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Industrial Digitalization: 6 Benefits for Your Company

Michal Krzysztof v2 a28a1397a9

17/05/2022 |

8 min read

Michał Krzysztof

Customers today expect products and experiences to be available at all times. For that reason, organizations in all sectors are investing in new technologies that solve problems and help achieve key goals related to the demand for real-time availability. 

Companies that are part of industrial sectors like the manufacturing industry are especially exposed to the changes that digitalization brings about. These new trends and requirements result from the advancements in the sector's key technology platforms of the future, such as the IoT (Internet of Things), cloud computing, Big Data, and Artificial Intelligence, among others. 

These technologies form the foundation for industrial digital transformation – a collection of innovation and transition solutions that open the door to new business models and revenue streams based on increased automation, improved manufacturing processes, and production optimization.

Why is industrial digitalization so valuable to the industrial and manufacturing sectors? Here are the most important benefits of this rapidly-evolving cluster of technologies.


Table of contents:

  1. What is industrial digitalization?
  2. 6 benefits of industrial digitalization
  3. Digitalization technologies: Wrap up

What is industrial digitalization?

Industrial digitalization is a suite of sensors that can monitor a company's assets and investments, connected in a network, and communicate with each other. Industrial digitalization involves using IT to increase margins, extend the lifespan of assets, and reduce the environmental impact of industrial operations. 

Such solutions can provide senior-level executives with both a holistic and low-level view of the company's operations. Specialized software provides at-a-glance insights about total resource flows, production of deliverables, and whether an organization is meeting its targets. Management can also use it to do a deep dive into the specific functioning of any given piece of equipment for a performance boost.

Which technologies enable industrial digitalization?

Industrial digitalization is the result of decades of technological advancements across various sectors. The groundwork began with the introduction of digital components in machines and equipment in the 1980s. This was when inexpensive microprocessor-based solutions replaced analog controls and readouts. 

The revolution that happened in the workplace with internet-connected personal computers put another prerequisite for industrial digitalization in place. This trend has only gained in importance due to the Covid-19 pandemic that forced organizations to embrace remote work technologies.

Another aspect of industrial digitalization connects with the Industrial Internet of Things (IIoT), which brings together small microprocessors with digital sensors and networking, delivering the information coming from a company's sensor suite directly to its headquarters. 

The technology has also enabled organizations to control the operating parameters of assets remotely. This is how organizations have reduced – if not completely eliminated – the gap between strategic planning and ground truth data, allowing decision-makers to see the impact of their choices in real time.

Applications of industrial digitalization

Suppose a company is looking to create digital models of its production line. In that case, it may find that the stream of information produced by the Industrial Internet of Things is a great resource for process simulation solutions. This type of software is used to simulate an existing production process inside a piece of software. 

Accurate information about the actual functioning of the process in question must be available in order for such models to be useful. 

With industrial digitalization, companies no longer have to engage in laborious data entry of paper records and data conversion when trying to connect systems running on different platforms. That's because they can link the data stream to the simulation. 

At the same time, networking has matured to the point where an entire supply chain can be connected together for greater productivity. For instance, Toyota uses specialized industrial digitalization software to automate communications with suppliers. Toyota's lean “just-in-time” supply chain strategy has been streamlined further by the use of software to anticipate which components will be needed automatically. 

Many organizations are starting to realize that the information being produced by their network of sensors can do more than simply power up existing directives and goals. In the effort to understand how their assets and equipment really operate, companies have unlocked new ways to refine their goals, operations, and decision-making processes.

6 benefits of industrial digitalization

The 6 key benefits of industrial digitalization are:

  • Cost reduction
  • Production decentralization
  • Greater operational efficiency
  • Greater competitive advantage
  • Increase in internal cohesion and use of data
  • Attractive employer brand

Cost reduction

Industrial companies rely on digital technology to change how they operate and to stay competitive in today's global market, where cost optimization is key across all business models. In the case of industrial companies, integrating digital technologies can have a wide range of benefits, from eliminating human error to the optimization and automation of business processes. 

Thanks to these new technologies, industrial companies can make faster decisions, ensure that they are within budget, and streamline their processes. Furthermore, they gain access to a fully remote monitoring system that helps cut down on expenses, thereby reducing their labor costs. 

