I takt med att digital teknik och artificiell intelligens (AI) förändrar många branscher, kämpar den traditionella industrin för att hålla jämna steg. Trots intresse finns det flera faktorer, som organisatoriska silos och brist på digital strategi, som bromsar utvecklingen.
At a time when digital technology and artificial intelligence (AI) are revolutionizing many industries, the traditional industrial sector is struggling to keep up. Why is this sector, which has long been the backbone of our economy, at risk of falling behind? Let’s look at some challenges slowing down the industry’s digital transition.
Siloed organizations
Many industrial companies are organized into departments that work separately to solve a specific function or task as efficiently as possible. This is often referred to as silos. This approach has worked well in the past, but it has become a barrier in today’s fast-paced world. To leverage new technologies, companies need to improve cross-departmental collaboration. The built-in silo mentality needs to be replaced with cross-functional and flexible teamwork.
Time-dependent constraints
Historically, the industry has had a strong focus on efficiency. Employees fill their days with work and don’t have much time for other things. Efficiency can be divided into “internal” and “external” efficiency, where internal efficiency is about doing things the right way, and external efficiency refers to doing the right things. Many companies spend so much time on internal efficiency that they have no time to focus on external efficiency. For companies, it’s crucial to find a balance between internal and external efficiency, or they risk losing their competitiveness.
Long lifecycles of machines
Industrial machines were historically built to last long and produce on a large scale. This was good for the economy when the focus was on mass production, but it made it harder to adapt to new demands for flexibility and customized production. To profitably shift to a more flexible production for small series, efficient information solutions that control production are needed, and in many cases, new equipment that can be more automatically controlled is also required.
New technology investments
To begin working in a data-driven way, a digital infrastructure is needed to collect, organize, and analyze data. Implementing digital solutions require significant investments, and knowing when the investments will pay off can be challenging Investing in digital infrastructure alone may not immediately produce returns. It often requires additional, complementary investments—such as in technology, training, or supporting infrastructure—before the full benefits of the initial investment can be realized. Therefore, using business cases and return-on-investment (ROI) calculations for these investments can be complex. Additionally, it is complicated to test new systems with new technologies without disrupting daily operations. This makes many companies hesitant to leap into digital technology implementations and corresponding investments, causing the industry as a whole to fall behind.
Security concerns
Manufacturing industries often handle sensitive information, and information management plays a vital role in achieving flexible production. When everything becomes digital, the risk of data breaches increases, and critical company information can end up in the wrong hands. This naturally raises organizational security concerns which in turn can slow down digitalization.
Lack of digital knowledge
Although many companies are interested in digitalizing, they often don’t know where to start or which technical solutions are best for them. The lack of knowledge makes it challenging to make the right decisions about investments in digital technology. As a result, daily production and business as usual activities tend to come first, and investments in digital technologies generally fall behind.
Resistance to change
Digitalization often entails significant changes in working methods and organizational structures. This can meet resistance from employees accustomed to established practices, which can hinder the implementation of new digital solutions. Therefore, it is essential to work with change management and involve employees early in the process.
Lack of a clear digital strategy
Many industrial companies lack a clear and comprehensive digital strategy. Without a clear vision of how digitalization should be carried out and what goals should be achieved, digital initiatives risk becoming isolated and ineffective.
Challenges with data management
Digitalization generates enormous amounts of data. Collecting, organizing, analyzing, and utilizing this data requires new skills and systems that many industrial companies have yet to fully understand and implement. Successful use of Artificial Intelligence (AI) for instance, requires a digital infrastructure for access to high-quality data.
The way forward
In Sweden and the Nordics, we have a unique culture of collaboration. This may be one of our most significant competitive advantages compared to the rest of the world. We have long been used to working together for survival in these northern latitudes. Collaboration is essential to succeed in something as complex as digital transformation and AI. If we can learn from and help each other, we can take more extensive and faster steps than those who work alone. We will cover this in the next section, focusing on how an increased number of industrial companies are taking steps towards their digital transformation.
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!