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Leveraging Data for Decision-Making in Industry 4.0

Technology

May 22, 2023 - 4 minute read

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Susanne Hohenstein-Kluka Content Marketing Specialist

Susanne takes care of the German content at Objectivity, translates company content such as web texts, articles and eBooks and writes articles about technology trends and practical business advice. In her private life, she likes to spend her free time outdoors with her son, playing tennis or going to rock concerts.

 

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2988 HC Digital Transformation 476X381

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Unnecessary bureaucracy, high taxes, expensive energy: The situation of the German industry is extremely difficult,” complained the President of the Federation of German Industries (BDI), Siegfried Russwurm, at the beginning of March at the 2023 Handwerksmesse in Munich. At the same time, companies are struggling with disrupted supply chains, rising costs for raw materials, and growing requirements for sustainability in their production processes. Manufacturing organisations are also pressured to accommodate the increasing demand for small batch sizes. 

Therefore, the German industry must move out of the crisis mode and develop a long-term strategy to remain globally competitive, demanded Russwurm. Both these goals can only be achieved if companies truly embrace Industry 4.0 and confront the structural change that digitisation has triggered in manufacturing worldwide. 

Data Is the Key to Business Success in Industry 4.0 

In Industry 4.0, data generated and stored in all company’s systems is the key to intelligent and connected creation of business value. When companies make this digital information available to their employees and exchange selected data with suppliers and business partners, they become more flexible and productive. They can better classify trends, and more accurately predict future developments. This gives them a competitive advantage because they can quickly adapt products and services to customer and market needs. This way, data becomes the engine of economic development and the basis for innovation and competitiveness. Above all, it’s the basis for making smart and informed decisions. 

When companies use data efficiently, they will be able to tap into the following five benefits: 

1. Data and digital platforms offer valuable insights into customers and products, allowing companies to develop offers that are tailored to the specific needs of their customer. 

2. Using data, organisations can optimise their production and delivery processes, as well as forecast future demand, delivery times, and throughput. Process data is generated during production, and analysing this data can lead to new insights. 

3. Companies can personalise their marketing efforts, place targeted ads, and make individualise recommendations to customers to increase the return on their marketing spend. 

4. With transaction- and user data, companies can develop new products and business models. 

5. And streamline their internal processes, management, and administration. 

Reduced Data Complexity Supports Employees 

To leverage these benefits, companies must interconnect their systems. Only with the ability to collect, send, and receive data at any time and from anywhere, stakeholders will have access to the information they need to do their work effectively. This is crucial for making truly data-driven decisions. 

Companies must also be able to properly analyse and leverage data. They need simple access to information, transparency, and reduced data complexity. For agile decision making, companies should make their data understandable and accessible to all relevant stakeholders. 

Visualising data can be helpful in achieving this goal. For example, in predictive maintenance, there are multiple values and data patterns measured by the sensors, such as operating temperature, vibrations, pressure, and deflection. Displaying them on dashboards can help identify causes of errors or malfunctions quicker and easier than digging through tremendous spreadsheets. The maintenance of facilities and heavy equipment can greatly benefit from this practice. 

Visualisation can also facilitate making data-driven decisions in the areas like process analysis, quality control and documentation, or energy management. 

Many Companies Have Some Catching Up to Do When It Comes to Digitisation

In summary, many companies still aren’t at the level of digitisation that would allow them to optimise processes and decision-making, while supporting the development of new business models. The necessary data is available, but some organisations aren’t aware of the opportunities or don’t see them as profitable. According to the data portal Statista, only 65% of manufacturing companies use specific applications for Industry 4.0. Additionally, a study conducted jointly by the BDI and the Institut der Deutschen Wirtschaft (Institute of the German Economy) certifies that only 28% of the surveyed companies reached a high level of digitisation in their data management. This shows that there’s still plenty of room for improvement and many organisations can still immensely benefit from investing in their data infrastructure. 

A Strong Data Strategy is Needed to Succeed

Companies need to establish a data culture and strategy to leverage digital tools and become a data-driven enterprise. This requires proper data management and good practices, as well as employees who can fluently understand data as the language of business success in the digital world. According to Forrester, organisations often set themselves up for failure by overestimating these capabilities within their teams. It’s essential to combine the knowledge of data scientists and engineers with the business expertise of departments such as operations, logistics, development, marketing, or sales. In the coming years, embedding new data-related skills and capabilities into these teams will be critical factors for success. 

A data strategy and culture should be developed and tailored to each company’s needs and strengths. It should be a living and evolving part of the organisations that is regularly reviewed and adjusted to meet current challenges. Utilising data-driven insights strategically can bring systematic and continuous value, which gives companies the competitive advantage they need to overcome today’s challenges such as disrupted supply chains, high energy costs, taxes, and customer demands. 

2988 HC Digital Transformation 476X381
Susanne Hohenstein-Kluka Content Marketing Specialist

Susanne takes care of the German content at Objectivity, translates company content such as web texts, articles and eBooks and writes articles about technology trends and practical business advice. In her private life, she likes to spend her free time outdoors with her son, playing tennis or going to rock concerts.

 

See all Susanne's posts

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