By leveraging data, smart technologies, advanced analytics and manpower, companies can provide better products and services, optimize their value chains, and maximize return on capital. Effective data-sharing applications are essential to define key success factors and to enable manufacturers and enterprises to derive value from their data.
A World Economic Forum analysis suggests that the potential value to society and industry could be as high as $20 trillion by 2025 from the digitalization of just four industries (automotive, logistics, consumer goods, and electricity) cumulative to 2025.
Digital transformation could impact electricity operating profits by nearly 50%, whereas they estimate the effect could be less than 10% for automotive.
The World Economic Forum states that “the differences between industries are primarily a function of the maturity of digital disruption in the industry and the pace at which initiatives have a significant impact.”
Welcome to the World of Digital Twins
The value network of a business consists of multiple parties and entities, such as customers, partners, subcontractors as well as all the people involved. Each one of these entities in the value network chain can now be represented not only by a physical presence but also their digital twins. Think of it as a virtual representation where the physical is mirrored digitally.
According to Wikipedia: “A digital twin is a digital replica of a living or non-living physical entity. Digital twin refers to a digital replica of potential and actual physical assets (physical twin), processes, people, places, systems and devices that can be used for various purposes.”
Both businesses and people in a value network can have digital representations through e.g., Facebook, Twitter, LinkedIn, Instagram, or via websites. All these digital twins can be different. The sum of these is creating a multi-dimensional value network with nodes that are multi-dimensional.
The use case scenario is vast and varied. Take a farm or manufacturing plant as an example. The business can first decide to install video cameras overseeing the packaging plant and/or various simultaneous sites; solar energy panels for natural energy to support the power generator and all be connected to a mobile phone app to review, control the output, and foresee upcoming potential outages or shortcomings.
Or perhaps there are IoT sensors in place to monitor the rain yield and/or machine production. With Digital Twins and digital transformation, the buck doesn’t stop at just installing a few smart IoT solutions.
“The biggest thing is the journey you are about to embark on,” says Hans Lundberg, Advisor – Think Tank. The seasoned expert in organisational development adds: “Usually we see enterprises start with targeting one or two uses cases, but as they start to see the merits it leads to more new ideas and ways of finding business solutions that are cost-effective.”
Digital transformation is a journey
“The thing with introducing digital transformation as a concept to your business, is that you really need to also be ready for the many gates you have to get past as part of the journey”, says Lundberg.
Once you begin to get past these gates and unlock the invisible value, there is a whole other type of journey one can expect. “There’s the journey of the data and its learnings; of introducing the technological component then measuring its effective use by your staff and what they’ve learned as part of the journey,” adds Lundberg.
Today’s manufacturing companies have a great strategic opportunity: the chance to use advanced data gathering and analytics to drive productivity, improve customer experience, and foster societal and environmental benefits.
Those that embrace the opportunity are turning their supply chains into hyperconnected value networks for sharing data across company boundaries and collaboratively managing the flow of goods around the world.
One catalyst for this change is uncertainty in the current economy and the world at large brought on by megatrends such as rising global temperatures and COVID-19. The other driving force is that more enterprises a pushing the demand for 5G and private telecommunication networks such as LTE due to the increasing need for privacy and cyber security.
Where once such technological advances in IoT and telecommunications was a “nice to have”, Lundberg says “it’s become so important right now that most organisations already have strategies for these technologies.”
Increasingly, business leaders see the innovative use of data as a stabilizing force in their industries. The benefits include increased productivity, improved quality, reduced environmental impact, and more effective innovation.
The road from operations to unlocked invisible value, where the end goal is profitability, may begin by employing a few Digital Twins or IoT sensors but the complete journey relies on the people as well as the data and technology.
“We recommend businesses to include formulating an outside-in strategy (through shifting the focus from managing inputs to delivering outputs), creating a culture of iterative innovation and learning on the job while championing the overall customer experience,” concludes Lundberg.
Advisor - Think Tank
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