Digital transformation’s importance for manufacturers

Digital transformation is when a business or organization adopts and applies computer-based technology to improve a process.

By Inductive Automation November 14, 2022
Image courtesy: Brett Sayles

Digital transformation insights

  • Digital transformation uses innovation and technology to solve traditional challenges and improve an operation or process.
  • Digital transformation will improve efficiency, streamline operations and increase productivity, which will boost customer value and profits.

Digital transformation. With so many business leaders and tech conference speakers telling us what the phrase means, it might be easier to explain what it is not.

So, what exactly is it? A major part of Industry 4.0, digital transformation is what happens to a business or organization when it adopts and applies computer-based technology to create or improve a practice or process.

“Think of digital transformation as an ‘umbrella term’ that captures everything we see happening in modern business today,” said Remus Pop of Riveron. “This includes all the intangible Industry 4.0 ideas that make up a mindset, and then all the tangible things like the IIoT, hardware, and software.”

When it comes to business, digital transformation is not a one-size-fits-all solution. It does not have a standardized beginning or a common end because it’s different for each company. And leaders who treat it as if it’s a destination, well, they’re missing the point.

This transformation is actually a journey: a modular and scalable process that can go as far or be as simple as each company wants and needs. Simply converting a single plant floor’s legacy “sneaker net” reporting practices from handwritten papers to electronic files might be all that is needed for some, while others want full smart manufacturing practices that completely automate processes and connect interoperable systems at multiple locations.

“When you think about it, we are just at the very beginning of this,” said Pop, who continues, “It grows with you. It’s not just smoke and mirrors, there are real gains happening from this.”

When done right, digital transformation is more than the sum of its parts. It might not mean full-on machine learning with robots doing all the manual labor, but it’s surely more than just moving your stuff to the cloud and calling it a day.

Digital transformation vs. digitization vs digitalization

Google “Digital transformation” and it’s mass confusion. This is primarily because there are two terms – digitization and digitalization – that are used interchangeably but mean slightly different things and produce different results. They’re different branches of the digital transformation tree.

Digitization is the process of moving from analog to digital. That’s it. It could be as simple as scanning physical photos and saving them as computer files.

Digitalization is the use of digital data to change (and, in most cases, improve) a work process. This could be a doctor’s office using an online network to gain immediate access to your medical records from other health care providers.

Consider these in tandem and you start to understand how digital transformation leverages both of these practices to collect, view, and use digital data to streamline a business operation or process – thus, transforming that business with the use of technology.

As another example, imagine an automobile mechanic using a tablet to measure and record sensor data that is then displayed on a single dashboard with all gauge readings. Neither the vehicle’s data nor any corrective action it suggests has changed, but how it is accessed and used has been improved. So moving from clipboards to dashboards saves time and improves accuracy.

Digital transformation history

It’s easy to think of digital transformation as a relatively new thing, but the concept has been around for a while and seems to run parallel with the history of modern computing.

Arguably, digital transformation dates back to 1947 to the first functional transistor, a semiconductor device with powerful signal and calculation capabilities that facilitated the transition from analog computing to digital computing. Transistors are a key component of computer microchips, the first of which was successfully developed in 1959 and introduced major improvements to memory, storage, and precision of data. Digital computing transformed the world by multiplying computers’ processing power and capacity.

Modern information technology (IT) structure took shape in the 1960s when IBM launched a mainframe for large-scale data processing and computing power. Mainframes led to servers that host all that data produced by mainframes. This, of course, leads to today’s hybrid environments of networking and cloud hosting, which transformed how we store and share data.

The digital revolution (the third industrial revolution) took a giant leap forward in 1969 when the first message between two computers was transmitted over ARPANET — a network of connected networks, a concept that led to the internet. Then in 1971 the first email was sent over ARPANET using the now-familiar ‘@’ syntax to identify system addresses, which transformed the way we communicate.

The world wide web debuted in 1989 and standardized the format of electronically shared files to become a digital library. It’s interesting to note that the late 1980s is when automation was fully introduced and ingrained into business workplaces, which makes this period a logical origin point for digital transformation in the context of industrial and commercial practices.

A major shift happened in 1991 when a 2 GB server began hosting the web and the internet became truly public and readily available in most countries and homes (computers became more affordable and portable in the 1980s). As the internet grew throughout the 1990s into the beast it is today, businesses had to change the way they communicate and interact with customers and how operations are managed.

Today, the key to using digital transformation to your advantage, said Hugh Roddy of Chobani, is to have a plan and create standards. “It’s about networking and data management. It could be completely hosted in the cloud, but some might not want to do that for security reasons. It could be simply modernizing antiquated systems like eliminating the bird’s nests of cables. But, build dashboards.”

Dashboards, Roddy said, allow everyone to see the same data, creating standards across multiple divisions.

Benefits of digital transformation

Because it is so subjective, digital transformation can be a diverse tool that, like a Swiss Army knife, can unfold many capabilities.

First and foremost is data. Data is the new oil in modern industry, and digital data can be viewed, recorded, and/or shared in real-time with web-based cloud applications. Getting the right people access to the right data accommodates true preventative maintenance and predictive analytics. Production dips and downtime can be a thing of the past.

“Digital transformation brings forth data standardization,” said Kurt Hochanadel of Cirrus Link. “It bridges the gap,” he continues and explains that Cirrus Link uses it to connect and unite the people and processes in different places that were previously siloed off from one another.

With digital computing, data and electronic files are now created, stored, accessed, and shared in a fraction of the time, cost, and size compared to analog.

“It’s not rocket science,” said Peter Photos of Streamline Innovations. “The reason it can be scary for some is because they don’t fully understand it, and therefore they assume it will cost a fortune. But knowledge is cheap, and today it’s available at our fingertips. Use the data.”

Aside from data itself, perhaps the biggest advantage is cloud computing and web-based applications that allow you to monitor and control equipment and processes at any time and from anywhere there is an internet connection. Time and distance are no longer obstacles. A manufacturing plant manager can now use a cell phone to start, stop, or control a conveyor belt from a thousand miles away.

Even seemingly small things can have big impacts. Things like key performance indicators (KPIs) and sharing of data between multiple locations all work to seamlessly connect the three P’s: Processes, people and programs.

Processes become so much more efficient and effective when clipboards become dashboards. Information is available in real-time, and people can make decisions and put it in place today rather than having to wait for the next spreadsheet or quarterly report.

Heck, new software and technology can even be leveraged to train employees to use the new software and tech.

These all save time, and time is money in the business world.

Who needs digital transformation?

Everyone from international Fortune 500 enterprises to local mom-and-pop shops should be using digital transformation to remain competitive and relevant in today’s world. Anywhere there is a process in which people and machines coexist, digital transformation can be useful. And with today’s tech, you don’t have to be a software engineer or write code to get onboard the train.

Cirrus Link’s Kurt Hochanadel reminds us that technology is simply a tool and it doesn’t have to be complicated. Today’s technology makes things so simple that there is no detailed coding involved from the user end. “We have all this data being collected and shared across networks, so we just need a way to talk to that knowledge base and transfer that intelligence into usable data,” Hochanadel said. “Digital transformation is the enabling tool that makes this happen.”

Original content can be found at Inductive Automation.