Resilience through digitalization – crisis resistance through digitalization
The coronavirus pandemic has made one thing unmistakably clear: Digitalization creates resilience in crises and beyond. This is proven by numerous examples from the business world – including mechanical and plant engineering.
Yet how exactly can digital solutions be deployed in the industry to realize the necessary level of resilience?
The COVID-19 crisis fundamentally changed business and social life overnight. Suddenly, strict distancing rules applied. Entire workforces were forced to switch to working from home within a matter of days. The term “workforce disruption” has become established to describe this scenario. To make matters worse for industry, global supply chains were disrupted and logistics networks collapsed (supply chain disruption). See also the study by Pwc.
At an early stage of the COVID-19 pandemic, it therefore became clear that companies with a high degree of digitalization would weather the crisis better than their “analog” competitors. They were in a position to implement smooth collaboration in the “new” working world much more quickly. Likewise, they already had solutions with which logistics and production could be remotely monitored, controlled and even (partially) automated. Therefore, despite a reduced workforce and compliance with hygiene standards, it was still possible to continue production during the crisis.
There is no doubt about the fact that digitalization promotes resilience in companies. But what conclusions can we draw from this for the future? What measures do companies from the plant and mechanical engineering sector need to take in order to successfully continue on the path of digital transformation they have already embarked on and thus increase resilience?
Three key areas of action to strengthen resilience
In order to be resilient in crises, businesses must become significantly more flexible. This applies in particular to the following three fields of activity. The following consideration shows how these fields of activity can be concretely represented in order to increase resilience.
I. Digital transformation of the work environment
In order to be more resilient, this requires digitalization and flexibilization of the working world. With the help of software solutions, employees must be able to communicate digitally with each other regardless of where they work. Solving this technically is no longer a major challenge. Numerous tools exist today that enable teams to stay connected and collaborate digitally.
The design of the new working world becomes more challenging when it comes to the end-to-end provision of information and data. This can be solved in the administrative area by providing remote access to common software solutions such as ERP, CRM and DMS. However, in the production environment, the situation is much more difficult. There are many places where not all machines are networked with the Internet. As a result, it is not possible to monitor all relevant information from production regardless of location. Nor can production processes be controlled “remotely” in this case. We have described how these deficits can be made up for in the section “Digitalization and automation of production.”
II. Digitalization of supply chains – resilience through “early warning systems”
Supply chains are complex and international. Thus, even one crisis in a particular region of the world is enough to disrupt sensitive structures. A certain degree of resilience can be realized through purchasing tools such as multi-supplier strategies and more regional sources of supply. However, in a global economy with multi-layered interdependencies, organizational measures of this kind are inadequate for implementing sufficiently resilient supply chains. Rather, transparent information on global incidents and rapid action in the event of imminent crises are required. This can only be achieved through digitalization, cross-company networking and the continuous analysis of real-time data.
In the best case, supply chains are digitalized to such an extent that all parties involved can view the current inventories and planned production quantities of all partners in real time. The same applies to inventories that are currently in transit. The first digital “early warning systems” are even able to proactively warn when bottlenecks are on the horizon based on such information.
III. Digitalization and automation of production
In order to remain capable of acting in the event of a crisis and to flexibly adapt processes, production must become digital. For example, the following measures can be taken:
- Digital mapping of production processes with the use of digital twins
- Realization of remote control options
- Use of remote maintenance (also preventive)
- Software-supported automation of production processes
The prerequisite for achieving all these goals is the networking of all plants, machines and (intermediate) products via the Industrial Internet of Things (IIoT). The corresponding sensor and communication technologies already exist. Capturing and transmitting relevant information is not an insurmountable hurdle. Far more problematic is the complexity and heterogeneity of a wide variety of components in a manufacturing plant. For example, machines from a wide variety of manufacturers are in use. The respective IT infrastructures, supply chains and organizational forms are just as diverse.
Particularly for medium-sized industrial companies, it is hardly possible to develop systems for such complex scenarios on their own, both financially and in terms of the necessary expertise. Only through collaboration in the industry will it be possible to consistently drive forward digital solutions in mechanical engineering.
Digital economy can better master crises
Overall, it is clear that there is no way around a strong digital economy. Transparency of information, end-to-end availability of data, and the ability to digitally control end-to-end manufacturing environments are paramount to resilience in a crisis. ADAMOS, with its unique offering of network and technology for mechanical and plant engineering, is making a decisive contribution to strengthening the resilience of German companies. In addition, this approach helps industrial companies be more competitive in global markets, even independently of crises.