Scaling Digital Production Systems for a Faster Green Energy Transition

As the world grapples with the urgent need to address climate change and transition towards sustainable practices, the manufacturing industry plays a pivotal role in enabling this transformative process. To effectively contribute to the green-energy transition and ensure long-term sustainability, manufacturers must prioritize the scalability and flexibility of their operations. Today, a key building block in that scaling tactic is a digital production system. This document emphasizes the importance of scalable cloud-based architecture, user-friendly applications, adaptable business models, and value-driven roll-out plans to enable manufacturers to scale their production capacity and meet the demands of the green-energy transition.

I. The Green-Energy Transition and Sustainable Manufacturing

The green-energy transition requires manufacturing industries to develop and produce sustainable products that reduce greenhouse gas emissions and promote environmental stewardship. Scalability is a critical factor in this process, enabling manufacturers to efficiently increase production capacity to meet growing market demands. By embracing scalable digital production systems, manufacturers can effectively contribute to sustainability goals while ensuring the flexibility and agility required to adapt to evolving market needs.

In Sweden, the impact venture builder, Vargas Holding, is taking a globally leading position in this field by identifying, validating, financing and launching impact companies on a truly ambitious scale. In all of its ventures, including Polarium, Northvolt, H2 Green Steel and now Aira, Vargas is leveraging technologies such as digitization and automation to achieve more, faster and more resources efficiently.

Erik Seuranen, Head of End-to-End Process Performance at Aira, one of Vargas Holdings green-tech ventures, says, “When you are building an industrial venture of this scale with the timeframe that we are looking at, having systems that are both scalable and easy to adapt and change with a few clicks is key. The traditional approach simply cannot keep up with the pace and speed of iteration that we are keeping. Moreover, catering to both manual and highly automated processes, integrating logistics as well as supporting our operational excellence work with the right data is a fundamental requirement of our business”.

II. Scalable Cloud-Based Architecture: Enabling Sustainable Scalability

To achieve scalability in manufacturing, adopting a scalable cloud-based architecture is paramount. Notably, it is also no longer contradictory to having secure operations both from a cyber-security or a business continuity perspective, with the advent of accessible hybrid-cloud applications. Traditional on-premises infrastructure often limits scalability, inhibiting manufacturers from rapidly expanding production capacity, scaling best-practices or amortizing investments over a broader installed base. In contrast, scalable cloud (or hybrid cloud)-based solutions provides the necessary agility, flexibility, and cost-effectiveness to support sustainable scaling.

“It has been critical for us to leverage a scalable and replicable technology that allows us to ensure aspects such as compliance and quality control without imposing limitations on our pace of scaling. We are one of Europe’s fastest growing companies and need technologies that can match our pace – and allow the flexibility we need to launch new products and onboard new colleagues and customers”, says Stefan Jansson, CEO and founder of Polarium.

By leveraging scalable cloud-based architecture, manufacturers can seamlessly scale their production systems to accommodate increased demand for sustainable products. This flexibility not only minimizes resource waste but also enables rapid adaptation to market trends and emerging technologies. By harnessing the power of scalable cloud infrastructure, manufacturers can align their production capacity with the urgency and scale of the green-energy transition.

Indranil Sircar, CTO for Manufacturing & Mobility at Microsoft says, ”We are seeing a tectonic shift in the applications of new technologies across manufacturing. Scalable technologies such as cloud infrastructure are starting to become more commonplace in manufacturing and this is driving the adoption of everything from AI to automation. What is also different now is the openness of the emerging digital production systems, which allow users to mesh data from across both operating technology and any relevant adjacent IT system. This data can then be surfaced to the right person, at the right time and in the right context to create much more value, much faster. Perhaps counter-intuitively, the next generation manufacturing software also tends to place much more emphasis on the human being.”

III. User-Friendly Applications: Fostering Adaptability and Adoption

To scale production capacity effectively, manufacturers must provide user-friendly applications that empower their workforce to adopt and adapt to new digital tools. Traditional software development cycles often involve complex coding processes, hindering rapid scaling and innovation. User-friendly applications, on the other hand, enable employees across different roles to actively participate in developing and refining digital solutions without extensive coding knowledge.

