Lessons from a digital society to develop a digital industry

Industry, factory

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As we stand on the doorstep of the fourth industrial revolution, it is clear that the future of the manufacturing industry is firmly tied to new digital solutions and enablers such as IoT, cloud, 5G, AI, and machine learning. In other words – immovable factories will be a remnant of the past.

All aspects of manufacturing will become more mobile, digitised, and interconnected, particularly evident in the lessons learned from the COVID-19 pandemic. While the underlying issue will be ensuring the integrity and trustworthiness of such complex systems, the focus needs to be on the human aspect – something often neglected in industrial development.

Sophisticated, yet robust digital ecosystem

Estonia has succeeded in building one of the world’s most advanced digital societies, providing 99% of public services online, including electronic voting, digital bureaucracy, and the declaration of taxes among many others. e-Estonia has risen to global prominence for its sophisticated, yet robust digital ecosystem, which is regarded as efficient, secure, and transparent. The key to this lies in the country’s unique e-identity, assigned to each resident and allowing them to securely interact with both public and private institutions alike, saving hundreds of years in working time. Many aspects of Estonia’s success in developing a digital society can be replicated in an industrial setting as well.

Where does this efficiency come from?

Most public databases in Estonia are linked to each other in seamless interaction. A single inquiry produces results from dozens of integrated databases, meaning that data only has to be submitted once.

As Urmas Kõlli, CEO of Estonian software solutions provider Datel explains, access to big data and its seamless integration with other relevant information is the key factor for making better decisions to enable higher efficiency in public administration as well as in industrial sectors. As an example, Datel is using the information from the databases combined with big data analysis on space satellite data to monitor and recognise any deviation of the infrastructure objects on Earth. Thus  Datel has created an unprecedented solution that provides a new level of the ground, infrastructure, and real estate survey, risk management, and disaster prevention. “What matters most is the ability to recognise the relevant data, translate it into a comprehensive format to be able to analyse it, trace connections, and identify links. This will become particularly relevant in the coming age of the Internet of Things,” says Kõlli. Datel has successfully transformed traditionally analog and manual services into innovative digital environments, such as the national land information system, the e-police system, and many others.

Truth, not trust 

Already back in 2008, Estonia was the first country to test blockchain-based technology to ensure that networks, systems, and data are free of compromise. While Guardtime’s KSI Blockchain was first developed together with and for the Estonian digital government, it has evolved much more since then and is today used widely across the world by governments and enterprises to safeguard digital processes and data against manipulation, fraud, or even plain human errors.

Silver Kelk, Business Development Manager at Guardtime, says that much like Datel, Guardtime has acted as an enabler of the digital society developed in Estonia. “We have a saying – trust, but verify”. The KSI technology by Guardtime enables to sign billions of data points and process steps every second, creating an immutable and verifiable trail of any digital process. “This still plays a big part also in e-Estonia, reducing insecurity and distrust by making digital services safe, auditable, and controllable”, explains Kelk, stressing Guardtime’s technology’s importance particularly in the age of Cloud, IoT, and distributed workplaces.

The future looks “cloudy”

The complexity of IT-infrastructures and the data volumes are growing exponentially compared to what they were when Estonia was once building up its digital governance systems. Looking ahead, Kelk believes that the future for the public sector and enterprises both look rather “cloudy”. Monitoring of cloud-based systems is an area of particular interest for Guardtime these days. “Based on the same highly scalable technology that guards e-Estonia, we have developed a zero-trust solution for real-time cloud monitoring and compliance attestation”, reveals Kelk. In other words, it’s a solution that detects misconfigurations and non-compliance to defined operational or security rules in real-time, thus avoiding costly data breaches or other vulnerabilities in yet unfamiliar and less trusted environments. “So you can say that just as KSI was once the enabler for trusting our digital government systems, Guardtime’s current solutions build trust and confidence for the cloud adoption in the industry,” says Kelk.

The realities of future workers

The advent of automation and digitalisation has changed the entire essence of work dramatically in recent times, as there are more and more workplaces that don’t require the physical human presence and the possibilities for remote work are improving day by day. The CEO of UX/UI designers MobiLab, Veiko Raime, believes that the worker of the future will be a mobile person, who won’t be bound by a physical workplace or an office cubicle, but instead will always be on the move. And the technology is already there to facilitate it without cutting back on productivity or efficiency. “We make robots talk to humans, it’s as simple as that. We need to help them communicate with each other better.”

The first principle that guides MobiLab on this mission is that mobility is here to stay in every walk of life. The second states that the importance of designing the user experience and the user interface will increase even further. “Design is the new value, not from an aesthetics perspective, but more from a practical approach. The workplace of the future won’t be the factory floor, it could be anywhere these days,” says Raime.

A step closer to Industry 4.0

MobiLab’s core competence lies in developing practical digital solutions that implement remote interaction via mobile applications or text messages. For the past 4 years, MobiLab’s focus has been on new technologies utilising mixed reality and augmented reality (AR) developments. Raime explains that augmented reality will be a step closer to Industry 4.0. “AR can give a new lease of life to many aspects of business interaction that have suffered during 2020 – it’s easier to conduct B2B sales with a mixed reality product presentation now that physical meetings at expos and trade fairs are either cancelled or heavily restricted. Online retail shopping will benefit greatly from consumers being able to see the desired objects virtually fitted to their surroundings. And educating and training will become more productive with virtual reality,” stresses Raime.

