“The world is developing faster than ever.” We hear this sentence repeatedly today and experience it through innovations across different sectors. Especially when it comes to digital transformation in industry, we constantly hear the names of the same large companies. The reason we keep hearing their names is that these companies have managed to change the traditional business models that digital transformation has disrupted — or at least appear to have done so. But where do SME-sized businesses stand in this transformation?

“Digital tools provide significant benefits for companies and support better and faster access to information. By making communication between staff, suppliers and customers both faster and easier, they minimize time losses and reduce transaction costs. As digital transformation strengthens worldwide, companies — including SMEs — have the opportunity to reach a global market and maximize their recognition. But most importantly, digital transformation has become one of the most powerful factors opening the door to innovation in our era.”

I'm sure you are quite familiar with what is expressed in the paragraph above. But what does this content — the benefits of digital transformation — mean for the custom-manufacturing SMEs that are the focus of this article?

Looking at it broadly, these statements mean that no matter what we produce, how many employees we have, or how far our production processes are from automation, digital transformation is not a choice but a necessity for the company's survival. We must accept this reality; yet reports clearly state that we have not yet embraced it. If you want to see this in numbers, you can take a look at the reports and studies published by TÜRKONFED. Beyond data-proven facts, even a rough look at our own companies and the companies we know around us will not take long to reveal the truth. For example, let's look for the answers to the following questions:

  • Does my company perceive digital transformation as merely building a website or buying a piece of software?
  • How many of us hear from our management: “Our business is manufacturing; we are neither IT people nor developers, don't waste time on unnecessary things”?
  • In how many mid-sized production facilities is there a digital transformation department — and in how many small facilities is there staff seriously dedicating effort to digital transformation?
  • How many of us are aware of the difference between digital transformation and digitalization?

We could multiply such questions, but this is enough for now. The answers to these questions carry clues about the state of our company's digital maturity. Of course, there is also a systematic way to determine our level of digital maturity. For that, you can examine the image below.

Image: FutureGov — Digital Maturity Assessment

The image can be interpreted as follows:

  • I do custom, project-based manufacturing, and my assembly staff have pages of Excel and Word printouts in front of them. Then, without question, my digital maturity is at level 1.
  • I can access some production-related documents online, but we still track the bill of materials, for example, on printed paper. Then we are at level 2.
  • Alongside work documents, we provide some feedback to the system, collect data and can evaluate it. Then we are at level 3.
  • All the steps of our business processes have been fully digitally transformed, and our systems help and guide us on points we can improve. Then we are at level 4.
  • We have not only completed the transformation of our business processes — now all our staff understand the importance of this transformation, give feedback on transforming overlooked processes, and offer ideas to improve already-transformed processes. Congratulations! You are at step 5!

There may be other sources similar to the assessment scale we saw above, but the point I want to highlight here is more fundamental. As a company, our goal in digital transformation should always be level 5. Even if reaching level 5 seems impossible in our current situation, as we climb the steps one by one we can realize that this goal is in fact quite realistic.

So what will we encounter on our digital transformation journey? What should we be prepared for?

  • Cultural change
  • Integration of digital technologies into all layers of the company
  • A change in how we work and deliver value to our customers
  • Challenging the status quo, trying, failing and trying again
  • In other words, leaving our comfort zone

Suppose that, as an SME, we achieve a successful digital transformation — what tangible returns will this success bring?

  • Productivity will increase
  • Costs will decrease
  • A better customer experience will be provided
  • With the reliability gained in the data flows across company processes, precise evaluations will become possible
  • With the right transformation strategy, digital solutions will integrate into all company layers in a scalable way
  • Our staff will be able to focus on value-adding work

So how is digital transformation implemented in a business that does custom manufacturing, where every order is different from the previous ones?

I think we are all aware that there is no easy answer to this question. How does a production facility — without standard production processes, far from the automation opportunities of mass production, and with work steps that are sometimes done entirely manually — begin its digital transformation journey and continue it successfully? We will begin to convey the answer in the second part of this series. Until we meet again, may your days be digital…