Caution: Work in progress!
Digitalization in the process industry is no simple matter. Work is underway, but it’s fragmented and tentative – rather like a building site where all the materials are on hand, but the plans are missing. Time for a closer look.
Text: Armin Scheuermann
Illustration: DAQ
At the height of the Covid-19 pandemic, the world required solutions – and fast. New medicines needed developing to prevent severe cases of the disease. But how? At the time, getting a new drug from concept to approval typically took between 12 and 15 years. For pharmaceutical company Pfizer, the answer was to harness digital tools that would accelerate this process. It used supercomputers to help search for suitable molecules and leveraged artificial intelligence (AI) to analyze vast amounts of patient data for clinical studies and to optimize supply chains. As a result, it took just 18 months to get from the first lab-scale synthesis of the main active ingredient to mass production of Paxlovid, an antiviral medication for Covid-19.
Since then, digitalization has become indispensable in the life sciences. In research and development, an area that for decades has relied on high-quality data, digitalization is a game changer, accelerating innovation and driving down costs. Other sectors of the process industry are seeking similar successes – and investing heavily to achieve them. According to market research firm Research and Markets, chemical companies worldwide ploughed more than 18 billion dollars into their digitalization projects in 2024. By 2030, that figure could be as high as 60 billion dollars. Just as in the life sciences sector, these companies face an increasingly challenging market environment. They need faster product development, more resilient supply chains and new digital business models. And to power those models, they are looking to B2B platforms to access new customer groups, increase customer retention and, ultimately, boost sales. All enticing prospects, for which these companies are willing to dig deep into their pockets.
Stalled in the pilot phase
But where ‘only’ the classic Industry 4.0 digitalization aims are concerned, investment tends to be more restrained. That is the situation, for example, when it comes to reducing manufacturing defects, avoiding downtime and lowering operating costs through automated workflows, digital process control and predictive maintenance. Rockwell Automation, a major player in its sector, surveyed 1,500 manufacturing leaders from around the world. The results, published in the company’s ‘State of Smart Manufacturing Report,’ show that the process industry is still a long way from comprehensive digitalization of its plants. According to the report, in 2025 – more than 10 years since the Fourth Industrial Revolution was proclaimed – only 20 percent of companies are investing at scale in Industry 4.0 technologies. So, when it comes to digitalization, the process industry resembles a large construction site where progress is decidedly sluggish. Time, then, to peek behind the hoardings and find some answers to the most pressing questions: Why is process plant digitalization not more widespread? Why are the pillars of transformation so shaky? And might this dream palace of digitalization turn out to be just that – a dream?
Because the fact is, many businesses in the process industry have long been languishing in ‘pilot purgatory’: They launch a lot of stand-alone projects to test the digital technologies currently around such as IIoT, cloud solutions or digital twinning. Yet these pilot projects often stay siloed and unconducive to scaling or adaptation for broader applications. The World Economic Forum identified this phenomenon as long ago as 2018 – and to date, little has changed. In the Rockwell Automation study, 56 percent of the companies surveyed indicated that they were currently running pilot projects. A further 20 percent were yet to do anything, although they did have investments in the pipeline.
Key facts
56%
of companies in the process industry are currently running Industry 4.0 pilot projects.
Key facts
20%
of companies in the process industry are using Industry 4.0 technologies at scale.
Key facts
95%
of companies in the process industry are already investing in AI or are planning to do so.
A lack of will
Companies tend to struggle with broad-based digital transformation. The reasons why are clear to consultant Dr Wilhelm Otten: “Besides technology barriers, it’s primarily due to companies thinking too much along narrow functional channels, and about how they manage their change processes. It’s not just a lack of skills and resources but also a lack of will – and sometimes simply a case of not being empowered within the company hierarchy,” says Otten, who is head of the Interdisciplinary Committee on Digital Transformation at VDI, the Association of German Engineers.
Lending credence to this assessment is a joint study conducted in 2024 by management and technology consultancy BearingPoint and Munich University of Applied Sciences. It demonstrates a strong correlation between executive-level engagement with digitalization and the extent to which Industry 4.0 is implemented in production. The study deems close strategic-level underpinning of Industry 4.0 and interconnected digital value-chain processes as being critical to success in this regard. It also emphasizes the importance of a correct organizational approach and employee buy-in. Implementing digitalization successfully is predicated on aligned technology, people and organizational structures.