Human-centered approach in every aspect

Just as MobiLab aims to place the human at the centre of technological advancements, Estonian software developer Evocon also echo the sentiments of their colleagues. Evocon’s Head of Design and Service Martin Lääts emphasises that the human-centric approach is the unique selling point of Estonian digital solutions providers. Evocon delivers user-friendly software that automates data collection from machines and provides visual real-time information about production performance. “Our mission is simple – to help everyone understand what the actual problems are in the production process without requiring any special training. We want to help people and teams collaborate with each other so that they can discover their true potential, not automate them out of the production process entirely.” Lääts states that the human aspect is often neglected in industrial product development. “Understanding manufacturing data shouldn’t require a degree in IT. With simpler and more intuitive UX/UI solutions it’s possible to share the data with the entire organisation, thus opening the door to improvements and innovation.

Estonian companies are very agile

It’s common for our clients to achieve 50% gains in productivity within just a few months.”Evocon’s experience has shown that the best and the simplest solutions tend to work universally. Rather than focus on one particular industrial sector, Evocon serves 14 different industries in more than 45 countries with a standardised solution. “Every company believes that they are unique and different from others. But there’s always a standardised software and hardware solution available that works universally because the problems they try to solve are often very similar in nature,” adds Lääts. His confidence is backed by the fast-cycle product development that Estonians are naturally accustomed to. “The lack of bureaucracy and quicker decision-making makes Estonian companies very agile, allowing us to develop and test software faster while remedying possible shortcomings and problems in a shorter time span.” Owing to the compact size of Estonia as a marketplace, local entrepreneurs always have to aim for export markets from day one, making it easier to scale their products and services to suit far larger organisations internationally.

Act on data to understand the entire production chain

The shorter lead-time of Estonian manufacturers is also noted by Net Group’s Head of Business Development Anders Abel, who helps companies implementing LEAN manufacturing principles with a production management dashboard to identify possibilities for efficiency gains. “Factory owners’ first priority isn’t buying new expensive production lines or robots, but understanding the entire production chain and improving the existing situation using digital tools and relevant data,” says Abel.

One client of Net Group is an international manufacturing company headquartered in Estonia, who had to rely on out-of-date production information that usually suffered a delay of up to two weeks. The reporting processes relied on paper forms and manual data entry to an ERP system which was prone to delays and human errors.  “Their reaction time to new orders was slow and there was no central planning. We analysed their entire production chain, mapped all the steps, and suggested ways to optimise the process. As a result, the customer also made changes to their production floor layout, payroll principles, etc. to further increase effectiveness”. Workstations were equipped with tablets issuing electronic work tickets with the exact work order to fulfil. This gave the floor manager a complete overview of the stage the work process was in, the stock situation of the warehouse, an overview of stoppages and scrap.

Not reducing workforce, instead encouraging them to work smarter

Whereas before the factory’s management had to look in a rear-view mirror to read data, sometimes up to 3 days later, then new real-time tracking solutions improved reaction time by well over 30%, based on an average production cycle of 10 days. Faster and more accurate data allows management to identify patterns and plan future production and developments accordingly. “The idea is not to reduce the workforce by numbers but to encourage them to work smarter and more efficiently. You have to act on data because otherwise, you won’t be able to solve problems on the fly,” points out Abel.

Adopting new technologies is the key to survival

Manufacturers need technology to have an overview of the entire production process in real-time, giving them the opportunity to manage production in real-time as well. With fewer delays in production and less material going to scrap, manufacturers can gain a significant advantage in lead times and become more flexible partners to their contractors. “We know that companies who manage data are more successful and can deliver more value. If you can plan ahead, then your chances of survival in these challenging times are greater, as you can scale your production capacity significantly without making substantial investments,” states Anders Abel from Net Group.

Never overselling

Estonia seems to have the upper hand in providing digital solutions to the rest of the world. Evocon’s Martin Lääts believes that this may be attributed to the country’s focus on IT and the government’s support for the digitalisation of industry. “Estonian manufacturers are much more receptive to innovation, which makes it easier to test our products in real life with real companies, solving actual problems. We are quicker to react and trustworthy.” Net Group’s Anders Abel agrees: “Estonians have a unique edge in this new era where even large manufacturers may face problems with fulfilling large orders – we never oversell, but always deliver what we promise. Using data in a smart way gives us this advantage, and the confidence to promote it,” he adds.

Industrial sector adjusting to the new normality

In these challenging and uncertain times, the industrial sector will also have to adjust to the new normality and the obstacles it presents. “Digital solutions will inevitably transform the way we view production management and move us closer to the coveted world of Industry 4.0,” explains Estonian ICT Cluster Manager Doris Põld who is also leading the industry 4.0 subcluster. But according to Põld, it’s still uncharted territory, with many service providers attempting to develop tools that actually work. “There are abundant success stories of how global industry leaders have harnessed new technologies to cope with growing demands, but also to deal with gaining efficiency at times of uncertainty. The new era of the digital industry will grant the early adopters a considerable competitive edge through cost-saving and faster lead times, but there certainly are risks and challenges ahead,” Põld says and adds. “Learning how Estonia has implemented its digital society principles can be a valuable lesson for the industrial sector as well. In Estonia ICT cluster we are firm believers of digitalisation, we have gathered the best practices and competencies from digital society and we strongly believe that our innovative approaches can be a valuable lesson for the industrial sector as well.”

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