This paper proposes a conceptual implementation model for small and medium enterprises (SMEs) to follow as part of their digitalization implementation. It can later be translated into a practical step by step guide for SMEs to practice during their digital transformation. The model is based on gradually developing industrial capabilities that can influence production processes performance. The model development was based on a critical literature review and a real case industry application. The case data served as direct feedback to the model to assess both the model validity and the actual SMEs needs. The capabilities included in the model are proved to directly influence the performance positively. In comparison with existing models and frameworks, this model envisions the company a full digital shift by proposing an achievable sequence which SMEs in a resource-efficient way could start deploying in compliance with their business needs. SMEs can utilize the capabilities as a foundation for a system that supports continuous improvement in the whole factory.