By implementing scalable applications that are easy to adopt and adapt, manufacturers create a collaborative environment that supports continuous improvement. These applications allow for rapid prototyping, iteration, and customization, fostering adaptability to changing market needs and enhancing the scalability of production systems. With user-friendly tools, manufacturers can unlock the full potential of their workforce, enabling them to contribute to sustainable scaling efforts.

Per Werin, COO at Cake says “Starting from scratch, building a few hundred electric motorcycles a year was testing. Going to thousands, with manufacturing locations on opposite sides of the planet, would have been impossible without the support of a scalable digital production system that helps us scale and replicate our processes, and making sure that we stay compliant with the various standards imposed by the automotive industry. Moreover, it has helped us onboard staff much more quickly – which for us has been key to scaling our operations globally with high maintained quality standards”.

IV. Adaptable Business Models

Scaling a digital production system, however, requires more than just scalable technology and an easy-to-use and efficient application. Vendors of digital production systems must also develop adaptable business models that remove barriers to scaling, iterating, and replicating successful processes.

A scalable business model focuses on eliminating hurdles to buy (such as complex and/or opaque pricing structures, coplex customer engagement models and long quotation times, cumbersome deployment models etc) and allows users to focus on eliminating inefficiencies, optimizing workflows, and streamlining operations, ensuring sustainable scalability.

Ward Lawrence, Manufacturing Partner Strategy Lead at Microsoft says “When we see partners that are able to break the cost-value curve through the adoption of scalable technology platforms and couple them with scalable, transparent business models we get excited. The really big impact for business comes when software platforms are built such that they can quickly and easily be adopted by the broader market. In manufacturing, that has not happened as quickly as in other places – but now it is happening. When we are talking about scaling green energy technologies, that is of course of particular importance for us all”

V. Value-Driven Roll-Out Plans

Last but not least, in order to scale any industrial operation a value-driven roll-out plan is crucial for successful scaling efforts. This is true for all aspects of the operations – but is often overlooked when it comes to software such as a digital production system. This is equally true regardless of the product that is being built – but particularly important for fast-growing manufacturers since the scaling needs to happen in several dimensions at once, requiring a very high degree of flexibility and adaptability.

The key to a value-driven rollout plan is to deploy the same tactics manufacturers have always deployed to prioritize investments: pareto-out the costs/benefit analysis into a grid with “Impact: High/low” and “Cost/effort: High/low”. Then start with the lower hanging fruit and scale that. This typically results in a lean-compliant 80/20 type of approach that creates significant value with an efficient budget.

Oscar Wallner, Chief Commercial Officer at MTEK, says “many focus only on the back-end scalability of systems. For us, that was not enough. We also needed to provide a scalable application, in a no-code interface that allows broad adoption and quick adaption, a scalable business model that removes hurdles to engagement and then work with the customer to help them identify the way to implement the solutions with best return on investment for them. That can only be done if you have the flexibility to mirror the customers’ production systems in a high-fidelity, easy-to-use, digital replica that helps identify areas of improvement”.

This approach also helps manufacturers value creation over technical buzzwords, focusing on tangible benefits and aligning their production systems with market demand and available resources from time to time. By strategically rolling out scalable digital tools and solutions, manufacturers can avoid getting lost in the complexity of technology and instead deliver meaningful value in their sustainability initiatives.

We don’t have time to not look around the corner

Scaling digital production systems is essential for manufacturers seeking to contribute to the green-energy transition and ensure long-term sustainability. The world does not have time to wait one more year and it can’t afford to add hundreds of millions of dollars in project implementation costs simply because manufacturers choose to deploy legacy technology (or resort to pen and paper, which is probably the more likely option).

By prioritizing scalable cloud-based architecture, user-friendly applications, adaptable business models, and value-driven roll-out plans, manufacturers can enhance their production capacity and effectively meet the demands of the green-energy market – and the need of our planet.

With sustainable scalability at the forefront, manufacturers can drive innovation, reduce environmental impact, and scale their operations with more flexibility, higher quality, lower cost and less stress.

Mattias Andersson, CEO and founder of MTEK Industry AB says “We always wanted to create a product that provides customers the tools they need to change at their pace of innovation, to create and sustain a competitive edge in the marketplace. Manufacturing is not – and should never be – static. Recognizing this, and recognizing the constraints on time and budget in most organization forced us to think differently. Building solutions that allows you to adapt with the click of a button allows customers to not worry about the system, but rather focus on what they should be doing: Play a vital role in shaping a sustainable future for our planet”.