Early adopters of key autonomous components have shone a light on the surprisingly high amount of value available through comprehensive implementationsor, by contrast, the amount of margin value currently lost by running ineffectively, from a systems point of view. Healthcare providers/Hospitals: DX can lead to improved patient care thanks to digital technologies that assist doctors while reducing operating costs. WebMcKinsey Global Institute. Beyond these three keys for success, we found that companies with winning transformations have a better-funded and more robust approach to talent than others do. Engage technology-innovation managers (managers with specialized technical skills who lead work on digital innovations, such as development of new digital products or services) to support the transformation. The second is implementing digital self-serve technologies for employees, business partners, or both groups to use; transformation success is twice as likely when organizations do so. Two other keys relate to engaging the specific roles of integrators and technology-innovation managers, who bridge potential gaps between the traditional and digital parts of the business. For more information on McKinseys perspective on these disruptive technologies and Industry 4.0 in manufacturing, see Matthias Breunig, Jamie Cattell, Richard Kelly, and Dominik Wee, Industry 4.0: How to navigate digitization of the manufacturing sector, McKinsey & Company, 2015. CIO Office: Assembles the necessary teams, ensures coordination between them, and monitors every step of the DX by determining relevant KPIs. The building blocks are now in place, the technologies are available, and the required skill sets are coming into focus. This maturity model highlights the time needed to implement new technology and transform management systems, build workforce capabilities, and embed new behaviors. Use of automated continuous-mining techniques will make it possible to substantially increase labor productivity and to work in conditions that humans would not be able to tolerate due to heat and the risk of rock-face collapse. Actions taken today by executive leadership can maximize cash flow from downstream assets and move the plant toward renewable energy sources, thus helping meet the requirements and sustainability objectives. These plants react to asset health and economic conditions and progressively improve their operations over time to run with a lower carbon footprint as well as more safely and more profitably. But a few digital transformation ideas can The 21 keys to transformation success are the practices with the highest Shapley values. Leaders in transformation-specific roles ensure collaboration between their units and others across the organization when employees are working on transformation initiatives. The survey asked which of the following roles were engaged by the organization to support the execution of the digital transformation: initiative leaders, integrator roles, leaders of the program-management or transformation office, technology-innovation managers, chief digital officers, and coaches. Subscribed to {PRACTICE_NAME} email alerts. Yet, on the upside, construction holds much potential to stimulate recovery, thanks to its potential to create jobs; and in turn, recovery measures can support the sectors transformation towards sustainability and digitalization. McKinsey Each organization, with different needs, has a slightly different set of transition targets, but this is a crucial step towards organizational synergy. The journey toward the autonomous plant can also elevate workers capabilities to make tactical decisions that are clearly aligned with strategic initiatives for improved operational integrity, sustainability, and production. The online survey was in the field from January 16, 2018, to January 26, 2018, and garnered responses from 1,793 participants representing the full range of regions, industries, company sizes, functional specialties, and tenures. Traditional organizational silos will be broken down, with dedicated cross-functional teams assigned to key value-driving efforts. The division managers lay out their requirements to be successful for the task at hand. The autonomous plant: Entering a new digital As digital technologies dramatically reshape industry after industry, many companies are pursuing large-scale change efforts to capture the benefits of these trends or simply to keep up with competitors. A carefully determined combination of conventional technologies, AI, ubiquitous data, connectivity, and collaboration coalesce to consider potential future states of refineries or petrochemical plants when making operational decisions. Top Insurtech Trends & Technologies: In-depth Guide, you can check our data-driven and comprehensive list of digital transformation consultant companies, Top 7 Digital Transformation Best Practices for the Organizations, Digital transformation: 31 Case Studies and Success Stories, Top 10 Digital Transformation KPIs to Track Your Digital Evolution, Top 7 Technologies Automating the Oil & Gas Industry, Guide to Business Process Automation: Types, Use Cases & Best Practices, The Importance of Digital Center of Excellence (DCoE) In 2022. Please email us at: For more information on McKinseys perspective on mining productivity, see Ajay Lala, Mukani Moyo, Stefan Rehbach, and Richard Sellschop, , Discover how MineLens can provide data and insights to optimize mining productivity. Questia - Gale For more information on McKinseys perspective on mining productivity, see Ajay Lala, Mukani Moyo, Stefan Rehbach, and Richard Sellschop, Productivity in mining operations: Reversing the downward trend, May 2015. Redefine individuals roles and responsibilities so they align with the transformations goals. In this survey, the results suggest two primary ways in which companies with successful transformations are empowering employees to embrace these changes. Senior managers foster a sense of urgency within their units for making the transformations changes. Despite the pandemic, global spending on DX technologies and services was estimated to grow 10% in 2020 to $1.3 trillion. We asked respondents about seven structural changes their organizations had made since the transformations began (Exhibit 4). Gopal Chakrabarti is an associate partner in McKinseys Houston