In addition to all this, digital transformation allows for infinitely more accurate estimation and calculation of expenses, ensuring that budgets are under control at all times.

Production decentralization

Digital transformation offers manufacturing companies remote monitoring systems so production can continue to function on its own when necessary. This means that exceptional circumstances such as equipment breakdowns don't disrupt the overall operation.

Digitalization also enables the development of new manufacturing and production models that increase flexibility and responsiveness across supply chains and beyond. For example, suppose there is a problem in a production plant. In that case, a warning will be sent automatically and the business can be sure that the problem is handled – no matter the time or whether someone is physically present on the plant's premises at the time. 

Greater operational efficiency

Smart product connectivity gives devices the ability to interconnect and communicate machine-to-machine (M2M). This allows them to make decentralized decisions. For many tasks, companies no longer need an employee to be physically present at all times. 

This new model eliminates monotonous and sometimes even dangerous tasks, making them more accurate, efficient, and responsive. Beyond optimizing processes and tasks, digital transformation enables faster, more effective decisions based on accurate real-time data. 

In addition to that, training, modification, and repair processes are no longer a problem since they occur less frequently and are fully automated.

New business opportunities and greater competitive advantage

New digital systems allow companies to develop innovative products and services that are more attractive to customers and generate new revenue streams. Moreover, the speed at which new products can be launched is much faster. 

By using Big Data and Artificial Intelligence, manufacturing companies can quickly test trends with their target audience and predict which developments are likely to succeed by incorporating them into their products or services. This enables them to become more environmentally friendly by creating greener products that are less harmful to our ecosystem. 

New technologies also improve the quality of manufactured products by incorporating new functionalities into production systems that translate into the quality of the final outcome. This leverages the differentiation of the products in question and provides added value to the brand. On the other hand, companies also get a helping hand in generating comprehensive quality reviews to ensure compliance with standards and regulations.

Increase in internal cohesion and use of data

Organizations benefit greatly from the flow of information brought by digitalization. The immediacy of data access allows employees to work together as teams, collaborating on projects and making decisions smoothly. Furthermore, a company gets a broader view of its operation, enabling more global strategic planning. 

On the other hand, immediate data access enables companies to innovate with previously unexplored information to prepare for future trends that might harm their businesses. 

This type of digital transformation fosters a culture of data-driven decision-making supported by technological tools that aid in the deepening of data understanding. This overall strengthened data analysis system leads to an increase in informed decision-making, key recommendations, and quick responsiveness.

Attractive employer brand

Companies that are up-to-date with trends attract the most interest from employees. If a change is managed in an appropriate and responsible manner, it will benefit all its parts, generating job satisfaction for employees. Human motivation brought together with effective digital tools will be reflected in the productivity and profitability of the company. 

The fourth industrial revolution that brought Industry 4.0 is no longer an option that could give companies a competitive advantage. Technology adoption has become a necessity for survival. Industry 5.0 is just around the corner. Without digital skills involved in transformation, organizations won't be able to keep up with emerging demands or retain their competitive advantage against the rest of the manufacturing industry.

Digitalization technologies: Wrap up

Industrial digitalization is a key step in a company's journey to becoming a smart enterprise. Smart enterprises usually have a shortened lag time between data generated on the ground and any adjustments required to business operations to meet their company goals. 

The process of industrial digitalization can generate rich data for companies, a huge benefit for those looking to develop or improve industrial AI. Don't forget that machine learning or artificial intelligence initiatives require large datasets to train on (and the required data management capabilities). 

Supercharged industrial AI algorithms crunch through huge volumes of information to determine relationships and connections between the various aspects of an industrial process. A company looking to include an industrial AI can pipe the data to the machine learning software and reap the benefits from industrial digitalization.

Are you planning an industrial digitalization initiative? Please share your thoughts in the comments section; we look forward to starting the conversation about the best practices in the field. If you need a hand in implementing new technologies in your company, reach out to us – let’s talk about your business needs!

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Michal Krzysztof v2 a28a1397a9

Michał Krzysztof

Sales Director at Codete

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