The industry faces significant changes as technological development demands new levels of flexibility, speed, and collaboration. To meet future challenges, companies must transform their workflows and build reliable partnerships throughout the value chain.
The world Is changing at an accelerating pace, driven by technological advancements. These changes affect how we work and alter people’s behaviors and expectations. This presents entirely new challenges for the manufacturing industry – but also opportunities. Society is now connected in real-time, and what was once advanced technology for companies has now become an everyday tool in people’s private lives. As a result, there is a paradigm shift in how companies can transform their operations, integrate technology into their businesses, and meet new demands for flexibility, speed, and customization.
Consumer technologies challenge Industry
Twenty to thirty years ago, workplace technology was often more advanced than at home. Today, the situation is reversed – most private individuals have access to intelligent solutions and digital technologies that are often more user-friendly and innovative than those in the workplace. It is already clear that employees increasingly expect to use technologies that they are accustomed to at home, in the workplace. Consumer technology is evolving rapidly, and individuals can quickly test new technology with small investments and low risk. For the industry, the situation is different. It requires significant capital investments, and the risk to the business is much higher if a technical solution doesn’t work as expected. This causes the industry to lag in digital transformation.
A striking example is that seven of the world’s ten highest-valued tech companies primarily target the consumer market. Companies like Amazon, Apple, and Alibaba have revolutionized how we shop and consume through digital platforms. However, similar platforms with the same impact still need to be improved in the industry. This raises the question of whether the industry will be dominated by a few large global platform providers in the future, or if we will instead witness the emergence of a more diverse and competitive market.
Individualization and shorter product life cycles pose new demands
Technological developments are also changing how consumers act. Today, we see a strong trend towards individualization, where people increasingly want to customize their solutions and have real-time information about deliveries and orders. Consumers also expect to control and monitor the products they purchase while demanding shorter delivery times and products with shorter life cycles. These changing expectations place significant demands on the industry, not only in terms of technical development but also in terms of traceability, efficiency, and adaptability along the entire value chain.
The importance of collaboration and trust in value chains
One of the biggest challenges, and simultaneously one of the most significant opportunities for the industry, is establishing solid collaborations between different actors in a value chain. As technology and digitalization revolutionize how we work, it is also crucial that companies and organizations can share data and information efficiently and reliably. Trust between actors in a value chain becomes a critical success factor. A company that does not trust its partners to handle and share information correctly and securely may hesitate to open its systems for collaboration. At the same time, transparency is the key to optimizing value flows and enhancing competitiveness.
For collaboration to work well, technology must support it flexibly and efficiently. Historically, industrial systems have been designed to support internal processes, but in today’s increasingly interconnected value chains, these systems must be able to integrate and communicate across organizational boundaries. This means that the technology must securely enable seamless data sharing between companies, regardless of their different technical conditions and systems. This is one of the biggest challenges – to build digital infrastructures that support collaboration between various companies and allow for real-time information sharing while maintaining high security and protection of sensitive data. Another major challenge is for companies in the value chain to agree on the value generated by data sharing. For some, data sharing creates more value in certain situations than for others. For instance, a logistics company may see immediate benefits from sharing real-time transportation data with its suppliers, allowing for better inventory management. However, the supplier may not gain as much value from this exchange, as the data only marginally improves their production process.
Flexible systems for the future of Industry
The digital infrastructure must evolve as the industry transitions from traditional hierarchical structures to more network-based and open systems. For companies to collaborate effectively in today’s fast-moving and changing market, systems must be adaptable and support real-time communication across the entire value chain. This involves creating a flexible and scalable IT and communication infrastructure where both small and large companies can contribute. In one of our value chains, we built a demonstrator to ensure the quality of a component through a value chain with root cause analysis when quality fails throughout the chain.
Today’s digital platforms, often developed for the consumer market, have demonstrated how effective data sharing and integrated communication can be. The industry now faces the adoption of similar solutions to create equally smooth and transparent systems that facilitate collaboration and information sharing between companies. Such a digital structure would enable companies to respond quickly to changes, optimize their processes, and develop new business models, which is crucial for remaining competitive.
Industry must accelerate its digital transition
Digitalization involves new technical solutions and requires businesses to change their processes, working methods, and culture. Many industrial companies have traditionally focused on internal efficiency, which means doing things right. Still, the future demands a greater emphasis on external efficiency—doing the right things, for example, through innovation and customization.
Manufacturing industries’ future will depend on companies combining technological development with a willingness to collaborate and share data more openly and effectively. By building trust and cooperation in value chains – while developing the technical systems to support these collaborations – the industry can remain competitive even in a future characterized by rapid change and increased complexity.
After several years of successful collaboration, we look forward to sharing this knowledge. During the fall, we will publish articles highlighting the challenges of digitalization in the industry, how we see that companies can address and benefit from technological development, and what we have achieved through the project. We will also emphasize the strength of this innovation collaboration and share participants’ experiences and insights.
We hope these articles will inspire more companies to embrace the opportunities of digitalization and understand the importance of collaboration for a future competitive Swedish industry.
Keep an eye out for upcoming articles on our website!