When we talk about digitalisation of industry or Industry 4.0, the general perception is that the focus lies mostly on new digital technologies.However, this approach does not go far enough. New approaches, new ways of internal and external cooperation and an adaptive corporate culture are equally important. Only when all these factors work together can innovative approaches to products, processes and business models be implemented with new digital technologies in a sustainable way. Digitalisation will lead to profound changes in the industry. However, for the “Internet of Things”, we not only need the internet but also the “things”, i.e. physical products. New business models or “smart products and services” only work with the combination of digital technologies with physical products. Even in the future, the “things” will still be developed and manufactured by industrial companies.

Focus on the value chain and customer benefits

It is difficult to predict where the digitalisation projects will lead and how quickly the progress will be. To start with such projects, the company needs courage and a culture of experimentation. It must build up the know-how gradually, gather more experiences and apply the solutions profitably on an ongoing basis. Typically, industrial companies initially aim to make their value chain more efficient, faster and more agile. The key technologies in this area are automation, robotics and additive manufacturing. But e-commerce solutions, ERP integration of customers and suppliers, Augmented Reality in the service sector and the “Internet of Things” are also playing an essential role.

However, companies must always bear in mind that the use of digital technologies is not an end in itself. The ultimate goal is to define new offers that bring added value to customers or make the company more competitive. “Smart products and services” and innovative business models are becoming increasingly important. When we talk about digitalisation of industry or Industry 4.0, the general perception is that the focus lies mostly on new digital technologies. However, this approach does not go far enough. New approaches, new ways of internal and external cooperation and an adaptive corporate culture are equally important. Only when all these factors work together can innovative approaches to products, processes and business models be implemented with new digital technologies in a sustainable way. Digitalisation will lead to profound changes in the industry. However, for the “Internet of Things”, we not only need the internet but also the “things”, i.e. physical products. New business models or “smart products and services” only work with the combination of digital technologies with physical products. Even in the future, the “things” will still be developed and manufactured by industrial companies.

Interaction of physical products and digital technologies

The use of digital technologies is essential for improving performance and securing a company’s future. Successfully paving the way to becoming a digital company is a challenging task as it requires new ways of thinking, changes in the corporate culture and often organizational changes as well. Basically, this is an evolutionary development. Step by step, the company needs to decide which technology is relevant and which projects will move the company forward. Digital technologies are only one side of the coin. One must not forget that the “Internet of Things” requires not only the internet but also “Things”. Autonomous vehicles still need wheels, batteries, seats, windows, sensors and ICT components. “Things”, i.e. physical products, will never become extinct and so must be developed and produced accordingly. Digitalisation helps to connect them in order to achieve greater customer benefit or better efficiency. It may even create the basis for completely new business models. But you can’t do this without the physical products. They will remain in the industry’s field of activity also in the future.

Cyber Security as a basic requirement

The concepts of Industry 4.0 bring together technologies and systems that were previously used independently. In the past, machines, plants and end products operated in isolation and without any data exchange with the environment. Their networking creates major security challenges. Cyber security is one of the critical conditions for companies to successfully exploit the potential of Industry 4.0. This dimension receives too little attention and companies must keep an eye on it.

Effects on people and work

Digitalisation will trigger profound changes in the medium- to longterm period. These are changes not only in products, processes and business models but also in the activities, structure and culture of an organisation. Various professional fields will continue to develop dynamically, as a result of which some professions will disappear and new ones will emerge. At the same time, the requirements and skills needed will increase. Lifelong learning and further training at all levels of the company hierarchy is indispensable in order to maintain the skills and employability of employees. Switching to a new profession will become part of the professional career path for many people. The use of document management systems, intranet portals, collaboration tools and applications on smartphones and tablets will forever change the way work is done. Also, the collaboration within teams and throughout the company will change significantly. This, together with mastering the technological development will bring new challenges for corporate management. The managements must do everything possible to enable rapid changes and promote agility within the company, which also includes introducing a culture of pragmatic experimentation and learning. To do this, the companies must create heterogeneous networks in which the original hierarchy levels dissolve to a certain extent. This means a shift towards participation and a more personal responsibility of employees while managers increasingly take on the role of coaches.

The digitalisation of the industry brings great and exciting challenges in all areas. But it also opens up new opportunities for companies and their employees. It is well worth actively seizing this opportunity.

 

News from ERNI

In our newsroom, you find all our articles, blogs and series entries in one place.

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