Digitalized Process Innovation: Case Studies of Smart Factory Implementation

Abstract: The purpose of this study was to develop a framework that facilitate manufacturers in their journey of digitalizing production processes. The manufacturing industry is currently allocating significant resources to transforming production plants into smart factories, as the outcomes is estimated to be beneficial. To fulfil the purpose, the development of a framework for implementation was narrowed into investigating success factors, challenges and outcomes in implementation of smart factory, which has been formulated within two research questions. To achieve the purpose, case studies with five factories and one central unit at a leading truck and bus manufacturer. Cases were selected to capture rich and varied insights since both internal/external factories, successful/failed projects and new/existing factories were investigated. In total, six implementation cases over two continents, three countries and 31 interviews was held in a total amount of over 1800 minutes. The analysis of the collected data and a pattern-matching method resulted in an adaption and modification of a smart factory maturity model. Three aggregated dimensions corresponding to the research questions was found. First, the dimension of successful practices promoting implementation of smart factory constituted of eight general themes, for example the practice of uniting the organization through a mutual vision of smart factory. Second, eight barriers concerning restricting implementation of smart factory was found. An example of a barrier was difficulties in building a business case prior to implementation. Finally, the outcomes of implementation were many, but categorized into eight different groups where major quality improvement in all processes are reoccurring through the study. These were taken into consideration while developing the smart factory framework, that summarized key activities level-by-level to mitigate barriers and promote implementation with long-term benefits. In order to accelerate to the benefits in the next level of the smart factory maturity, an agile-stage gate model with iterative characteristics has been suggested, supporting smart factory as a radical process innovation. This study adds three concrete theoretical contributions to literature; (I) a framework for different maturity levels in smart factory, with corresponding key activities based on success factors, challenges and outcomes from smart factory implementation. Which has been missing in literature. (II) Tools for project management needs to be developed in order to implement smart factories, an agile stage-gate model inspired on Cooper (2008) has been suggested. (III) At start, the outcomes of implementation has shown to be adverse, but has been seen as necessary to reach all beneficial outcomes, which the study has confirmed to be vital for competing on the market.   By using the above-mentioned model in Figure 5 plant managers (or similar) are guided when they are about to start a smart factory transformation. The guide clearly informs that transforming into smart factory is not about just investing in new IT-systems, but explains the transformation complexity and the steps necessary to take for a successful transformation. But in order to gain the identified outcome of smart factory implementation within a relevant time frame, management need to use an accelerated model, an agile stage-gate model for smart factory described in Figure 6. The identified outcome of smart factory implementation will mitigate barriers when top management are making a valid business case for smart factory transformation.