What is Digital Transformation or Digitalization?

What is Digital Transformation or Digitalization?


What is Digital Transformation or Digitalization?

14 Jan, 2021

This article will discuss:

  • The digitalization of the factory, its processes, and the role of data analytics
  • Digital transformation technologies and the role they play in accelerating digitalization strategies and Industrie 4.0 business models
  • What industrial enterprises stand to gain by implementing digital transformation initiatives

The road to complete Industrie 4.0 implementation is paved with small digital steps which transform traditional industrial processes using digital technologies. Today, approximately 91% of industrial enterprises are going through a digitalization of the factory floor and its processes whether they recognize these changes or not. To understand where your factory floor and its processes stand in the journey to full Industrie 4.0 implementation, knowledge of what the digital transformation is required.


What is the digitalization of the factory floor?

The well-known definition of digitalization which applies to every niche refers to the conversion of information or physical content into digital form. In the information age, the photographer, videographer, engineer, and physician execute one form of digital transformation or another on a regular basis. With the addition of the term “the factory floor”, more context must be applied to the popular definition of digitalization.

Digitalization of the factory floor encompasses the application of digital technology to capture, store, convert, process, and gain insight from (or into) both physical data and virtual data. On the factory floor, every process aimed at capturing data in digital form can be termed as a digital transformation process. These processes include simpler use cases such as converting handwritten supply chain data to digital records using an Excel sheet or an advanced Manufacturing Execution System (MES).

Larger-scale digitalization of the factory floor also abounds and is the forerunner to Industrie 4.0 implementation. An example is the deployment of the Industrial Internet of Things (IIoT) solution, which consists of both hardware and software, to capture data and support both centralized and decentralized data analytics, as the case might be. Whatever the scale of a digital transformation project may be, the result is to simplify access to data, gain insight into complex processes, and automate industrial operations.


What are the digital transformation technologies or solutions?

To successfully pursue a digitalization of the factory floor appropriate deployment of the right technologies is required.


What are these technologies?

Digital transformation technologies refer to the tools used to capture, store, analyze, and visualize factory-related information. Digital transformative technologies can be categorized under hardware and software applications used to execute the transformative process. Although tens of technological tools with diverse specifications make up the list of digital transformation technologies, IIoT hardware, edge computing hardware, human interface hardware, the industrial cloud, communication networks, and on-premise storage systems captures the essence of the diverse technologies used to implement digital transformation.


How do they function within the factory floor?

Starting with the digital transformation hardware, IIoT devices, smart devices, and edge devices, are deployed on the factory floor to capture data from specific equipment or processes. These data-capturing hardware devices can be diverse in terms of their computer processing abilities – from a simple temperature sensor to an advanced HMI with reporting and edge analytics capabilities.

From the software end, the digital transformation is powered by centralized computing platforms such as the industrial cloud and mobile or web-based applications for analyzing data. The application of digital transformation technologies is dependent on the strategy or Industrie 4.0 business model an enterprise chooses to implement. An example is the implementation of a data-driven plant performance optimization model which will rely on improving equipment throughput and reducing downtime.

In the above scenario, IIoT hardware will be attached or plugged onto individual items of equipment involved with the production process to track parameters such as machine operation duration, amount of throughput produced, and unplanned downtime. The data captured is then transferred to a centralized computing platform through wired or wireless networks. Using the captured data and specialized industrial software, calculations such as overall equipment efficiency levels and the sequence of downtimes can be determined. The insight these calculations and analysis provide is then used to optimize machine productivity or reduce unplanned downtime.

The above example highlights the interconnected processes that drive digital transformation initiatives and ultimately Industrie 4.0. When applied to multiple pieces of equipment with varying communication protocols or technologies on the shop floor, the need for a unified architecture that supports the capture and transfer of data from diverse equipment comes into play. The OPC Foundation currently provides actionable guidelines for pursuing the digitalization of factory floors with disparate equipment types.


EXOR Edge devices


What benefits does the digitalization of the factory floor bring?

The benefits that digitalization brings to the industrial sector are varied and affect every aspect of a factory’s operation including interrelated processes such as supply chain management and demand forecasting. The short answer to what benefits a digitized factory brings is that they enable factory owners and facilities to introduce Industrie 4.0 and the industrial automation it supports to the factory floor. Other benefits are basically subsets of what Industrie 4.0 aims to accomplish, which is the lights-out factory that guarantees increased safety on the factory floor through digital transformative solutions.


What exactly do you stand to gain?

Digitalization of the factory floor provides the framework factory owners require to optimize every process within the shop floor while reducing operational cost and remaining competitive. If your factory workers experience downtime due to regular equipment breakdown, capturing breakdown data to understand the underlining cost becomes possible with Industrie 4.0.

Tired of missing production deadlines and dealing with unhappy customers? Digitizing the demand forecasting, supply chain, and inventory management process ensures orders are updated automatically. Stockouts become a thing of the past through the implementation of a data-driven management process.


Do factory workers routinely complain about the slow material handling and transportation process?

Employ the use of digital technology to automate the material handling system and drive just-in-time deliveries that ensure every workstation gets its supplies in record time. By now, you must have gotten the picture concerning the benefits of a digital transformation of the factory floor. Digitalization of the factory floor can be applied to any and every process you choose to optimize, and the benefit becomes an optimized process that reduces recurrent costs and keeps floor operators safe.



With advancements in the digital transformation technologies vendors offer comes the ability to optimize any specific process within the factory floor while reaching for the ultimate goal of full industrial automation. Factory owners are expected to take advantage of the digital transformation in unique ways to alleviate the specific challenges they face with production on the factory floor. While your competitor may apply digital technology to simplify inventory management, you can deploy the digital to optimize the entire production line within your factory.

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