gaps of current technologies.
This step requires the organization to perform a thorough and careful evaluation of candidate solutions and
offerings from different technology providers. The provider solutions should be accessed based on their capabilities,
functionalities, proven deployment records with provider accomplishment and reputation. An important factor for
the selection of technology providers is the capability of after-sales support with the required response time with the
required competences. A good tool to use a comparison matrix of solutions and vendors with their DT capabilities,
which will help the organization with an objective tool for making informed and better decisions.

4.5. Creation of Implementation Roadmap

The final step is to compile the overall business digital objectives, anticipated experiences, current technologies,
potential solutions then unified them into an actionable plan. Developing a digital transformation initiative require
time and resources from human and capital. This is one reason for DT often done in stages. It is important to plan
carefully for each action such as vendor meeting and technology assessment, should be taken to ensure the required
availability of human and capital resources. A plan with a timeline will help organizations ensure the smooth
implementation of the DT initiative.
An implementation schedule will also help the involved and related stakeholders, from top-level executives to
rank-and-file employees and customers, to provide required support for the Digital Transformation initiative and
minimize disturbances in exiting business operations. A Digital Transformation project, like any other project to
ensure its success, it needs continuous support from every related stakeholder of the organization. Also, an
implementation schedule makes it possible for the organization to benchmark and compare actual results with
planned results. It also aids the project leaders in governing and managing the project.

4.6. Adjust Organization Culture and Infrastructure

The last step in the digital transformation strategy development is the preparation of the infrastructure. Initially,
the organization must create a dedicated group of digitally qualified experts and create specialized leadership such
as a digital officer and other qualified professionals to ensure a successful transformation. External support is
required if existing human resource is not available with the in-house team by hiring a reliable partner to implement
the digital strategy for your company effectively. It is very important to develop the team with required skills for
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future changes though launching of training, qualification upgrades or hires outside agencies. It is significant to
make digital transformation an essential part of the company’s high-level objectives.

5. Conclusion and Future Work

We presented a guideline for developing a digital transformation for the manufacturing sector by starting to
address all challenges faced by manufacturing in the journey of the transformation. We have suggested some
recommendations to handle those challenges.
Those challenges are generic ones for most of the manufacturing industry. There could be limited and specific
challenges for the subcategory of the manufacturing industry such as oil/gas, chemical and petrochemical, and metal
industries. In future studies, we would consider those industry-specific challenges and list some of the uses cases
related to those industries.

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