Digitalization is here to stay, even if the definition is still a bit fluid
Manufacturing and construction industries are buzzing about a new term, “digitalization.” Every think tank and every company that wants to be seen as a thought leader is talking about digitalization. It seems as if engineering and manufacturing technology made a hard right turn into the land of the Jetson’s. Research papers, web sites, and white papers are filled with terms like “Industry 4.0,” “The Internet of Things,” “Digital Thread,” and “Digital Twin.” Each of these concepts are aspects of a larger, more fundamental transition now happening across industries as they grapple with making their product development processes better, faster, and cheaper.
Definitions have yet to standardize. Gartner defines digitalization as “the use of digital technologies to change a business model and provide new revenue and value-producing opportunities.” For construction and manufacturing, we extend Gartner’s definition by adding “… using a continuous two-way digital data flow from initial design to end-of-life.”
Digitalization looks to track the design, manufacture, operation, and end of life of products or built assets as they flow through the creation process and extended supply chain. Sensors are used to record key measurements such as rotations, moisture, and weight, as well as other operational and environmental characteristics so maintenance can be proactive and efficient. All these data points, when combined in proper context, creates the backbone of digitalization.
The evidence of digitalization is already visible. A recent survey says 77% of automotive OEM’s are working to become “pure mobility providers.” All manner of products are being equipped with sensors, CPUs, and Internet connectivity. In 2016 there were more new Internet connections for sensors and other peripherals than for smartphones and PCs. Today there are more than 8 billion devices connected to the Internet; by 2030 that number is predicted to be more than 1 trillion.
Here is a simple example of what a digitalized product can be. An ordinary shovel is sometimes called “the idiot stick” among construction workers. But if a shovel were equipped with a weight sensor and a moisture sensor, it could create and send data that told how much dirt was being moved and provide data on its moisture content. Or perhaps it has a sensor to detect arsenic or other dangerous chemicals. “Idiot” no longer seems a fitting title for either the tool or the person using it when something so simple as a shovel becomes digitalized.
As with every innovation, adoption of digitalization has already begun and is widely varied in application. While too many manufacturers still struggle over investing in software to organize engineering documentation, companies like Caterpillar are aggressively investing in digitalization of all their products and services. “We intend to be the leader here in terms of asset management, product health, productivity, safety, sustainability, and predictive analysis,” says recently retired Caterpillar CEO Doug Oberhelman. “[Soon] every one of our machines will come off the line being able to be connected and provide some kind of feedback in operational productivity to the owner, to the dealer, and to us.” The goal, he explains, is to “show the customer on his iPhone everything going on with his machine, his fleet, its health, its run rate, its productivity, and so on.”
The implications of manufacturing digitalization touch every “chain,” best practice, and stakeholder. The buyer of a shovel or an earthmover have the same goal; they don’t want a piece of equipment, they want dirt moved from Point A to Point B. The digitalized shovel still needs considerable human intervention, but a self-driving earthmover will be able to read the digital site plan, scrape dirt with three-dimensional accuracy measurable in millimeters, and report when it needs the gas truck to come by or if a bearing is about to fail. The value the digitalized earthmover adds to the construction process is transformative for existing work processes and for its predictive capability. Digitalized products and processes become integral parts of a new class of product, the product-service system.
The big names in automotive already realize they have to move from delivering product to providing transportation services. Cadillac, for example, offers a new lease option that allows substitution of one vehicle for another on a regular basis. A leaseholder can move from an SUV for the winter to something more sporty when summer comes. The digital personalization available in every Cadillac automatically moves from one vehicle to the next. Imagine moving to a new car every three months and not having to input your favorite radio stations each time. The “connected car”phenomenon (Internet-equipped for both the driver and the car’s use) is extended, providing continuity from one vehicle to the next.
Digitalization is an integral part of mass customization, as the factory itself becomes a digitalized asset. Traditional manufacturing can’t retool fast enough in a digitalized setting unless the factory is as task and situation aware and intelligently connected as the products it creates.
Construction companies and manufacturers who chose to ignore the rising tide of digitalization will get left behind. Digitalized product-service systems will be more customized and customizable, more responsive and aware, and more able to participate in their operations and maintenance than today’s product. Manufacturers creating digitalized products will be able to offer availability guarantees, or swapping of one product-service system for another — as Cadillac does for its leaseholders.
Digitalization requires new thinking around everything about the product development process. Design will change with the adoption of “intelligent” tools such as generative design and predictive simulation. Manufacture will change due to the increased use of machine learning, additive manufacturing, robotics and cobotics (intelligent tools that augment human action instead of replacing it). Product iteration will change as big data analytics and Internet of Things connectivity supply a stream of data that can be used to improve and innovate more in tune with the rhythms of the market.
Randall S. Newton is Managing Director of Consilia Vektor.
Keywords: digitalization, business models, Industry 4.0, digital twin, digital thread
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