Digital Transformation: Lessons from a Leader

Is your company’s information technology (IT) department your friend or your enemy? Does it work with you to identify, evaluate, and select the best new digital technology to make your job easier and your plant more efficient, or does it dictate what new solutions will be implemented with minimal input from people in the field? Does it help you find the resources needed to implement state-of-the-art processes or is it a black hole where hardware and software requests go to die?

If you’re not getting the service you desire from your IT department, perhaps your company could learn something from Dow. Yes, I know it’s a chemical company—or as it now calls itself, a material science company—but some of the lessons it has learned since 2016 while integrating digital technology into its operations could apply to power companies too.

Bringing IT and OT Together

Melanie Kalmar, corporate vice president, Chief Information Officer, and Chief Digital Officer with Dow, and Peter Holicki, Dow’s senior vice president of Manufacturing and Engineering and Environment, Health & Safety Operations, took the stage together at the ARC Industry Forum in Orlando, Florida, on Feb. 4 to explain how they have built a winning digital team. The two leaders said Dow has gone through a real transformation. They claim the company has brought IT and OT (operational technology) together to collaborate on digital solutions, and it sounds like a successful pairing.

“Clearly, it didn’t make any sense for us to work separately,” Kalmar said. “The manufacturing organization has deep knowledge and expertise. The IT organization has deep knowledge and expertise. We really needed to break down the silos between the two organizations to bring the deep knowledge and expertise together. We have so much to learn and leverage that it made a lot of sense to bring the two organizations together to work together.”

Kalmar acknowledged that there are fundamental differences between IT and OT. Personnel in the IT department can typically take an enterprise-wide approach and develop capabilities that fit a majority of the business-side functions—what she called “one-size-fits-most” solutions. On the other hand, operations personnel must often take a more customized approach, looking for solutions that fit site-specific needs.

Holicki noted that the two groups often speak different languages. “We speak a manufacturing lingo, operations lingo. [The IT group] speaks binary code—very hard sometimes for us to digest,” he said.

But the two groups also have common ground. At Dow, Kalmar said, both organizations were focused on delivering safety, reliability, and a better customer and employee experience through digital technology. Both of their teams also had a passion for creating something new and they were very eager to be pioneers.

The leaders knew they needed to develop a culture that would help make the partnership successful. They understood trust would be a key component. The collaboration was unlikely to be successful if the combined group wasn’t willing to try new things together, and even make mistakes together, without worrying about finger-pointing.

“We made it very clear that working together was the new paradigm and that working in silos would no longer be accepted,” said Holicki.

A Platform for Innovation

To spur innovation, Dow invested heavily in a new Digital Operations Center (DOC), which is located in Houston, Texas. Kalmar said the DOC is really the company’s “think tank” for the development and piloting of digital solutions for work within Dow’s manufacturing fence line. She said the initiative was a “first-of-its-kind partnership” between operations and IT. But the company didn’t stop there; it also brought in supply chain logistics and process R&D (research and development) groups to enhance the collaboration.

“We thought, if we need to deliver capabilities that connect across our sites, why not bring together the expertise across all of those functions, so we could look end-to-end,” Kalmar said. “I think the mindset we had was: Let’s put the facility in place and provide the room that we can bring all the right people with all the right skills together.”

Billy Bardin, Dow’s director of Global Operations Technology, who was a panelist in another session at the ARC event, agreed that collaboration among departments is important. “You have to have both your IT organization backing you with the infrastructure and the knowledge of how to deploy that accurately, and you have to have the operations and production organization being, first, willing to accept that technology, but also understand how it changes the work process. And so, both of those elements are required,” he said.

Adding Value

But Holicki was quick to point out that not everything that can be done, should be done. “One thing that’s very important is to have a value case,” he said. “If it doesn’t create value for your company, why would you pursue it?”

And when it comes to cost, Holicki said there is no limit to what could be spent in the digital space. “Literally, there is no limit,” he said to emphasize the point. “So, you need to have a strategy, and you have to have an underlying value proposition that really harnesses your willingness and the willingness of your people to spend money.”

Kalmar would do some things differently, if she had it to do over again. “I would have sent my teams out into operations a lot sooner,” she said. “Clearly, there’s nothing like seeing what’s going on with your own eyes to really help you better understand and internalize the differences and challenges—and the opportunities—that are out there to work together on.” ■

—Aaron Larson is POWER’s executive editor.