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They follow from the time spent multiplied by the hourly wage of the employees involved.",{"type":598,"children":611},[612],{"type":529,"children":613},[614],{"type":532,"value":615},"Storage costs for physical documents.",{"type":598,"children":617},[618],{"type":529,"children":619},[620],{"type":532,"value":621},"Administration and organization effort around paper documents.",{"type":598,"children":623},[624],{"type":529,"children":625},[626],{"type":532,"value":627},"Error and opportunity costs.",{"type":529,"children":629},[630],{"type":532,"marks":631,"value":632},[555],"What do error and opportunity costs mean here?",{"type":529,"children":634},[635],{"type":532,"value":636},"Error costs arise when text-heavy documents are misinterpreted, operational steps are carried out incompletely as a result, and scrap and rework follow. Opportunity costs are the profits foregone: whoever sticks with paper-based processes gives up what digitalized processes deliver, above all higher efficiency and productivity. Add up all these factors and you arrive at a substantial sum. It becomes clear that beyond paper costs, many other inefficiencies drive unnecessary spend.",{"type":529,"children":638},[639],{"type":532,"marks":640,"value":641},[555],"Can you give us concrete examples?",{"type":529,"children":643},[644],{"type":532,"value":645},"One large block is non-value-adding work by operational staff. I am thinking of media breaks that appear when employees create and maintain checklists and inspection records, for example during commissioning processes. In many companies this still happens in Word and Excel documents. As soon as documents need to be available in several languages, standardized across plants, updated and versioned whenever something changes, the handling effort becomes significant. Once commissioning documentation is complete, the paper documents are scanned back in and filed in SAP, often hundreds of pages. When questions come up, the employee searches the physical document manually. That is time-consuming, error-prone, and creates high search effort. With the shortage of skilled workers, freeing manufacturing employees from this kind of work matters. It raises their productivity and their personal well-being, because they apply their skills where value is created.",{"type":647,"children":648},"blockquote",[649],{"type":529,"children":650},[651],{"type":532,"value":652},"Digitalization offers far more opportunity than simply getting rid of the paper stacks. Stefan Philipp, Head of Solutions, Operations1",{"type":529,"children":654},[655],{"type":532,"marks":656,"value":657},[555],"What other concrete cost drivers exist besides non-value-adding activities?",{"type":529,"children":659},[660],{"type":532,"value":661},"Longer response times when errors occur. If an employee identifies a fault or defect that needs a fast fix or an immediate word with their supervisor, in many companies they have to leave the machine or fall back on phone, smartphone, or paper. That creates unnecessary walking time, long response times, and operational cost. Digital task management cuts this communication effort down considerably. The employee assigns a task directly to a supervisor or colleague and resolves the issue in real time.",{"type":529,"children":663},[664],{"type":532,"marks":665,"value":666},[555],"What approach do you recommend to companies that want to examine their true costs more closely?",{"type":529,"children":668},[669,671,684],{"type":532,"value":670},"The important part is drawing the right conclusions. That means taking an argument such as higher error rates and checking individually what it costs when quality data goes unanalyzed. Based on that assessment, you look for solutions that unlock the untapped potential. For quality, that can mean using ",{"url":672,"meta":673,"type":680,"children":681},"https:\u002F\u002Foperations1.com\u002Fen\u002Fsoftware\u002Fdigital-inspection-documentation",[674,677],{"id":675,"value":676},"rel","noopener noreferrer nofollow",{"id":678,"value":679},"target","_blank","link",[682],{"type":532,"value":683},"digital inspection documentation software",{"type":532,"value":685}," instead of capturing measurements on paper and evaluating them manually later.",{"type":647,"children":687},[688],{"type":529,"children":689},[690],{"type":532,"value":691},"Digitalized processes reveal savings potential in the