Digital Transformation: What is it and why does it matter?
Technological innovation is rocketing along at an exponential rate. In 1879, Thomas Edison invented a reliable electric light bulb. From there, the human race hurtled through unprecedented advancement. A short 100 years later, personal computers entered the mainstream. Apple’s first computer was developed by Steve Wozniak in the 1970s and within 30 years we had the first iPhone. Now, almost everyone has a high-powered computer in their pocket. Our phones have more computing power than NASA had when they put Apollo 11 on the moon.
Technological advancements build upon themselves; taking less and less time than the last. This affects every single corner of society including manufacturing. The advancements in manufacturing have been called “Digital Transformation”. A Medium.com article on the topic defines it succinctly: “Digital transformation is the process of adopting various technologies within a business to digitize and modernize its operations.” Today’s technology is changing every single aspect of how business is done. So, adopting a digital transformation strategy will allow your operation to become more efficient and remain competitive in the current marketplace.
Saying that digital transformation has infiltrated every single aspect of manufacturing, and can be leveraged to improve those areas significantly, is not an understatement. The same Medium.com article says, “over 70% of business experts state that they have experienced a hike in their business through digital transformation.”
Below are some high-level ways digital transformation can improve your operation:
- Logistics: Companies are quickly realizing the benefits of using advanced information technology to better take in orders, analyze inventory, track shipments and provide more transparency to their customers. The ability to provide customers with more information regarding supply chains and their orders makes a significant difference in customer experience and satisfaction.
- Operations: This is the area that most frequently comes to mind when talking about digital transformation. How can digital transformation help you make better products faster and more efficiently? The obvious methods are automation and data analyses, but are you automating the right areas and looking at the right data? Automation in the right areas allows you to transfer resources and employees to areas of need. Gathering the right data allows you to identify production issues. Then, you can better plan for equipment maintenance or life-cycle replacement that will reduce downtime and unexpected events. This allows you to predict or pivot in the face of rapid change. All of this can result in increased productivity and reduced costs.
- Security: The recent cyberattack on the Colonial Pipeline – a critical fuel pipeline on the East Coast – shows how today’s digital environment has the drawback of making operations more susceptible to attack. Whereas, in the past, a physical action was required to disrupt operations, now an attack could theoretically occur from anywhere. An ARC Advisory Group article (a leading technology market research firm) lays out the unique challenge of industrial cybersecurity: It is a hybrid of conventional information security combined with each company’s unique operational systems which makes it difficult to establish any type of best practice or common strategy that applies to a majority of cases. However, operations know their unique systems and through digital transformation can identify those areas that are most vulnerable. From there, they can develop a security plan that is unique to them and stay protected.
- Safety: Gone are the days of the manual counter on the manufacturing floor keeping track of days since an accident. Safety is not just about personal protective equipment, training and a database of incidents for reporting purposes. Companies now have the ability to collect far more advanced data regarding the safety of their operations and employees. They can use that data to not only identify areas of risk, but also predict and proactively address situations where an incident may occur. However, there is still a mentality that safety is a zero-sum proposition. Investment in safety can take away from productivity, and that is expensive. However, a study by Rockwell Automation and LNS Research shows that 60% of their respondents who deployed “advanced safety technology” saw financial improvements and 75% experienced operational improvements. The median time before respondents saw the benefits of the technology was 12-14 months. Investment in safety through digital transformation is worth it. According to OSHA, for every dollar invested into workplace safety, companies see a return of $4-$6.
These are just high-level examples of how digital transformation could improve most aspects of your operation. If a company is not utilizing today’s technology and data sharing to improve itself, it is falling behind in a rapidly changing business environment. It’s never too late to start the digital transformation journey for your business. Whether it’s assessing your current state, designing and planning for the future, implementing a solution, or supporting your operations, Van Meter can help.