The Benefits of Industrial Digitalization
STORY INLINE POST
Changing market demands is a challenge that companies constantly face; however, in general, societies face even greater challenges, such as the sustainability of the planet, climate change, and overpopulation. Fortunately, the increasing number of digital technologies can help to drastically remodel the way we live and how industries reinvent their processes to evolve and grow.
By combining the real and digital worlds through operational and information technologies, companies are striving to drive productivity, maintain their competitiveness and increase the scope of their innovations. However, it is neither quick nor easy to achieve these goals. As demonstrated in a recent study by McKinsey, the general success rate for digital transformation initiatives is below 30 percent, even in digitally advanced industries like high-tech, media, or telecommunications, where this rate is below 26 percent.
In traditional industries, such as oil, gas, automotive, infrastructure, and pharmaceuticals, this success rate is extremely low (from 4 to 11 percent). Furthermore, only 16 percent of those surveyed for this study stated that their organizations' digital transformation had increased their performance, while only 7 percent have successfully maintained these improvements. An interesting take away from the document is that companies with fewer than 100 employees are 2.7 times more likely to achieve successful changes than those companies with more than 50,000 employees.
Successfully rolling out a transformative technique within an industry demands balancing the investments in digital innovation, leading to a technical debt with hard-to-change, pre-existing technologies. This is particularly applicable in the pharmaceutical and chemical industries, in which costly inherited systems can represent an obstacle to change.
Considering this situation, we propose a holistic approach to digital transformation, which considers that each company is unique in terms of its maturity in automation, industrial requirements, and other factors. This approach encompasses three phases: Consultancy, Implementation, and Optimization.
Consultancy. During this stage, it is necessary to discover what it is that the client wants to achieve. The main goals are an exhaustive assessment of the company’s digital maturity and a focus on the client's expectations, experiences, and ambitions. This phase provides a baseline for mapping out detailed digitalization that is aligned with the client’s strategy and maturity, including the subsequent phases of Implementation and Optimization.
Implementation. This phase encompasses the installation of the architecture of a solution to previously identified requirements and case uses. Furthermore, it includes the creation of digital twins of products, machines, systems, and entire production lines. The digital twin is an accurate representation of the physical environment and is capable of showing its development throughout an entire life cycle. It also helps predict behavior, optimizes performance, and implements insights for previous designs and productions.
Optimization. The third and final phase encompasses the compilation of data and its translation into insights to drive the ongoing optimization of a plant. This uses two technologies and approaches. Firstly, data analysis to drive the transparency of the performance parameters and create a baseline to increase Overall Equipment Effectiveness (OEE), in addition to also helping to monitor and optimize KPI-based performance regarding costs and productivity. Secondly, artificial intelligence is used to run virtual testing and quality control to reduce costly and time-consuming test scenarios. This helps drive performance based on operator recommendations.
Furthermore, a digital transformation strategy must include people from both sides of the team who are focused on change management; these are the people who have a deep-rooted knowledge of the processes and their technical aspects, and opinion leaders who have the necessary skills to communicate the benefits and implement them effectively. Both parties have to work together to achieve changes at both an operational and an organizational level.
Industry Ecosystem Experience
A digital company needs to be built within an open and inclusive industry ecosystem that drives sharing and open collaboration to react to changing commercial opportunities, in addition to undertaking new market challenges. This concept provides a holistic approach that combines the experiences of different partners to tackle and support the necessary digital transformation, breaking down silos and thinking outside the box in terms of the current plant configurations of our clients.
Exchanges within this ecosystem model help to create a community of clients and suppliers and offer access to experts throughout the industrial world to jointly approach problems openly and collaboratively. It focuses on leveraging what each partner has obtained in terms of their experience and knowledge to share and offer technological solutions and services that have a higher commercial value and impact on other users within the value chain.
Within the industrial partner ecosystem, all members offer their strengths and specific experiences of digital expertise and can collaborate with others within the same community whenever necessary.
The convergence of information technology data and operational technology assets to achieve greater optimization of industrial processes, supported by partners with proven methodologies, can help create a robust cybersecurity environment and a collaborative triangle between Siemens, its partners, and clients.
We must work together with other organizations, academia, governments, and societies to make advances in digital transformation and thus contribute to the creation of a more sustainable future.
Sources:
https://ingenuity.siemens.com/2022/07/siemens-is-building-a-powerful-industrial-partner-ecosystem/
https://ingenuity.siemens.com/2021/07/digital-transformation-in-process-industries/
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