Industrial Engineering and Digitalisation2017-11-01
*Based on the Presentation with the same title from the SAIIE27 Conference 2016.
What is Digitilisation?
In order to understand where digitalization comes from, let’s start with the industrial revolutions. First, 1784, mechanical production was enabled by water (steam) power. In 1870 mass production was possible using electrical energy. By 1969 electronics and information technology (IT) made it possible to start automating. The fourth industrial revolution is said to currently be under-way and is driven by technological transformation forces.
Terms like BIG DATA, Cloud Technology, Artificial Intelligence and Internet of Things are abundant and every major player in all markets are talking about Disruptive Innovations.
This is where Digitalisation comes in. There are many definitions of this term and not all of them seem to be aligned. Digitisation, for example, enables Digitalisation and Digital Transformation and each term means something else, yet they are still related. For the purpose of this blog, digitalization is the process of leveraging theses technological transformation forces to reach a higher level of digital maturity in order to adapt to rapidly changing economic and market conditions.
Why is digitalization so important and why is everyone going on about it? A good example is that half of fortune 500 companies have disappeared since 2000  and many experts believe it is due to this “Fourth Industrial Revolution” being driven by digitalization.
If we take the manufacturing industry as an example, it has become best practice to virtually validate all processes before physical implementation through using what is called the digital twin. Referring to the image below and taking the simulation space as an example, companies can plan assembly operations, robotics processes, logistics, and even ergonomic implications all virtually with current technology. Planning these aspects virtually enables hundreds or even thousands of iterations to be analyzed in order to select the most optimum solution. This decreases risk as well as identifying costly mistakes before they can occur.
Industrial Engineering and Digitalisation
Looking at these aspects it becomes apparent that this is exactly what Industrial Engineers (IEs) are trained to do. Increase production, maintain quality and decrease costs are some of the fundamental concepts which IEs are taught and aim to implement once in industry. Leveraging the digital twin allows IEs to better analyze and implement solutions in order to obtain these concepts.
Understanding how all these technologies fit together also requires the system thinking of an Industrial Engineer. It is important to note at this stage that all these newest technologies are still just tools. Redesigning business processes and models to adapt to these newest technologies is where more potential value lies.
The questions that arise from what has been discussed up to now is, what role IEs will play in this ever-changing digital world?
Well, someone needs to understand how everything fits together. IEs are trained to understand systems, from detailed statistical analyses to a holistic view. Due to this, they understand the interactions between these different systems and this is where the true value of digitalization lies. Digitalisation requires the entire value chain to have an integrated digital twin which means all departments/business units need to have access to the correct data at the right time in order to be more aligned. IEs will most probably be vital in ensuring that this is achieved.
Another industry trend that is arising is that companies can no longer do everything themselves due to the rapid rate of change and have thus started developing partner eco-systems. Again, IEs are ideal to manage these systems due to their business-mindset. I have met many top executives who say they should have studied industrial engineering or want to study it post-grad. I believe this is due to the business side of Industrial Engineering where additional training in subjects like law and accounting truly make them unique in the engineering world. They are the vital link between business and engineering.
Digitalization in South Africa
We need to become globally competitive. You no longer compete with someone down the road or even a thousand kilometers away. With globalization, anyone on the planet is potential competition.
Referring to the images below; If we look at GDP per capita as an Economic and Growth Comparison it becomes very apparent that SA did not fully embrace the 3 rd Industrial Revolution as some of the traditional automation-focused nations. This is most probably due to many factors from that time but if we compare to Korea (South) who embraced automation in more recent years it shows that we are missing something. Comparing further with the other BRICS nations it can clearly be seen that China has been doing something right and it is known that they have become a global competitor in all markets. Adopting more of the latest technologies available could help South Africa become more competitive internationally and ultimately improve our GDP per capita.
We have seen from the industry that many companies are too busy fighting fires to start thinking into the future. Another prominent occurrence in some smaller companies is that they have been doing business in a certain way for many years and they see no need to change. It reminds me of the Machine-Gun Salesman story where a salesman is trying to sell automatic rifles to a General who is busy fighting a battle with revolvers. The General is obviously under a lot of stress and very busy causing his only response to the salesman to be “Can’t you see I’m busy?!” This is a very basic example but it describes a reality seen every-day by technology companies trying to educate the market.
To do list
We have to start thinking about how to handle our local challenges instead of using them as an excuse and remaining years behind the leaders in the industry. We need to leverage international technology and best practices through creating awareness of what is currently possible as well as using some of the technology on a small scale. Many people are afraid of the resulting learning curve, but without educating ourselves we will not be able to improve our competitive position globally.
The awareness is not only in terms of new technology and digitalization. I have dealt with many companies who did not know what Industrial Engineers do. Some of them even questioned whether an IE will be needed at all in a production environment. With Industrial Engineering being a relatively new Engineering discipline, many people do not understand the value we can add so some more market education is needed as well.
There is a lot we can achieve as Industrial Engineers and I truly believe that if we embrace all these new technologies, and the changes as well as challenges they bring, we can have a major impact on a local as well as global scale.
 Nanterme, P. (2016, Jan 17). Digital disruption has only begun. Retrieved from World Economic Forum: https://www.weforum.org/agenda/2016/01/digital-disruption-has-only-just-...