Understanding the Difference between Digitization, Digitalization, and Digital Transformation.

Find out the difference between the 3Ds — Digitization, Digitalization, and Digital Transformation — the terms, being closely associated, are often confused. How essential are they for the future of manufacturing optimization? Digitization converts information available in the old analog form by scanning and encoding to store, process, and transmit in a computer-readable format.  

91% of industry leaders have increased digital transformation investments in the past year,says the newly released 2021 State of Manufacturing Report.

Rising out of the phase of uncertainty brought by the global pandemic-driven shutdowns, the global manufacturing industry is now putting its back into regaining stability. Implementation of Industry 4.0 technologies is not an option for manufacturing companies but imperative to strategize the full recovery of business and achieve greener processes with more agility. The Fourth Industrial Revolution (4IR) leverages the 3 Ds of technology- Digitization, Digitalization, and Digital Transformation. 

Although the word ‘digital’ has been around for a few decades now, constantly advancing technology has changed its meaning dramatically over time. Also, the difference between digitization and digitalization is not clearly understood by many. And how these two terms are essential for digital transformation.

Digitization converts information available in the old analog form by scanning and encoding to store, process, and transmit in a computer-readable format. Essentially, digitization is the acquiring of data in the form of binary numbers to be processed by digital computers. 

In the manufacturing context, digitization of a product involves recreating an image of the physical product with the help of software tools, e.g., a clay model of an object gets designed in 3D CAD file format. The production process also gets digitized by creating a digital twin that mirrors every step in the process, end-to-end. With the help of AI applications, the entire manufacturing process- from product design and workflow of the production line to the finished product gets coded into the machines connected by the Internet of Things. Digitization replaces the paper-based processes even at the shop floor, where physical product design is no longer handed out but transmitted to a device. Thus, digitization is the foundation of digitalization — the latter cannot occur without the former.

The two terms, being closely associated, are often confused. But, scholars emphasize the analytical value in understanding the distinct difference between digitization and digitalization.

Digitalization is less about the specific process of going from analog to digital and more about a strategic and radical change in business operations. Gartner defines digitalization as the use of digital technologies to change a business model and provide new revenue and value-producing opportunities; it is the process of moving to a digital business. Accepting the overwhelming process of digitizing your traditional manufacturing processes and embracing automation and the Industrial Internet of Things is just one aspect. Digitalization also involves the workforce of your organization. In the wake of automation factory- workers and other employees need to shift from manual processes and adapt by acquiring digital skills relevant to their field of work. 

And thus, we arrive at understanding what digital transformation means. The strategic and considered move of upgrading the old factories to optimize your manufacturing processes by adopting technologies like Artificial Intelligence, Big Data Analytics, Machine Learning, Robotics, etc., is radical business transformation through digitalization. And equally vital to the transformation are the people working in the organization. But, digital transformation initiatives cannot stop at the implementation of digital technologies only. It goes beyond digitalization. For how can we forget that business is people, after all?

Digital transformation (Dx) is primarily a change in mindset that shifts the focus of organizational activities toward satisfying customer expectations, understanding pain points, and solving customer problems. Customer and employee experience is a crucial driver for successful digital transformation, as identified by the MIT Sloan Center for Information Systems Research. And the other driving factor is the operational efficiency of the organization. Embracing digital transformation means being willing to adopt artificial intelligence (AI) and automation to augment and free up workers for performing higher-value tasks. Harnessing technology for enhancing customer experiences while also aiming for a real-time lean manufacturing ecosystem will give massive business benefits —including cost efficiency, improved innovation potential, and the quintessential customer relationship. 

The unexpected advent of the COVID-19 pandemic made health and safety a major priority, which saw the whole world scrambling to cope with the new normal of remote working. And as a consequence, most enterprises converted into digitally functioning businesses for the sake of survival. There was an unprecedented change in human interaction, customer behavior, and people’s attitude toward exploring digital possibilities. There was a drastic paradigm shift, and it has come to stay.

Almost all business sectors have undergone slow but escalating digitalization. And we can surely expect that in the post-pandemic era, digital transformation — accelerated and deliberate — will become inevitable for all areas of manufacturing. If you wish to thrive (not just survive) in the next normal, your manufacturing industry has to turn agile and SMART. 

Aerospace

Aerospace Manufacturing

Agile

AI

AI

AI for business

AI for business growth

AI for good

AI for manufacturing

AI in manufacturing process

AIML

Algorithms

Angel Investors

apis

Aviation Industry

Big Data Analytics

Blue Collar Workers

Business Analytics

Business Intelligence

Business Intelligence Tools

Case Study

Change Management

Chemical

Cigarette Manufacturing

CO2 Reduction

Company culture

Company Culture Matters

Company Values

Connectivity

Conversations at Neewee

Corporate Life

Corporate Life

Customer Experience

Data

Data Acquisition

Data analytics

Data Communication

Data Driven

Data experts

Data Science

Data Visualization

de-risking business model

De-risking strategy

Decarbonization

Digital

Digital Business Transformation

Digital Revolution

Digital Transformation

Digital Transformation

Digital Twin

Digitalization

Digitization

Discrete Manufacturing

DX

Edge ai

Edge Computing

Empathy

Empathy at work

Employee Management

Employee Satisfaction

Energy Efficiency

Failure is part of success

Flexible Manufacturing

Food and beverage industry

food manufacturers

food quality

foodmanufacturing

Forrester Report

Funding Funnel

Future

Future Ready

Future technology predictions

General

Gold Rush

Graph Data Science

Growth

Growth Mindset

Idea Meritocracy

iiot

Improve Efficienty

Impurities

Industry 4 point 0

Innovation

intelligence

IoT

ir4

IR4 technologies

Japanese Market

Latency

Learning

Legacy Systems

lstm

Machine Learning

Manufacturing

Manufacturing AI

Manufacturing Automation

Manufacturing Goals

Manufacturing Industry

manufacturing performance

Manufacturing Process

Manufacturing Solutions

Manufacturing Technology

Maximize Productivity

Mistakes are lessons

ml

Myth Busting

Myths and Facts

Neewee ai

Net Zero

Net Zero Carbon

Net Zero Emissions

Net Zero Future

Net zero future

Net Zero Manufacturing

Net Zero Steel

Net zero transition

netzerocarbon

netzeroemissions

Operational Excellence

Operators

Optimization

Packaging Safety

Partnerships

Performance

performance monitor software

performance monitor tool

Personalization

Pharma Industry

Pharmaceutical

Predictive Analytics

Predictive Modeling

Predictive Quality

Prescriptive Analytics

Problem Solving

Process Control

Process Efficiency

Process Improvement

Process Mapping

Process Optimization

Product Quality

Production

Production Efficiency

production performance monitoring

Production performance,

Production Planner

Production Planning

Productivity

Quality Assurance

Quality Check

Quality Control

Radical Transparency

Reinforcement learning

Resilience

Reskilling

ROI

Scheduling

Shark Tank

Shop Floor

Simulation

sins

Smart Factories

Smart Factory

Smart Manufacturing

Strategy Implementation

Talent

Tech predictions

Test

Transparency Matters

Upskilling

Use Case

User Story

Value in Action

Venture Capitalists

what is production performance

WIP Reduction

Workforce Development

workforcedevelopment

Zero Defect Manufacturing

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