The Italian Industry 4.0 Plan is an important initiative to help focus the attention of the productive system to the paradigm of the so-called 4th industrial revolution and, more generally, to digital transformation and innovation.
But, exactly, in practice, how is digital transformation done?
Digital transformation in short
Let’s try and simplify as much as possible the concept of digital transformation. We could say that digital transformation is essentially a question of data. Data in digital format, that is electronic data, that can be both processed by a computer and, of paramount importance, easily interchanged between different computers.
It’s therefore a two stage process. The first, accomplished by integrating one or more computers into an object or a process. The second, by interconnecting these computers to computers of other objects and processes.
Here’s an example. If we equip a machine tool with a computer (in this case the computer takes the name of PLC – Programmable Logic Controller) to better control the manufacturing process, we make a first step into digital transformation. When we then connect the machine tool to an information system that coordinates the operation of several machine tools, the so-called MES (Manufacturing Execution System), we undertake the second stage of the digital transformation process and enter the 4th industrial revolution.
But this is only the beginning. In fact, we can add more computers to interconnect different business systems, made of machines and processes (design, purchasing, production, sales, logistics), both within the company (horizontal integration) and outside of it. In this latter case, we connect internal systems to those of customers, suppliers and carriers (vertical integration).
Interconnecting different systems translates into the concept of “digital thread“.
Indeed, the digital thread, which, as we have seen, is the information technology infrastructure that allows the exchange of data, therefore information, between different systems, internal and external to a company, has, by itself, a huge potential for innovation. The revolutions accomplished by companies like Google, Facebook, Apple, Netflix, Amazon, were built precisely on the exchange of information between systems, thus creating new business models.
We can better understand the power of the digital thread if we imagine to collect data on how a product is used, through sensors connected to an electronic board which, in turn, is connected to the Internet (this is the IOT – Internet of Things). This data is then stored into a software system dedicated to collecting and processing data from the digital thread, the so-called PLM (Product Lifecycle Management). Moreover, we could also retrieve data relevant to sales and after-sales from the software dedicated to managing customer relations, the CRM (Customer Relationship Management). We could then give the R & D engineering team access to the PLM.
I bet, they would change the way they design a product. In fact, the design process would be guided, in real time, by the customer’s experience.
There is another key component of the digital transformation, closely related to the digital thread. The “digital twin“. Undoubtedly, if we constantly collect information from all the activities performed to deliver a product to the market, commonly named the “value chain” (design, production, purchase, sale, logistics, maintenance), and the way it is used, we obtain a digital copy of the entire life cycle of the product. The physical process and its digital companion are called the “cyber-physical system“. It is a term often used in Industry 4.0 terminology.
Somebody may now, rightfully, ask what could be the use of the digital twin. Well, let’s imagine to have this huge set of data, models and analysis available. We could then use it to anticipate problems, predict the effect of changes, simulate the life cycle of new products even before they are manufactured and sold. This is the ultimate goal of the digital revolution: the intelligent factory. But, for now, I would stop here.
Let’s practice digital transformation
In my opinion, we have two ways to kick off digital innovation projects.
The first is to solve problems using new digital tools. Instead of dealing with issues in the traditional way, we should find solutions by applying a digital transformation approach.
For example, if the newly employed staff for after-sales service needs constant support by senior engineers, we could avoid extra traveling hours by integrating assisted reality equipment (assisted reality is explained at the following link) which allows senior engineers to assist junior staff remotely in an effective and efficient manner.
The second approach, more difficult to implement due to the longer return on investment, would be to improve business processes even in the absence of critical issues. In this case, it may be better to concentrate the efforts, at least initially, on processes close to the company’s value proposition. If the key value is rapid delivery, vertical integration with suppliers could be a good solution.
In both cases, however, we are composing the transformation puzzle with pieces of digital innovation. And, as every puzzle requires, an overall perspective is fundamental.
It is also important to keep an open approach, to experiment, or even better, to play with ideas and solutions.
But let’s not forget what Jean Paul, the German writer of the Romantic period, said:
“A game is a serious matter. Indeed, tremendously serious “.