DIGITALIZATION IN WOOD PROCESSING COMPANIES - MANAGERS' PERSPECTIVE

Abstract

Information technology's constant and rapid development affects all industrial branches, including the wood processing industry. There is increased pressure to transform business and operations through digital innovation for companies to respond to accelerated market change, drive energy transition, and accelerate Industry 4.0 adoption. Real-time insights are required to optimize value and manage change continuously. Organizations are also attempting to support new working methods while improving training and safety. Ongoing operations and change programs may clash, and 'business' and 'digital' targets may be misaligned. Speed is critical in driving growth, but it can be challenging to determine where and what to invest in to build a business case for transformational investment and then ensure business value is delivered.

The paper examines the digitalization status of enterprises in the wood processing sector in Herzegovina. Research data is collected through in-depth interviews conducted among managers and owners of wood processing companies. The need for digitalization and the main challenges along the way were identified through interviews. Namely, the analyzed companies are currently not working systematically and planned on digitalization (they do not have an annual digitalization plan, they do not have a yearly budget for digitalization, they do not have annual plans for training employees related to digitalization, as well as a yearly budget for training employees related to digitalization). Companies do not use IoT, robots, augmented or virtual reality, virtual worlds, artificial intelligence, or Big Data technologies. All the interviewees stated that the digitalization of the production process is the biggest challenge due to the need for significant investment in digital equipment and employee training for its use.

Based on data collected through interviews, some general recommendations are given for improving digitalization in analyzed companies. The main recommendation is that the researched companies should upgrade their existing information systems regarding data integration (from different devices and programs) and better reporting. Further, a strategic and planned approach to digitization is necessary in order to provide funds in the annual budgets both for the acquisition of digital equipment and for the training of employees to work with this equipment.