six- to seven-figure range. Stefan Philipp, Head of Solutions, Operations1",{"type":529,"children":693},[694],{"type":532,"marks":695,"value":696},[555],"How much can companies typically save by digitalizing manufacturing processes?",{"type":529,"children":698},[699,701,709],{"type":532,"value":700},"Typical savings potential is six to seven figures. That depends on the use case, the size of the company, and how acute the current challenges are, for example high scrap rates caused by faulty process execution. A striking example of seven-figure savings comes from our customer ",{"url":702,"meta":703,"type":680,"children":706},"https:\u002F\u002Foperations1.com\u002Fen\u002Fcompany\u002Fcustomers\u002Fsuccess-story-polipol",[704,705],{"id":675,"value":676},{"id":678,"value":679},[707],{"type":532,"value":708},"POLIPOL",{"type":532,"value":710},", a leading upholstered furniture manufacturer. Growing product variety and opaque paper-based processes made it hard for the company to sustain its quality and productivity.",{"type":529,"children":712},[713,715,723],{"type":532,"value":714},"Removing paper and digitalizing all manufacturing processes eliminated a large share of non-value-adding activities. Annual savings potential came to more than 2.2 million euros, alongside a 67 percent reduction in training time for new employees. Moving toward ",{"url":716,"meta":717,"type":680,"children":720},"https:\u002F\u002Foperations1.com\u002Fen\u002Fuse-cases\u002Fpaperless-manufacturing",[718,719],{"id":675,"value":676},{"id":678,"value":679},[721],{"type":532,"value":722},"paperless manufacturing software",{"type":532,"value":724}," pays off well beyond the printing costs saved.",{"type":529,"children":726},[727],{"type":532,"marks":728,"value":729},[555],"What is your closing advice for companies setting out toward digitalization?",{"type":529,"children":731},[732,734,742],{"type":532,"value":733},"Beyond choosing the right technology, which deserves solid research, the principle \"think big, start compact\" helps during implementation. You do not have to start across the full breadth of the organization. You can open up use cases one after another. In our experience, it pays to begin with high impact use cases such as maintenance or ",{"url":735,"meta":736,"type":680,"children":739},"https:\u002F\u002Foperations1.com\u002Fen\u002Fuse-cases\u002Fcommissioning",[737,738],{"id":675,"value":676},{"id":678,"value":679},[740],{"type":532,"value":741},"commissioning software",{"type":532,"value":743},". Efficiency gains contribute a great deal there, given the high qualification of the employees involved and the shortage of skilled staff. That in turn gives the wider rollout real momentum.",{"type":529,"children":745},[746],{"type":532,"marks":747,"value":748},[555],"Stefan, thank you for your insights and advice, which many companies will certainly benefit from.",{"type":529,"children":750},[751],{"type":532,"value":752},"For more detailed information on cost drivers along a concrete use case, see the whitepaper \"Paper-based vs. digital commissioning: the 7 levers to success\". Our customer success stories offer further insight and may serve as inspiration for your own digitalization path.",{"type":542,"level":543,"children":754},[755],{"type":532,"value":756},"Sources",{"type":594,"style":758,"children":759},"bulleted",[760,766],{"type":598,"children":761},[762],{"type":529,"children":763},[764],{"type":532,"value":765},"Operations1: Connected Work study (published end of January), figure on the cost estimate given by 23 percent of respondents.",{"type":598,"children":767},[768],{"type":529,"children":769},[770,772],{"type":532,"value":771},"Operations1: POLIPOL success story, ",{"url":702,"meta":773,"type":680,"children":776},[774,775],{"id":675,"value":676},{"id":678,"value":679},[777],{"type":532,"value":702},[],{"favicon":780,"globalSeo":782},{"url":781},"https:\u002F\u002Fwww.datocms-assets.com\u002F54402\u002F1773657489-operations1_favicon.png",{"facebookPageUrl":133,"siteName":783,"titleSuffix":133,"twitterAccount":4,"fallbackSeo":784},"Operations1",{"description":785,"title":783,"image":786,"twitterCard":788},"Operations1 is the leading Connected Worker Platform for large manufacturers. Empower your workers, increase operational excellence and build future-proof operations. ",{"url":787},"https:\u002F\u002Fwww.datocms-assets.com\u002F54402\u002F1772620363-ops1_favicon.png","summary",1789116834577]