Digitalization and how it transforms traditional industries
Rapid advancements in digital technologies and the widening application of Big Data analytics, Internet of Things (IoT), Artificial Intelligence (AI), and machine learning are propelling a new wave of opportunities for equipment suppliers to support process industry firms’ competitiveness through digitally enabled process innovation (DEPI). Examples include the implementation of autonomous industrial vehicle solutions (e.g., drills, loaders), digital fleet and site management solutions (e.g., site optimization), and real-time production diagnostics (e.g., process optimization). The purpose of these digital innovations is to serve as embodied sources of process innovation for process industry firms. In other words, DEPI increases production efficiency, improves employees’ safety, and reduces environmental impact and life-cycle costs by leveraging on increased operational data transparency and augmented human capabilities.
At DigiProcess, we have closely worked with the Swedish process industry, and we would like to share etc. our latest insights into how companies are navigating and succeeding in this digital transformation.
What is going on in the swedish process industry?
Based on our interactions with industry leaders, we have been able to depict where digitalization investments are leaning towards based on four areas of priority:
- Equipment and process efficiency
- Field support for improved decision-making and control systems
- Productivity and availability of equipment
- Sustainability and energy efficiency for environmental compliance
Do any of these feel familiar? Of course, these areas of priority are relevant for most companies, but successfully transforming them through digitalization requires specialized knowledge and skills often beyond those available in the organization. We have seen how a large equipment supplier had implemented a smart ventilation system in collaboration with suppliers of positioning solutions, sensors, fans, and advanced analytics, reporting a decrease in energy costs of 54 percent for a mining company. Managing digitalization and its implementation calls for collaborative work where new innovative partnerships come into play. Succeeding with digitalization is not something one company can achieve on its own.
Digital needs: What Swedish process industry is looking for in a partner
We have observed how the Swedish process industry is on the look for new partners, where not only digital expertise is required, but openness and a common vision to achieve win-win scenarios. And this is not surprising, as many collaborations fail due to a lack of alignment between the parties, which in the long-term turns into a competition for diverging and potentially conflicting goals. Our research shows how trust-based relationships, cross-functional support, and a pro-active role towards value creation appear to drive the interest of companies to partner with digital providers. While traditional relationships with suppliers are characterized by a transactional approach, digitally-driven partnerships require a more close and adaptive relationship to be able to navigate the complexity of new technologies and their many applications.
Digital partners: Why SMEs are the answer
In our experience, these characteristics and requirements can be found in smaller but highly innovative companies, making them the perfect match to fit the Swedish process industry needs. Whereas large companies struggle to prioritize digital innovations, smaller companies represent the answer to speed the process leading the way in the digital transformation. We are talking about SMEs whose experience, mindset, and knowledge allow them to stand out and quickly react to digital demands. Our data shows that many of these small digital providers are market pioneers in the design and development of the latest techniques, systems, and solutions for complex industrial environments. This is a relevant aspect if we consider that being able to implement such innovations can provide a long-term first-mover advantage through continuous upgrades coming directly from its developers. And beyond technology, their ability to provide excellent customer support is based on their adaptation to customer needs, powered by their collaborative approach and market intelligence.
Want to know how to leverage on these collaborations? Get in touch!
The potential for joint value creation is evident but, we should not forget that no partnership comes without challenges. Differences in working cultures, the pace of operations, cybersecurity, and digital maturity, to name just a few, can quickly transform initial excitement into despair if not managed properly. At DigiProcess, we are also well aware of these challenges, and we aim to support the transformation of the Swedish process industry providing the tools and resources needed to minimize the risks and exploit the potential of the digital age. If you would like to know more, please do not hesitate to get in touch with our team to discuss how we can support your business!
Patricia Carolina Garcia Martin, Researcher, Entrepreneurship and Innovation, Luleå University of Technology, patricia.garcia@ltu.se
Main contact and inquiries:
Peetu Virkkala, DigiProcess Project Researcher, University of Oulu, +358 45 644 3202, peetu.virkkala@oulu.fi
Jani Sipola, DigiProcess Project Manager, Lapland University of Applied Science, +358 50 316 7677, jani.sipola@lapinamk.fi
