Digitization, Digitalization or Digital Transformation?

Overview

With the introduction of new technologies on the shop floor and in the different sectors of each business, mainly through well-known Information and Communication Technologies, or ICTs, companies realize that they need to change some approaches. Companies can begin to recognize that adopting these technologies allows them to add value. However, most companies need to learn how far they should take the adoption of these new technologies and what existing problems and issues they can solve with them. 

Although the terms presented in the article’s title can be understood, at first glance, as synonyms or at least similar, they are anything but that. In a simplified way, we can define the three topics as: 

  • Digitization: The ability to transform physical information into digital content, as when a person digitizes a document or creates a file, be it a text document or a spreadsheet. Digitization generally focuses on delivering the best way to make information available in content that the business can store in digital format. 
  • Digitalization: Digitalizing the production processes focuses on adopting new tools and approaches that allow not only digitization but also the exchange of information. That exchange of information can occur between different sectors and departments and, in some cases, between machines or machine-human. When it comes to digitalization, the company is moving towards a paradigm shift, focused on adopting new processes, many of which are collaborative, causing the entire dynamics of the factory to change. 
  • Digital Transformation: Digital Transformation is the most advanced stage, which generally represents solutions that bring more added value for companies. When we talk about Digital Transformation, we mainly talk about process automation. This automation can be simply at the logical level, dynamically triggering alerts and automatically managing stocks and orders. It is also possible to automatize operations on the shop floor level. When a quality inspection tool or maintenance solution is developed to monitor the process and/or the product detects a malfunction (through algorithms running from simple rule-based checks to artificial intelligence algorithms), it can automatically trigger an alert on the shop floor. The software tools can also send that information to maintenance teams, the quality department and, in a more advanced case, even allocate the maintenance team to the process. In this case, we are talking about a straightforward application of Digitization, Digitalization, but above all, the automation of processes described as Digital Transformation. Digital Transformation is one of the fundamental pillars of the fourth industrial revolution, also known as Industry 4.0. 

One of the critical tools for these processes to occur smoothly on the shop floor is the Manufacturing Execution System (MES). The MES is responsible for controlling the entire production process. Thus, it plays a pivotal role in data extraction and digitalization of the process. With all these capabilities, it can also be developed to automate all operations on the shop floor, as it can control and monitor it. 

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