Digital Factories are like what Transformation was to progressing a company or product to the next stage in their digital transformation evolution. The Digital Factory takes transformation to the next level of effectiveness. The concept of Digital Factories is not new, it’s just not as common however slowly picking up in popularity.

Digital Transformation initiatives, whilst great in practice, have had some bad press for not achieving their objectives.

This is where Digital Factories come in. They are ideal for new technology adoption, creation of minimum viable products (MVP), start-ups or departmental acceleration. Digital Factories can be as small as 10 people or as large as 50, but need to stick to the principle of remaining the lead in the overall delivery (people, process, systems). The Digital Factory group is made up a coach and scrum, with the group having the final say on recruits into the Digital Factory and the objectives.

Like any new business, digital factories can miss their creation target if not constructed correctly. Just like a production line, if not setup suitably for the objective or it’s not agile enough to flex to suit its purpose or changing business needs then whomever attempts digital factories will be wasting company resources.

Digital factories can be setup as incubators for a more modern and agile form of working, and refining it and then re-injecting the optimum culture and configuration back into the business unit to be more effective in their product creation. Alternatively, and equally suitable, Digital Factories can be a standalone cluster to serve a purpose (product or service development).

Whatever the approach, senior leadership of companies considering Digital Factories have to be clear on exactly what they wish their Digital Factory to achieve (deliver products faster or create capabilities or scaling) and accept that this would need a whole new set of rules, mindset or organizational construct and open to investing time and capital to research & develop the best Digital Factory configuration for their needs.

Culture and operating model of a Digital Factory are important factors that make a Digital Factory a success. The Digital Factory may be constructed for a specific purpose and exist in parallel to the broader organization structure. Digital Factories can also be dismantled and reconstructed for another purpose. Digital Factories should be setup as lean units.

Outsourcing software development and other components of a Digital Factory can be a suitable approach due to the nature of the flexibility and scale adjustments of an outsourcing model.

Digital Factories challenge the traditional corporate structure, in that is a model within a model and may not be conducive to most organisations, and will only succeed with top leadership buy-in.  Digital Factories are as applicable into the Fashion industry where they are created for specific products or specific markets where there is a defined project with specific success factors.