ARC Advisory Group highlights the focus and strategies of 25 industrial companies successfully making the digital transformation.
Implementations of connected industrial technologies that make use of artificial intelligence (AI) and data analytics are becoming more prevalent and being used to address issues ranging from labor shortages and supply chain disruptions to climate change, according to ARC Advisory Group. The advisory group’s tracking of digital transformation progress across industry is now available in a report highlighting 25 companies that have proven successful at integrating new technologies into various areas of their businesses.
In this article, Automation World summarizes key findings from the ARC report and spotlights the strategic digital transformation approaches of the top 10 companies.
Key Findings
According to the report, the goals of digital transformation initiatives are moving from a core focus on improving production efficiency to include the establishment of more resilient and responsive business models. This shift comes in response to external pressures such as material shortages and expectations from governments and customers for businesses to become more environmentally sustainable across their entire supply chain.
Looking across the companies recognized in the report, ARC notes that no single indicator appears to be universally correlated with the companies’ digital transformation approach. However, certain factors do seem to be correlated with the success of digital transformation initiatives. Notably, the most successful companies have adopted digital technologies in response to specific external market signals, problems, or disruptions. When these narrow, well-defined issues motivated change, businesses saw far more positive results, according to ARC.
The Top 10
Tesla: When Tesla seeks to automate a new internal process, it attempts to do so as effectively as possible from the start, rather than engaging in multiple, subsequent revisions. ARC explains, “Their business model is built on the tenet that the vehicles are more like interactive computers with wheels, leading to the creation of an intelligent data platform and connected ecosystem, enabling Tesla to learn from and serve its customers. This is an example of a company that is comfortable with digital transformation and adapts to business challenges with greater ease.”
Intel: Digital transformation initiatives focused on connectivity have allowed Intel to run its semiconductor manufacturing process 24 hours a day, seven days a week, 365 days a year. Intel focuses primarily on connecting data insights with engineers who can solve specific problems, rather than merely maximizing data extraction. Digital twins and simulations also play a large role in optimizing factory output. In particular, Intel’s deployment of Internet of Things (IoT) technologies and predictive analytics at scale have decreased the company’s time to market, improved resource utilization, increased yields, and reduced costs.
BMW Group: BMW emphasizes its digital transformation on data analytics, intelligent logistics, and additive manufacturing—not just for prototyping, but mass production to create parts for customized vehicles. “By additively manufacturing metal and polymer parts at various points in the process chain and different sites across the global network, [BMW] has transformed its production processes,” ARC says.
Johnson and Johnson: The digital strategy at Johnson and Johnson includes cross-functional partnerships and development of a new culture around digital tools such as the use of AI in product development, additive manufacturing, IoT connectivity, and automated order fulfillment. The company primarily uses IoT connectivity to track and trace products throughout its entire supply chain—from suppliers to hospitals. Having IoT access to information in real-time allows Johnson and Johnson’s quality assurance procedures to manage the temperature of vaccines or other medical substances, regardless of where they are located at any given moment.
3M: Currently, the company has connected 240 plants and distribution centers to monitor the flow of products. Previously, 3M allowed individual facilities to operate autonomously using a localized subsidiary structure. Its digital transformation efforts have allowed it to achieve greater alignment and standardization across its plants. 3M is also using an AI platform to develop and deploy applications related to predictive healthcare and supply chain analytics.
Eli Lilly: Safety and quality receive special notice in Eli Lily’s digital transformation. For instance, the company has reduced ergonomic risks to employees by deploying robots to lift heavy boxes. In addition, real-time analytics have replaced after-the-fact testing to improve the efficiency of the company’s quality assurance procedures.
Deere and Company: Digitalization has been used by John Deere to achieve more dynamic logistics and production planning, improve the visibility and accuracy of materials throughout its global supply chain, and deliver customized user instructions in real-time. The company has also increased its investment in 5G to aid in the greater adoption of edge computing, autonomous devices, real-time location systems, asset tracking, inventory management, wearables, and robotics.
Procter and Gamble: A multi-cloud data strategy and a “culture of data” used to inform business decisions are at the core of Procter and Gamble’s digitalization efforts. The company sees data and algorithms as key tools for constructively altering how it operates. Among the goals of Procter and Gamble’s digital transformation strategy are: Greater collaboration among employees; evolution of new products; improved production systems; supply chain and distribution optimization; and better customer relations.
Volkswagen: At Volkswagen, the use of robotics to replace human labor for ergonomically challenging assembly tasks has been a major focus. The company also uses computer vision to increase manufacturing efficiency at its factories. Vision sensors are used to gather optical data, which is then evaluated using AI technology capable of recognizing, processing, and analyzing images. According to Volkswagen, this has resulted in significant reductions in energy use.
Nestlé: The digital transformation strategy at Nestle is known as Vision2Life and has four priorities: Bring value to those who receive IT services; operate as a single global IT team with pockets of local expertise; interlock product management with business stakeholders; and make IT a technology differentiator. Technologies adopted by Nestle include analytics, AI, and e-business. In addition, all of the company’s factories are equipped with collaborative robots. Everyone from procurement, manufacturing, sales, and marketing are involved in the company’s digital transformation process, which is focused on: increasing product innovation, capacity, and availability of goods while decreasing costs.
See ARC’s full Industrial Digital Transformation Top 25 report.