Digitization is everywhere in industry – how to keep the overview?

30 July 2019

Written by Hans Wortmann

Many industrial companies foresee investments in new digital technologies. What are the consequences of these investments for the work that has to be done? Where can improvements be encountered in productivity and speed in the work? This issue does not only concern blue collar work related to the material flow, but it concerns also office work. Each separate investment is supported by the promise of improvements, but how to keep an overview of all kind of applications which become more and more integrated? Just to mention a few examples, what is exactly the difference between CAD/CAE. ERP, PDM, APS and analytical applications?

In order to sharpen our view, keep in mind what these systems actually are essentially doing – their functionality, and what kind of work will improve due to these systems. It is worthwhile, to classify the work in industrial companies from the viewpoint of required functionality. A short summary is given below.

Classical functionality, such as delivered by ERP-systems, can be called transactional functionality. The work supported by transactional functionality consists of quick recording actions, such as accepting orders, shipment of goods, providing services or sending invoices. Often, a barcode scan is sufficient to post a transaction. Transactional systems should preferably be integrated, in order to allow simple and quick business processes to be established, which all use the same consistent and up-to-date data. All this is the promise of ERP systems.

Quite a different type of work requires document management functionality. In this type of work, employees are not engaged with many small and quick transactions, but they work many hours to create a document or a set of related documents. The obvious example is product development, where Computer-aided Design (CAD) or Computer-aided Engineering( CAE) applications are deployed. However, the same kind of work can b encountered in manufacturing engineering, in preparing quotations for complex machinery, in contract administration, etc. Management of status and versions of documents is allocated in the engineering world to Product Data Management (PDM) systems or Engineering Data Management systems (EDM). In the office world, MicroSoft Sharepoint is a good example.

Still another kind of work is executed by professionals who transform data in richer information, using analytical applications (“big data”), e.g. in marketing, quality control or service delivery. The key element of work is here not to process transactions or to create documents but rather to gain insight and prepare for decision making. Therefore, analytical applications are also captured under the header of Decision Support Systems. This work is similar to the work of logistics planners, with one essential difference: planners deploy completely different algorithms, typically supplied by Advanced Planning Systems, but often also encountered in spreadsheets. The work of logistics planners is concerned with setting priorities for physical goods flows. The same work happens in offices by business process management. Business process management may be supported by functionality of Work Flow Management Systems (sometimes called Case Management Systems).

By distinguishing these five types of applications for five types of work, it becomes more easy to assess what each investment may contribute to performance improvement. Transaction processing, document management, and analytical work are three types of work which lead to rather different requirements for support by applications. This also holds for the management of physical goods by logistics planners and the management of office work via business process management.

These five types of work and their enabling applications have different features. For transactional systems, data structures are important, whereas for professionals and managers the algorithms are much more important.

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