Massimiliano Claps
Max Claps (Research Director, IDC Government Insights)

How the Convergence of Digital Transformation, Elevated Customer Expectations and Societal Purpose Is Reshaping Enterprise Operations

The world has moved fast in recent years. Digital is embedded in every product and service, enabling connected end-to-end personalised experiences that go beyond functional requirements.

Policy makers and customers are also demanding that companies meet higher standards of societal purpose, such as environmental sustainability, ethical use of data, and diversity and inclusion.

In this new context, chief operating officers (COOs) must collaborate with other key executives, such as chief digital officers, chief innovation officers, chief information officers and chief technology officers, to reimagine lights-out operations strategies and action plans.

COOs have pursued lights-out operations strategies for over 10 years in industries such as manufacturing and information technology. The concept usually refers to factories or datacentres that can be operated in an automated manner — almost without humans on site — that require light to carry out some of the processing, tooling, maintenance or quality control tasks.

The pillars of these lights-out operations are engineering concepts such as design for manufacturing and technology-centric automation:

  • Manufacturers have designed products for minimal parts, standard materials, modular assemblies and streamlined processes. In this way, factory operations can apply higher and higher levels of automation, eliminate bottlenecks and enable more granular remote visibility. As a result, they reduce costs, improve quality, reduce time to market, and enhance reliability and safety.
  • Services are designed to minimise the cost and increase the quality of operations. Think of a logistics service provider that has sized the storage system, the loading docks and the connection to the transportation infrastructure to accommodate large lorries that can maximise load factors. Or a hospital that has architected its medical imaging department layout and processes for a high throughput of patients from internal specialist wards, such as the emergency room, neurology, oncology or orthopaedics.

The Near Future of Lights-Out Operations

With the advent of digital, products and services have become smart and connected. They offer new functionality, greater reliability and higher utilisation through new capabilities and new “as a service” business models.

Digital also means products and services have become increasingly dematerialised, driving customers’ expectations for convenient access to products and services whenever and wherever they like.

This has driven customer demand for personalisation and faster speed to market. It has increased the influence the customer — through social or collected through IoT (Internet of Things) and analytics that analyse usage patterns — has on product and service design.

At the same time regulatory and customer demands for environmental sustainability are pushing chief operating officers to source sustainable materials, reduce energy consumption and reduce the environmental footprint of products and services from design to disposal.

In this new context, operations have become much more complex. Testing and quality control of products that have hundreds of digital components (think of a connected car), instead of only mechanical parts, require many more iterations and a much wider variety of skills.

Running a logistics service provider’s operation that needs to respond to demand for same-day deliveries, frequent returns, and personalised pickup and drop-off points requires smaller trucks, new route optimisation algorithms and collaboration with competitors to operate joint routes.

Running a medical imaging operation in a healthcare system — with more patients taken care of at home or in community clinics, and visiting the hospital’s medical imaging centre only for preventive or follow-up testing — requires organisations to reimagine scheduling and maintenance.

In the near future, lights-out operations will not only be about passively improving visibility, eliminating bottlenecks and automating the existing processes.

They will primarily be about a fundamental change that involves design, engineering, customer experience and operations experts. This is a fresh style and mindset that requires organisations to work iteratively from the bottom up with distributed teams and intelligently embed insights from customers and other external sources that were not even considered until recently.

It’s about building resilience to tackle unexpected events. It’s about embracing new tools, such as digital twins, edge computing and augmented reality, to improve agility to meet customer demands with operational efficiency and sustainability.

 

To know more about the future of lights-out operations, join IDC experts and peer COOs, CTOs, CDOs and CIOs from around Europe at the IDC Future of Operations Summit 2022.

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