office, Dominik Don is an associate partner in the Munich office, Micah Smith is a senior partner in the Dallas office, and Premal Vora is an associate partner in the Atlanta office. Clean electricity generation, network infrastructure and end-use sectors are key areas for increased investment. require action by governments, investors, and industrial players. digital transformation in real estate, feel free to check our article. Beyond these factors, an increase in data-based decision making and in the visible use of interactive tools can also more than double the likelihood of a transformations success. While respondents say that many digital transformations fall short in improving performance and equipping companies to sustain changes, lessons can be learned from those who report success. key to success is leadership commitment. strategy as the industry navigates new challenges. They wish to thank Cristy Chopra, Carolyn Dewar, Julie Goran, and Michael Krsi for their contributions to this work. Subscribed to {PRACTICE_NAME} email alerts. People in these roles help foster stronger internal capabilities among colleagues. 1 Based on our benchmarking, we observe a global average overall equipment effectiveness (OEE) performance of 27 percent for underground mining, 39 percent for open-pit mining, and 69 percent for crushing and grindingcompared with 88 percent for upstream oil and gas, 90 percent for steel, and 92 percent for oil refining. Sorry, we couldn't find any results. Never miss an insight. First, the physical technology required for automation provides the real-time flow of information that forms the foundation for better insights. Although the energy transition creates an imperative for companies to increase the resilience of their operations, it also presents strong headwinds for the industry. We outline these opportunities and raise several key questions that miners should ask themselves as they navigate the journey. A third key to success is people in key roles ensuring that their own units are collaborating with others when working on transformations. having the right, digital-savvy leaders in place, building capabilities for the workforce of the future, giving day-to-day tools a digital upgrade, communicating frequently via traditional and digital methods. For example, in refining, digital twins are often implemented to update planning models and monitor key equipment. Please email us at: McKinsey_Website_Accessibility@mckinsey.com. Note(s): Worldwide; June 9 to June 19, 2020; 2,395 respondents; representing the full range of regions, industries, company sizes, functional specialties, and tenures. However, company leaders must pay equal attention to the interplay between the new technology and management systems and behaviors and capabilities. Our research shows that all plants, irrespective of their maturity levels, are primed to identify and adopt digital technologies to move toward autonomy. Digital Transformation This might seem counterintuitive, given that a broader suite For one, organizations tend to look inward when making such changes. McKinseys recent report, Net-Zero Europe: Decarbonization pathways and socioeconomic implications, illustrates some of the Recent infrastructure upgrades, such as secure 5G site-level networks, have dramatically changed data-management capabilities and reduced cybersecurity risks, and they now allow for integrated, automated solutions to be deployed. To make commensurate comparisons of each practices impact on the likelihood of transformation success, Total Unduplicated Reach and Frequency (TURF) and Shapley value analyses were run. You can also check our other articles on DX: If you have further questions please do not hesitate to contact us: Cem has been the principal analyst at AIMultiple since 2017. The mine is following an aggressive timetable to achieve full implementation by 2025, at which point the mines operating costs have the potential to be as much as 30 percent below those of a traditionally operated deep-underground copper mine. The 3-D modeling data these robots provide to the control module on the surface can inform the real-time mine-planning and reconciliation approaches used for the mines development, and also avoid the dangers and delays of sending geologists to the just-blasted mine face. Mining operations often take place in extreme environments and in far-flung locations. Across the industry, comparable application of advanced-analytics approaches to drive yield improvements for commodities with similarly complex ore-processing operations, such as copper, nickel, phosphate, and platinum, could translate to roughly $20 billion to $50 billion per year of additional earnings before interest, tax, and depreciation. The organizations objectives should be a step-by-step process and business may fail because of actions taken with haste. Thus, we see it as a natural destination; the question is how long it will take to get there and to navigate the journey successfully. The survey tested for best practices in a digital transformation by using different types and structures of questions. About Us; Managing Partners; Valenta Growth Labs; Franchise; Digital transformation is dramatically impacting on every single industry world-wide including healthcare, financial services and banking, telecommunications, human resources, insurance and more. WebU.S. https://www.mckinsey.com 915b5091-0d7e-44d2-a8c4-cf08267e52fe Skip to main content Finally, production-improvement recommendations will be generated dynamically, driving real-time efficiency increases and product-ratio optimizations, all while maintaining stability and meeting sustainability goals. The survey asked which of the following roles were engaged by the organization to support the execution of the digital transformation: initiative leaders, integrator roles, leaders of the program-management or transformation office, technology-innovation managers, chief digital officers, and coaches. This analysis was carried out by determining the proportion of respondents agreeing with or selecting at least one practice, then calculating the incremental value of including or excluding each practice. When senior managers and initiative leaders use new digital channels to reach employees remotely, the rate of success is three times greater. 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