MEE 514

Digitalization
Digitalization is the integration of digital technologies into our everyday life, by digitalization of
everything that can be digitized. The literal meaning of digitalization gives an apparent idea of
development and technology dependent world. It simply means the computerization of systems
and jobs for better ease and accessibility.

The challenges of digitalization in industry

Digital Transformation brings, as all revolutions do, several uncertainties with it. The four main
challenges of our future include:

1. Complexity: With the raising options the degree of complexity increases. The countless new
possibilities resulting from data generation and measurement may turn out to be a not
manageable excessive demand.

2. Similarity: Digitalized processes reduce failure and optimize products and services. This
could lead to very similar outcomes. While the lack of distinction puts companies at risk,
digitalization could have negative consequences on an individual level, also. In medical sector
for example, the standardization and increased measurability would create a sharp line between
healthy and sick people, unleashing grounds for social exclusion.

3. Social bubbles: Social networks connect individuals. But at the same time the underlying
algorithms suggest only incumbent relations and filter information along our interests. This can
lead to a fragmentation of society and blind spots.

4. Lack of control: Security level raises as our decisions in medicine, economy etc. are more
data based. At the same time, raising number of cyber-attacks show an increased exposure to
data losses and show the need for respective actions.

Digitalization in manufacturing industries

Manufacturers are under more pressure than ever before to make efficiencies across the board.
Across the production, distribution and end-customer phases, they are being driven by market
forces to find new ways to improve processes and results, address safety regulations and
ensure production efficiency.

Digitization across each of these platforms is fast becoming the inevitable solution to updating
the manufacturing industry as a whole but particularly in three specific areas:
Connected plants – where operational efficiency and utilization of assets, workers and
associated processes are transformed to deliver a substantially higher level of productivity.
Connected enterprises – where organizational efficiency leads to improved employee
performance, lower cost of IT and highly responsive supply chains. Connected customers –
where radical improvements in marketing, sales and support of product results mean
dramatically improved customer experience, and in turn additional revenues.
Impact of digitalization

Worker safety: Safety is a major concern for manufacturing organisations. Workplace injuries
and illnesses result in an annual loss of over US$220 billion in the US alone. These risks can be
minimised using autonomous robotic systems that can manage risky or repetitive processes in
place of the workers. In addition to this, digital technologies like sensors and cameras
embedded in a worker’s helmet may be used to detect proximity to hazardous zones, exposure
to poisonous gases and even the risk of fatigue, alerting a field worker and the associated
supervisor. Furthermore, radio-frequency identification (RFID) can be used to identify workers
when they enter a plant and automatically assign tasks to them over mobile devices. In more
advanced digital methods, technologies like augmented reality (AR) and virtual reality (VR) can
be used to assist workers in understanding maintenance and operations. For example,
Lockheed Martin’s F-35 aircraft assembly plans have been paving the way for these methods,
and have already increased their engineering accuracy by 96% while enabling employees to
work 30% faster.

Production processes: Digitisation can also help on the shop floor, bringing together
operations technology (OT) and information technology (IT). Using connected IoT sensors and
systems, shop floor information that was previously only available in silos becomes visible
across the plant in real-time. This means that equipment malfunctions and production
bottlenecks can be detected as they occur and, in several instances, even predicted. Through
this visibility, manufacturers are able to prevent defective units from being rolled out and gives
maintenance teams the essential information required to ensure better ‘uptime’. Amongst the
most important outcomes of this digitisation is the ability to connect the shop floor to the top
floor, enabling management at the plant to take faster and better informed actions.

Infrastructure: The emergence of cloud and virtualisation technology has spelt the end of large
capital budgets for computer, storage and network equipment. Pay-as-you-go, need-based
models are now preferred to locked-in investments, chiefly because of the former’s flexibility and
efficiency. Of course, security remains of paramount importance. Many firms are now using
hybrid clouds to manage sensitive data. Through real-time threat detection, artificial intelligence
can also bolster data and infrastructure security through sophisticated machine learning. Such
technology can ensure infrastructure security from as yet unknown types of attacks.

