The quiet world of Digital: how Digital is changing the traditional sector

Today, the word digital instantly brings to our mind the image of cool companies, cool products, platforms and services which create innovative consumer products – all managed through mobile devices. While this is definitely true and has raised the profile of digital, there is a different world hidden in plain sight that is being digitally transformed without the spotlight! Digital is also creating opportunities in companies from the mature industries – opportunities and benefits which were unthinkable even a few years ago.

It is the quiet world of digital for these companies. They do not create much fanfare and are not often covered in the media. The average consumer does not interact with them in daily life and hence, has very little awareness of how digital is impacting industries such as farming, mining, railroad freight, industrial machinery, energy production, etc. Digital has made massive inroads into these traditional industries: impacting companies’ core business processes, redefining market access and product launches, creating revenue and profit impact, retooling customer services, and rekindling engagements with employees, customers and partners.

Agricultural farming has embraced digital and associated technologies well. This industry is in a perfect storm: a growing global population year after year and fewer people working on the farms each year. How can enough food be produced to feed everyone? There lies the massive opportunities in farming – to significantly increase high quality yield through digital. Digital and IoT enabled precision farm equipment help assess soil quality at extremely small intervals, use weather data and sow seeds accordingly through GPS-controlled machines to maximize yield.

According to a report from The Economist, Monsanto, one of the largest Agrochemical companies in the world, has made major strides in leveraging digital technologies to improve farm yield. It acquired Climate Corporation (a weather and soil assessing company) in 2010, and then acquired Precision Planting in 2012 (manufacturer of seed drills that are pulled behind farn tractors.) Its FieldScripts platform integrate the soil and weather data into the seed drills to ensure each seed is planted for the best possible yield success.

Mining is another mature industry which is adopting digital technologies to drive improved safety, higher efficiencies and better throughput. Proximity meters, speed controllers, lane departure warning systems, etc. which feature in high-end automobiles today, are quickly finding inroads into the mining industry.

A report by Siemens highlighted that most mining equipment are currently being used sub-optimally. Since most mining machines are very heavy (e.g. an excavator weighs over 1,600 tons), machine operators err on the safer side. However, a little less capacity and a little less extraction each time slows productivity and operations become costlier. Today, digital mining companies are deploying sensors in their equipment to enable the driver to push towards full capacity, safely. As the sensors become more ubiquitous, efficient and connected, automated mining machines will become more mainstream, driving costs down while eliminating risks to human life. Codelco, the world’s largest copper producer, has become the first mining company to join the Industrial Internet Consortium and is clearly leveraging the digital and IoT technologies to redefine the future of the mining industry.

Freight rail is among the most mature and established economies in the US, having been a part of the fabric for over 180 years. Freight rail transports approximately 40% of all freight in the US by ton miles, delivering everything from consumer goods, cars, agricultural produce, oil, coal, industrial goods, commodities, chemicals, etc.

The freight rail industry has perhaps the most imperative need to improve safety monitoring and asset management, since an upsurge in freight accidents, derailments, etc. Digital, communication and IoT technologies are being leveraged to implement and modernize freight rail. Union Pacific now deploys infrared sensors every 20 miles on its track to measure heat, and microphones to listen for growling bearings in the wheels. Data is sent via fiber-optic cables and intricate pattern-matching algorithms flag the outliers. These measures have helped them cut bearing-related derailments by 75%. With advanced digital, communication and IoT technologies, the freight rail industry is clearly moving towards more real time and predictive data analytics driven thinking and processes.

Applicability of digital in these industries is driven more by business and operations effectiveness rather than just the front end digital apps. Several other mature industries such as industrial machinery, energy production and management, etc. have brought digital to the center of their next gen thinking. Digitalization should also act as a catalyst for all these industries to rethink their business and technology processes that can help them to create new products/markets, improve operating efficiencies, compete with digital natives and traditional enterprises, and stay relevant to the ecosystem of all stakeholders.