Last year’s observed significant acceleration in the digitization of the industry in Poland was a positive indicator. However, the economic reality has modified many manufacturers’ plans, requiring them to postpone subsequent stages of transformation. According to Siemens Poland’s Digi Index 2023 report, companies in the automotive sector are performing best in the area of digital transformation among the surveyed sectors. Still, they are aware of challenges and commit to further investments to enhance digital operations.
This year marks the fourth edition of the study on the digitization level of medium-sized manufacturing companies in sectors such as Food&Beverage, Chemistry&Pharmacy, Automotive, and Machinery. For the first time, the study also compared large companies. The index, ranging from 0-4, serves as a gauge of the technological awareness of decision-makers and managers of Polish firms. The current year’s Digi Index result for medium-sized firms stands at 1.8, significantly lower than in 2022, with the automotive sector scoring 2.0. Large manufacturing companies employing over 250 workers were included in the Digi Index study this year, reaching a general index of 2.7 and 2.9 for the automotive sector.
For four years, Siemens has been analyzing the digitization level of medium-sized Polish firms operating in main manufacturing sectors. The result of this analysis is the Digi Index, which scales from 0 to 4. A higher value indicates a greater digital maturity of manufacturing firms, embodying the vision of Industry 4.0 and, consequently, better chances of business success in an increasingly competitive market.
Slowing Down of Medium-sized Firms
The Digi Index result for medium-sized firms this year is noticeably lower than in 2022. Many manufacturers still grapple with challenges in various digital transformation areas. The automotive sector leads (2.0), followed by machinery and the chemical and pharmaceutical sectors (both at 1.8). The food sector lags behind with a score of 1.6, just beginning to lay the groundwork for digitized production.
However, the drop in the Digi Index shouldn’t be interpreted as failure or signs of a transformational stagnation in Poland’s manufacturing industry. Digital transformation is a long-term and multi-phase process. While some stages progress quickly and easily, others are more demanding and time-consuming. Successful digital transformation demands a holistic approach, involving all company departments and spreading the entire process over years, explained Łukasz Otta, the director for digital transformation at Siemens Poland.
Digitization of the Automotive Industry is on Track
The Digi Index value for medium-sized automotive companies is 2.0. Though higher than the average (1.8), this sector urgently requires improvements towards digital transformation. A third of the representatives estimate their company’s digitization level at 41-60%, while about a quarter (23.3%) rate it at 61-80%, and just under 7% rank it above 80%. This suggests a widespread awareness of the need for more digitization efforts, reflected in their budgets. Most medium-sized automotive firms plan to increase their digitization budgets in the next 12 months, currently allocating about 12% of their profits.
Large Companies Lead in Digitization
Large manufacturing firms employing over 250 workers were included in the Digi Index study this year. Their overall score is 2.7, indicating that the majority utilize digitization in their daily operational activities, deriving tangible benefits. Large companies’ impressive performance can be attributed to their significantly higher budgets than SMEs and leveraging international experiences.
Main Barriers to Digitization
The primary barrier for medium-sized manufacturing firms remains insufficient budgets (32% of responses). A lack of knowledge about using collected data (31%) also poses a significant challenge. In contrast, for large firms, the inability to integrate different suppliers’ information systems (37%) is the most significant obstacle.
Areas Needing Support
The Digi Index examines six digitization areas, each having its index value. Despite challenges, data management has the highest Digi Index value of 3.0. Conversely, organization and administration lag behind with a score of just 1.0. When discussing the automotive sector’s digital efforts, they excel in data management (3.0 for medium and 3.7 for large firms). However, improvements are needed in administration and organization.
In conclusion, company size positively impacts the extent of digital enhancements, likely due to larger budgets and global trend awareness.
