Industrial Digital Transformation
We live in a progressively more digital world. As digitalization ramps up in various industrial sectors, the need for companies to rethink how they implement products, services and engagement strategies gets more pressing by the day. In fact, COVID may have accelerated this need for industrial digital transformation.
For over two decades, industry 4.0 has been on the horizon, and then in its infancy. This transition, prior to the pandemic, was a gradual progression. Enterprises were discussing their future digital transformation initiatives. If they already had roadmaps, they were mapped out across anywhere from a year to over a decade.
Then, the pandemic hit – and the world changed rapidly, in little over a year, forever.
Suddenly, with the whole world sheltered in place, many industries had to scramble to stay afloat. Supply chains globally were exposed for cracks in their systems that led to empty shelves and pandemic-induced panic. Businesses had to swiftly embrace industrial digitalization for new or improved ways to maintain customer engagement and recover from supply chain disruptions.
Digital transformation roadmaps sprung up across most industries, Roadmaps from companies that already had a digital strategy underway were shortened drastically. What was once mapped across a year or more narrowed down to weeks and days.
Just like that, COVID-19 brought with it change that would’ve taken years to implement otherwise – especially for capital intensive industries that were dragging their feet before. These industries, including transportation, manufacturing, oil and gas, pharmaceutical, distribution, and more are leading the forefront in industrial digital transformation. AI-lead supply chain software, asset management software, and other artificial intelligence tech are now a reality across many essential sectors.
Is your brand or business prepared for this new age of industrial digital transformation? We believe it depends on just how willing and efficiently enterprises are able to adapt to this new, automated era.
The last digital revolution, industry 3.0, lasted about four decades. It focused in on novel automated systems and began the implementation of computing in the manufacturing process. Since industry 1.0, though – the very first industrial revolution – industrialization has always been about increasing productivity, managing processes easier, becoming more efficient and other, similar metrics.
With each new revolution, industries and enterprises within those industries either learned to adopt the newest technology – or failed to continue past a certain point. And that need for businesses to adopt the newest tech seems to be speeding up every year.
In 1958, a study from McKinsey observed the lifespan of companies, on average, was over 60 years. Today, companies live, on average, less than 18. The market is saturated, and competition is fierce. Adapting to this next industrial digital transformation is vital for enterprises to increase their lifespan once more.
Taking that first step to industrial digital transformation will allow your brand to become more customer-centric. It will allow you to develop a more sustainable production model, through predictive maintenance on equipment, the efficiency in the manufacturing process and much more. Using predictive analytics, value chains can adapt to market conditions in real-time, acting as a digital nervous system for brands.
Investing in industrial digital transformation evolves the current way assets and facilities perform. According to “Digital Transformation of Industries,” a whitepaper from the World Economic Forum (WEF), digital transformation is a key priority to realizing more business value across a broad spectrum of industries. The chemicals industry will see a boon of $550 billion from going digital. Mining and metals industries can anticipate $400 billion in value, and the electricity sector is set for a generous $1.3 trillion.
In every stage of a customer life cycle, traditional industrial models can be done away with as more efficient digital industrial models are integrated. To capitalize on this shift to digital, enterprises have begun to retool their products as services.
Traditional business models focus on the customer life cycle of buying a one-off product. Even with customer support, the conventional goal was simply issue resolution. Industrial digital transformation includes models for products that are instead platform- or solution-based. What was once a one-time transaction is becoming a relationship-based, ongoing service for far more value.
Even traditional delivery methods of purchasing the product in person have taken a backseat to waiting for your product to come to you in the comfort of your own home. Capturing that upfront but fleeting payment transforms into recurring payments – because with a service and not a product, you never stop providing value to your customer.
A reason for urgency in adopting industrial digital transformation are the holes in some industries’ cybersecurity measures. We are propelling forward into this next stage with or without tighter measures being implemented. Appropriate digital transformation initiatives will include better approaches for a more stringent level of cybersecurity, protecting critical data and mitigating overall risk.
What are examples of industrial digital transformation?
Some examples of digital transformation across various industries include the use of artificial intelligence, machine learning software, big data and more.
Which industries need digital transformation the most?
The industries that need digital transformation the most are healthcare, retail and manufacturing. However, every industry can benefit, besides the ones that are already well underway with their industry 4.0, such as digitally mature sectors like financial services, telecommunications and especially technology.