How digitalization, digital transformation strategies are evolving

The goals of industrial digitalization have changed and there are many potential disruptions in the digitalization journey for manufacturers.

By Suzanne Gill November 7, 2023
Image courtesy: Brett Sayles

Industrial digitalization insights

  • Industrial digitalization is shifting towards sustainability. Companies are using digital tools like AI, IoT, and digital twin technology to reduce energy consumption, optimize resource usage, and minimize waste.
  • The next big disruptions in industrial digitalization include the rise of the Industrial Metaverse, integrating AR/VR, digital twins, and AI-driven analytics. Additionally, digital twin technology holds potential for revolutionizing various industries, but challenges like data security and governance must be addressed.

While the initial wave of industrial digitalization was primarily driven by the need for efficiency, productivity and cost reduction – with a focus on integrating systems, automating processes and optimizing operations – as sustainability and environmental responsibility have become more urgent, the drivers for digitalization are evolving in tandem.

This is confirmed by Stefanie Frank, head of strategy at Siemens Digital Industries. “Today, organizations are leveraging digital tools not just for operational excellence but also to achieve their environmental impact and carbon emission reduction targets. Advanced analytics, industrial Internet of Things (IIoT) sensors, and AI-driven insights are being used to monitor and reduce energy consumption, optimize resource usage and minimize waste. Digital twin technology, for example, allows companies to simulate, test and optimize new products and more eco-friendly production methods in a virtual environment before implementing them in the real world.”

So, even as the primary objectives of improving efficiency and productivity remain as relevant as ever, there is definitely a new focus – employing digital tools directly for sustainability goals. With increasing regulations and consumer preferences for more sustainable products and supply chains, companies that integrate sustainability into their digitalisation strategies will have a competitive advantage.

Sustainable manufacturing initiatives

Barry Turner, technical business development manager at Red Lion, concurs. He said: “Initially, the digitalization movement was aimed primarily at unlocking valuable data buried within industrial applications. As organizations ventured deeper, however, they discovered that this data could not only drive business successes but also foster sustainability initiatives. They found that the field data could be utilized to craft strategies that enhance business sustainability. Today, digitalization is serving its original purpose effectively – offering value by facilitating access, connection, and visualization of data. “This process, intrinsically, is fostering more sustainable organizations, as they are able to develop initiatives based on concrete data, making their operations more efficient and effective. This is why collaborating with companies that specialize in managing industrial data is crucial, as they can significantly augment the chances of a successful digitalization initiative.In essence, the focus remains on the data and its potent ability to solve pressing business issues.”

Eric Halvorson, partnership marketing manager II – strategic programs, automation and control at Digi-Key, pointed out that industrial digitalization has been more of an evolution than a revolution.

“When we look at industrial digitalization from a historical view, it was about creating a better understanding of what was happening on the factory floor,” he said. “It meant interconnecting motors and equipment through a network of industrial sensors as a means to actively monitor assets throughout their lifespan on the floor. This enabled operators to see where equipment and assets were operating within specified tolerances and where they may not be. Operators could create maintenance plans that would reduce down time, increase productivity and efficiency all while reducing waste and environmental impact.  Today, we see digital twin coming to fruition. Digital twin enables operators to add machine learning into the equation. With this new technology, we can now look at trends of equipment performance and accurately predict down times for maintenance and apply new programming in simulated environments to see the effect it will have on systems. Digital twin gives us the ability to tie in human assets as well as allowing us to predict peak productivity periods and allow us to create more efficient work schedules, and much more.”

Cutting, reducing energy consumption

Chris Smith, director of projects and engineering at Wago, highlighted the role that industrial digitalization has to play in helping companies cut down on their energy consumption by integrating renewable energy into their operations. “Various technological solutions – such as energy storage systems and smart grids – can help companies manage their energy usage. Industrial digitalization enables organizations to adopt sustainable methods by enhancing the traceability and monitoring of their materials. This enables them to reuse or recycle products more effectively by ensuring that their conditions are documented throughout their lifespan.”

Smith went on to explain that, through digital supply chain transparency, an organization can identify waste, ensure ethical procurement, and reduce consumption. This type of disclosure can also help comply with reporting obligations related to sustainability.

“The advancement of sustainable methods can be accelerated by collaborating using digital tools and platforms,” he said. “This can foster synergistic knowledge sharing and enable partnerships that seek identical outcomes. Due to the increasing number of regulations, companies must now comply with the proper environmental standards. Having the right tools and resources can help manage operations and make informed decisions. Due to the increasing number of consumers who are conscious of the environment, many companies are now turning to digital channels to promote their sustainability efforts. The concept of adopting digital technology has been redefined to include the optimization of an organization’s functions and contributing to its overall sustainability objectives. This new approach places emphasis on the connection between nature and business.”

