Transform to Industry 4.0 Part 2
Achieving results of Industry 4.0 requires tangible improvements and transformations, both administratively and practically, to create an organization capable of integrating tools and technology that produce real business benefits and effective results.
Many case studies have found that the introduction of modern technology in industrial plants may not achieve the desired results or may even create obstacles due to not taking the appropriate steps during the transformation. For example, increasing production efficiency without a system in place to store data correctly to record production history or having a process in place that is not ready to support the automation of a process.
In addition, these systems may be implemented but not accepted or only partially benefitted from and not being used continuously, leading to an eventual failure of the transformation.
Therefore, in this article, we will discuss the activities that lead to the transformation of Industry 4.0, which are the processes of Digitization, Digitalization, and Digital Transformation.
What and Why
1. Digitization (Data/Information transformation) is the converting of data or information that occurs in any business activity or process from analog to digital, either input or output, which can arise from the use of technology or a process, including the design of storage methods, for example:
Installing various sensors on machinery or equipment.
Raw material inspection via Barcode/QR code.
- Recording data on electronic forms instead of paper.
Digitization is the foundation of the Digital Transformation process. It is an enabler for all the processes that provide business value because of the need for consumable data.
2. Digitalization (Activities/Processes Transformation) refers to enabling or improving processes by leveraging digital technologies and digitized data. This may result in processes being fully automated, with humans required only for controlling and validating, for example:
Data Analysis System Forecasts and preparing reports.
Machine and production line fault monitoring systems.
Information transmission between sales systems, warehouse, and production.
Transmission of data between machines to work together.
Digitalization increases productivity and efficiency while reducing costs. It improves existing business processes but doesn’t change or transform them.
Most organizations begin by creating small projects to solve specific problems, by considering the problems encountered in current activities and then allocating appropriate technology that can generate tangible results and see delivery value from the investment.
Many organizations encounter several issues achieving Digitalization:
- the inability to optimize development due to inadequacy of deployed data which may be a result of digitization activities not being carried out effectively
- scalability to another area of the business due to a lack of understanding or they are not aware of the benefits
- the activity does not support other business activities, possibly due to a lack of overall review of Digital Transformation activities, which are detailed in the next section
3. Digital Transformation (Business Transformation) is business transformation enabled by digitalization.
We can refer to the case of Netflix as a large-scale business transformation, changing from a video rental business to the market leader in Media Streaming for movies, entertainment and eventually becoming a media producer of its own.
Other examples of business transformation are as follows:
Selling products through online channels from the factory direct to the consumer.
Fully automated production processes.
Refraining or reducing the use of paper (Paperless)
In summary, the essence of the transformation process to Industry 4.0 is the need to prepare the information that exists in the organization so that it can be used with the technology to support activities and whether such activities can create value for the business in any aspect and if it is sufficient to meet the needs of the organization.
Considering various technologies such as Business Analytics & Intelligence, IoT, Automation, Machine learning, or AI, we can choose and be confident that these technologies will bring benefits if we did the right process.
If you would like to learn more about how to improve the platform based on the industry 4.0 concept or would like to see examples of the technology's application in different areas, please contact BizOne for a free consultation!