Digital Transformation Value Indicators for a Sustainable and Circular Economy
Digital transformation is a megatrend in the manufacturing world . It is a caterpillar to butterfly journey that is focused on the application of digital technologies and the realignment of the organization to improve processes , resiliency and agility for the production floor .
Many companies over the past five years have been working to move their manufacturing organizations from a disconnected , paper based , operation to a connected factory floor through digital transformation . The journey begins by identifying the “ pain points ” of the operation , assessing current automation and IT infrastructure and planning to digitize data ( paper-based data to digital data ) and digitalize processes . The objective is to increase visibility and ultimately predictability for operations , equipment and material flow .
The quest for connected factories has evolved and it has become more apparent that not only does digital transformation improve business results , but it can also provide a path toward sustainability and lowering demand on resources and contribution to global climate change .
As resources have become increasingly more expensive , supply chains more dynamic and customers demanding for more environmentally manufactured goods there is an additional focus on many companies to incorporate sustainability and circular economy principles into their digital transformation strategies .
This article will explore the relationship between IoT systems , digital transformation and sustainability initiatives . It will also focus on the concepts of sustainability and circular economy that are delivered by smart factories and the impact that digital transformation plays in shaping value drivers and outcomes . Future articles will be shared on how smart operations ( planning , logistics , product design and procurement ) plays an important part in achieving greater sustainability and impact .
To understand what part digital transformation and smart factories play in supporting sustainability , it is first best to identify the main digital capabilities and technologies that enable operational efficiency , agility and resiliency .
The Digital Transformation in Industry whitepaper [ 1 ] ( section 2 ) published by the IIC in July 2020 has identified a number of key emerging and emergent technologies that underpin digital transformation in an industrial context . The diagram below illustrates some of these technologies and the vertical spaces that they impact , including manufacturing .
Journal of Innovation 137