DIGITRANS - INDUSTRY 4.0: DIGITAL TRANSFORMATION IN THE MANUFACTURING INDUSTRY

09-04-2019

The latest breakthrough of information technologies, such as the Internet of Things, cloud computing, artificial intelligence, blockchain and big data, has stimulated the development of Industry 4.0 – the integration of digital and physical entities resulting in digitalisation of processes, smart manufacturing and intercompany connectivity [1]. Lately it is a frequently discussed topic since it creates a potential to affect the entire manufacturing industry by transforming the ways products are designed, manufactured, delivered and payed [2], thus potentially leading to social, economic and environmental furtherance.

Manufacturing small and medium enterprises (SMEs) have to strive for Industry 4.0 and consider possible technological advancements as well as their suitability, implementation and impact on industrial value creation [1]. Consequently, it is also crucial that SMEs contemplate the transformation of their current business model into digitized one, which can be achieved by utilizing the method developed by the DIGITRANS project. The DIGITRANS method is designed to supports SMEs in developing and implementing their new digital business model by offering appropriate innovation methods to develop a new digital business idea and begin to deal with sustainable implementation of the new digital business model [3].

Manufacturing SMEs can benefit from the digitalization of their business models. For example, digitalization of processes enables collecting data from the production line and potentially identifying bottlenecks or current production status, thus decisions can be made faster and production can be increased. Online platforms enable customers to place orders and facilitate the communication with customers or suppliers and also within the company. On the other hand, manufacturing SMEs might have to invest a vast sum of money in infrastructure, personnel and trainings in the short-term, but gains may gradually develop [1]. For example, the production might be slightly decreased while upgrading the production lines. Data security also needs to be addressed.

It is very important that manufacturing SMEs realize that changes within the company need to be gradual. One interesting example demonstrates a Slovenian manufacturing SME Optotek that specializes in developing high quality optical and laser solutions and technologies for applications in medicine and life environmental [4]. This SME has already collaborated with many high-tech companies, such as Alcon (a Novartis division).  As all the production takes place in-house, Optotek has a strong research and development. It has already patented technologies and extended the research department. Several research projects have either been co-funded by Slovenian Research Agency, the Ministry of Economy of Republic of Slovenia or by the EU [4]. Their aim is to increase the sales in the next few years.

Industrial sector presents a key factor of economic growth, responsible for 75 % of all exports and 80 % of all innovations in Europe [1]. It is therefore of utmost importance that manufacturing SMEs contemplate digital transformation since they can benefit from it in the long-term: they can increase their range of products, provide custom-tailored products and additional services. Potentially, this can guarantee new business opportunities and new sources of income.

 

 

[1] J. M. Müller, O. Buliga and K. Voigt, "Fortune favors the prepared: How SMEs approach business model innovations in Industry 4.0", in Technological Forecasting and Social Change, vol- 132, pp. 2-17, 2018.

[2] E. Hofmann and M. Rüsch, "Industry 4.0 and the current status as well as future prospects on logistics," in Computers in Industry, vol. 89, pp. 23-34. 2017.

[3] DIGITRANS website. Accessed: Mar. 26, 2019. [Online]. Available: www.digitrans.me

[4] Optotek website. Accessed: Mar. 26, 2019. [Online]. Available: https://www.optotek-medical.com/

Programme co-funded by European Union funds (ERDF, IPA, ENI)