Disruptions in the industrial digitalization journey

When it came to discussing the next big disruption in the industrial digitalization journey, Frank highlighted the rise of the Industrial Metaverse. This term refers to a connected ecosystem where physical and digital objects and participants co-exist and interact in real-time.

“In practical terms, this means a seamless integration of AR/VR technologies, digital twins, AI-driven analytics, and IoT in the industrial landscape,” she said. “For example, engineers wearing AR glasses can visualize real-time data streams from machinery, collaborate with remote experts in a virtual space, or run simulations to predict and prevent potential disruptions.”

Frank believes this convergence of the physical and digital worlds will revolutionize how industries operate, collaborate, and innovate.

“It will enable hyper-personalization in manufacturing, where products can be tailored to individual preferences at scale. Moreover, the Industrial Metaverse will foster a new level of global collaboration, where teams from different parts of the world can work together in a shared virtual space, breaking down geographical and logistical barriers,” she said.

Halvorson believes that digital twin technology will lead the next big disruption in industrial digitalization. “Advances in data and analytics, AI, ML, cloud computing, IoT, and 5G Connectivity have made digital twin a very powerful tool for factory automation,” he said. “It has the ability to create a dynamic and interactive simulation of the real world in real time with all of the complexity and variability that comes with it. Digital twin has the potential to disrupt various industries such as manufacturing, energy, transportation, healthcare, and aerospace. It could also create new opportunities for value creation across the entire industrial value chain,” he said.

However, he pointed out that there are also some challenges and risks associated with digital twin, such as data security, privacy, governance, integration, standardization, and scalability. His advice?

“Industrial companies need to carefully assess their readiness and capabilities for adopting digital twins and develop a clear strategy and road map for their implementation.”

Turner pointed out the extensive networks built through IIoT, facilitate access to a rich pool of field data. “This data not only helps to drive positive business outcomes but is also being transported to cloud platforms, opening up possibilities for AI integration to extract even more value from the data,” he said.

However, he went on to argue that this pathway is not devoid of pitfalls – particularly concerning intellectual property and copyright violations. He urged a prudent approach, fostering education and communication. “It is imperative that individuals dealing with IIoT data linked to AI are well-versed with AI usage policies and maintain open channels of communication with IT, legal, and digitalization architects to minimize risks,” Turner said.

Turner went on to comment on recent developments in the form of new large language models (LLMs) which provide an unprecedented interface to AI and machine learning. “Tools like ChatGPT have bridged the gap, allowing anyone to interact with AI without the prerequisite of programming knowledge or expertise in AI,” he said. This development has profound implications for the digital factory floor, enabling users to communicate effortlessly with machines and receive coherent responses.

“This combination of AI and IIoT is set to redefine the boundaries of what we deemed possible, adding more industrial devices to IoT networks where AI can analyze critical data sets and make informed decisions based on learned patterns, all happening in real-time,” Turner said.

Although he said it was difficult to predict the exact impact of the next wave of technological change in the industrial sector, Smith identified several promising areas where he believes innovations can transform the way people work.

“As more devices and sensors are added to industrial facilities, the integration of AI and edge technologies will help develop more intelligent and autonomous systems. The rapid evolution of 5G wireless technology will allow industrial devices to connect to the internet faster and more efficiently. Its low latency will also help develop new applications such as augmented reality and remote monitoring,” he said.

Physical assets or processes can be represented as digital twins. With the help of advanced simulation methods, digital twins can be used to optimise or test processes prior to their actual implementation in the production line. This can result in shorter times-to-market and better operational effectiveness.

Robots and drones are expected to be utilized in industrial settings to carry out various tasks, such as maintaining and inspecting equipment. “Such systems could be paired with humans to improve the safety and efficiency of operations,” Smith said. “Blockchain technology has the potential to improve the transparency and traceability of supply chains. It could help ensure that the products and materials used are authentic and ethically sourced.”

Smith explained the regulation and ethical considerations involved in industrial digitalization will become more crucial as the industry continues to evolve. “Companies need to be aware of the numerous regulations and requirements that apply to the use of new technology. Digitization and the integration of various tools and technologies within an ecosystem can lead to better synergy and efficiency, but of course, this may entail exchanging data across different departments or sectors.”


As the goals of industrial digitalization evolve, the journey looks set to become more holistic, encompassing not just operational objectives but also broader societal goals such as sustainability. And, with innovations like the Industrial Metaverse on the horizon, the future of industrial manufacturing promises to be more connected, efficient, and transformative than ever before.

– This originally appeared on Control Engineering Europe’s website. Edited by Chris Vavra, web content manager, CFE Media and Technology,

Author Bio: Suzanne Gill is editor, Control Engineering Europe.