Authors: Manuel Kugler (SATW), Daniel Schmid (ZHAW), Lars Sommerhäuser (EMPA), Toni Wäfler (FHNW)
Translated with DeepL
Digitalisation in industry involves digitally mapping physical processes, systems and their states. This is done by using and linking hardware and software components, such as sensors and actuators, communication infrastructures, machine control systems and database systems. In this way, we create a digital model of our physical world and connect both worlds with each other.
In the digital world, the data collected, for example as part of a manufacturing process, is given a context and becomes information that can be analysed and interpreted. This information can be used to make decisions and trigger actions. Thanks to the use of artificial intelligence, i.e. complex algorithms, decisions are increasingly being made not just by humans, but by the digital systems themselves. They are becoming more autonomous and therefore often more powerful. Such digitalisation is changing the role of humans in industrial processes. This can affect very different types of processes and human competences: Operating a crane, where we use our sensorimotor skills; complying with safety regulations, where we make decisions based on rules; or restructuring a company, where there are no clear or known rules yet and we have to use our knowledge and experience to make the right decisions.
The aim of digitalisation in industry is usually to offer new products or services or to increase productivity. But what role do people play in this? How can digital systems be designed to increase productivity and efficiency while maintaining or even increasing employee performance and satisfaction? And how can systems be designed to be robust and resilient? That's what this article is about.
A study by the KOF Swiss Economic Institute at ETH Zurich shows that Swiss companies are only exploiting the potential of digitalisation to a limited extent (Beck, Plekhanov & Wörter 2020). A recent study by Staufen AG comes to similar conclusions. In its investigation into the status of digitalisation, it found that only one in two of the companies surveyed in Germany, Austria and Switzerland is actively driving digitalisation forward (Staufen AG, 2023). According to another study by KOF, many digitalisation projects do not achieve their goals (Bienefeld et al., 2018). According to this study, the project objectives are only partially achieved in over 70% of cases and not achieved at all in just under 20% of cases. More recent international studies (Forth et al., 2023) show the same picture.
The reasons for this are manifold. One is the one-sided focus on technology (Kohnke, 2017). Against this backdrop, the EU calls in a strategy paper for digitalisation to be human-centric and promote resilience (European Commission, 2021). What this means is described below.
Human-centric digitalisation does not aim to imitate or replace people. Rather, it is about synergistically combining people and technology (e.g. Wäfler, 2021). Digital technologies should support and enhance human performance. Whether this is achieved depends largely on how technology is designed and implemented. An unsuitable design has a negative impact on employee performance (cf. e.g. Ulich, 2011). Three conditions must be met for people to contribute their knowledge, experience, skills and commitment (Hackman & Oldham, 1980):
Whether these three requirements are met depends heavily on the design of the work tasks that are assigned to people. The tasks are influenced not only by management, but also by the company organisation, i.e. its structure and internal processes. Accordingly, digitalisation also offers an opportunity to design processes in such a way that these three requirements are met. For example, employees can be given more direct feedback on their work thanks to digitalised processes.
Digitalisation promises to increase the efficiency of companies. However, it should be noted that processes and systems must be set up to be resilient to errors, changes or external influences. Redundancies and the availability of basic data in analogue form must be designed in such a way that basic functions are still guaranteed even in the event of a (partial) failure of the digital information and function chain. The ideal approach is resilience-enhancing digitalisation, i.e. using digital technologies to make processes more resilient and better protected against cyber attacks.
The supply chain problems during the pandemic were not the first to show that modern supply chains are vulnerable. This had already become clear before, for example in 2017 during the cyber attack on the world's largest shipping company at the time, Mærsk: as a result, nobody knew which goods were in which container on which ship or in which harbour. In addition, advancing digitalisation can also have a negative impact on the resilience of critical processes to disruptions or errors (Strauß et al., 2023). Digitalisation increases the networking of systems and processes. As a result of this networking, small problems can have a major impact. At VW, for example, the failure of a network component at its headquarters in September 2023 brought four factories throughout Germany to a standstill. At Toyota in August 2023, an error in the parts ordering system led to a full day of production downtime in Japan.
Networking therefore creates an increased risk of cascading effects, which can lead to entire systems coming to a standstill (Strauß et al., 2023). In contrast, resilience essentially means adaptability. Problems should be able to be remedied where they arise so that they do not spread uncontrollably. Zolli and Healy (2012), among others, provide tips on how organisations and processes should be designed to enable adaptability. It is important to create modular organisational structures, to decouple functions from one another and also to provide diversified resources. Such measures enable an organisation to adapt to disruptions and unforeseen events. A central resource of this adaptability is people (e.g. Wäfler, et al., 2021). Digitalisation must therefore take place in such a way that people can recognise changes in good time and correctly assess situations. On the other hand, they must also have room for manoeuvre on site in order to take the necessary measures. Human-centred digitalisation therefore also promotes resilience.
The aim of digitalisation is to increase productivity and offer new products and services. However, digitalisation is also changing the role of people in industrial processes. Human-centric digitalisation does not aim to imitate or replace people, but to create a synergetic combination of people and technology. Three prerequisites are crucial for this: perceived meaningfulness, perceived responsibility and feedback.
Experiences from supply chain problems and other incidents underline the vulnerability of highly digitalised processes and systems. Digitalisation that promotes resilience increases their resistance to failures, changes or cyberattacks. People can make a significant contribution to this.
The SATW, in particular the "Industry 4.0" expert group, will be happy to help and support you when it comes to digitalising your processes and systems and reconciling people, resilience and digitalisation.
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