Employees: Advances in digital technologies are enabling better employee engagement and
greater efficiency thanks to improvements in the contextualisation and personalisation of
information. Mobile technologies are also having a positive effect. They can now facilitate
access to data, apps and collaborative platforms more easily than ever before. Natural language
processing, the technology behind chat bots, is enhancing the human-computer interface, which
is resulting in improved user experience. Other developments in the connected enterprise, such
as more prevalent automation, has improved employee productivity. Manufacturers using digital
technologies have reported a 20%-30% increase in gross margins and a 15%-20% growth in
operating income.
Supply chains: Sourcing and inventory management can become a major source of margin
improvement. Industry surveys have shown that just-in-time sourcing, streamlining route-to-
market, reducing batch and shipment sizes, optimising the number of suppliers and turning
multi-day delivery into 24-hour delivery can make a radical difference. Connectivity, IoT and
collaborative platforms enable this while ensuring supply chains become responsive. The secret
lies in driving real time end-to-end visibility, information exchange with internal and external
stakeholders, predictability into supply chains, and agile decision making, thereby reducing risk
from disruptions.

Customers experience:The three major building blocks with which companies are digitally
transforming customer experience are customer understanding, top-line growth and customer
touch points.

1. Customer understanding: Companies are starting to take advantage of previous investments

in systems to gain an in-depth understanding of specific geographies and market segments.
Some are exploring social media to understand what makes customers happy — and what
leads to customer dissatisfaction. In addition, companies are learning to promote their brands
more effectively through digital media. Companies are also building new online communities to
advise and build loyalty with clients in medical, real estate or financial services products. Others
are building products that improve branding in lifestyle communities.

2. Top-line Growth: Companies are using technology to enhance in-person sales conversations.
For example, financial services companies are using tablet-based presentations instead of
paper-based slide decks to make sales pitches. Insurance firms are introducing mobile tools to
help sales people and customers engage in analytics-based planning. A medical device sales
force is replacing in-person interactions with digital interactions. When visiting a doctor’s office,
a salesperson leaves an iPad with video and other information on new products. The aim is to
get the doctor’s attention — without inconveniencing the physician or impacting busy office
schedules — in order to obtain a 10-minute conversation when the salesperson returns to
retrieve the iPad.

3. Customer Touch points

Customer service can be enhanced significantly by digital initiatives. For example, a bank
established a Twitter account to answer client complaints quickly, helping customers avoid
going physically to a branch. This digital initiative also leveraged an expert community, allowing
crowdsourcing with several employees and other customers. Companies with multiple channels
to the customer are experiencing pressure to provide an integrated experience. Multichannel
services require envisioning and implementing change across customer experience and internal
operational processes. Many retailers now offer home shopping with the option to receive
products by mail or in a store. However, one retail executive described customers being angry
that customer service representatives in a store could not access online order history.

The role of human in the digitalization of industrial factory

The result of Industrial Revolution 4, is the "self-organizing" adaptive manufacturing process

that no longer requires constant human intervention, while remaining under human control.
In order for smart production to run smoothly, the humans and robots involved have to
continuously report exactly what they are doing and for example how long parts subject to wear
have until they fail. Everything taking place in the real factory will be represented in parallel in
the virtual factory. Experts refer to this connection of the real and virtual worlds as a "cyber-
physical system"(CPS). The new relationship between human and machine is not one of
replacement, but of mutual inspiration.

The Technology is about greater and greater automation, but far from replacing humans, the
digital factory depend on the close collaboration between man and machine with people who
are not just in the loop, but in the driver’s seat.

The economy is hoping for several advantages and digital transformation of industry to include:
The flexible factory that will make it possible to manufacture according to customer preferences
and make production changes ranging up to the integration of new machines at any time without
substantial effort. Higher Machine utilization in production, drop in the consumption of
resources, and fewer products rejects.