The central question
In present practice, most companies focus almost exclusively on the technological aspect. Worse still is the frequent tendency to mold digitalization initiatives as technology or IT projects that focus on improved functions for their own sake, rather than on the actual benefits they deliver. For management consulting firm McKinsey & Company, however, the central question is: “What is the value-add for my business?” And it’s a question that often goes unanswered. So, too, does the question of what concrete goals and criteria should be used as success metrics in digital transformation. Germany’s Fraunhofer Institute for Production Technology has come to a similar conclusion. In its view, many companies struggle with assessing the potential for Industry 4.0 to add value to their own production. This, in turn, has a constraining effect on investment. To generate sustainable added value, the Rockwell Automation report recommends that companies identify and prioritize use cases that promise solutions to production and operational problems – and deliver a rapid return on investment.
This highly focused, step-by-step approach to digitalization is seconded by Dr Rolf Birkhofer, managing director of Endress+Hauser Digital Solutions. Proceeding in smaller steps makes sense because the benefits, and hence the technologies deployed, may differ depending on the application. “In smaller plants, for example, operators can save money through remote monitoring of measuring points to avoid the need for costly on-site attendance. In larger plants, we have already demonstrated with great success that managing the installed base of field instruments brings a fast pay-off.” And Rolf Birkhofer further concurs with the Rockwell Automation report: “Successful digitalization is when a solution stays in long-term use and pays for itself within the expected timeframe.”
The big picture matters
One such case of successful digitalization is digital twinning in plant engineering. This allows companies to plan, simulate and optimize their plants virtually. Coca-Cola, for example, uses digital twins to model each phase of the filling line at its high-tech plant in Istanbul. Simulations using the digital twins help to identify and prevent potential bottlenecks, machine breakdowns and efficiency losses, as well as testing possible scenarios. This results in fewer rejects, lower energy consumption and money saved.
But in many companies, digital twins are not used to their full potential because the data they need tends to be fragmented – spread across multiple systems, formats and areas of responsibility. “A digital twin only works when complete life cycle data is available,” says Hans-Joachim Fröhlich, director of technology and portfolio at Endress+Hauser. “At present, this end-to-end continuity is missing – or else the various data doesn’t fit together smoothly.”
And here’s the tricky part: not everyone tasked with collecting and processing data benefits directly from their painstaking work. “The whole organization therefore needs a shared understanding of cross-departmental business processes,” explains Wilhelm Otten. Seamless integration of data – transcending functional silos – is a basic requirement for scaling pilot projects in almost all Industry 4.0 applications. “One reason why digitalization in the process industry is moving so slowly is a continuing shortfall in the required interoperability. It’s not yet possible to exchange data seamlessly, either within or between companies,” says Hans-Joachim Fröhlich.
AI: Hope in two letters
The good news is that the process industry is aware of these challenges – and is tackling them. According to BearingPoint and Munich University of Applied Sciences, 69 percent of companies surveyed are currently focusing internally on vertical integration for sourcing data. Some 58 percent are implementing cloud solutions for this purpose. Meanwhile, companies are working on standardization with partners along the value chain. Hence, for example, the collaboration going on in organizations such as the Industrial Digital Twin Association and the Open Industry 4.0 Alliance. It is a similar story with the development of Ethernet-APL, a new communication infrastructure for the field level that allows speedy transmission of large data volumes, where the process industry has focused on a standardized and interoperable solution.
The coming months may see momentum build in this space, for two main reasons. First, there is a mounting sense of urgency fueled by growing competition, stricter regulatory requirements, strained supply chains, the ever-increasing skills shortage and the heightened need for cybersecurity. Second is the prospect of artificial intelligence as a turbocharger of digitalization. Following success stories from the pharmaceutical industry – Pfizer being a case in point – many companies see AI as a panacea. According to the Rockwell Automation report, 95 percent of process industry companies are either already investing in AI and machine learning or are planning to do so in the next five years. Applications that show particular promise include quality control, cybersecurity and process optimization. AI, it is hoped, will make production better, more reliable, more secure and more efficient – and hence more sustainable.
Unlocking the full potential of AI requires a robust data foundation and seamless data flows. For companies, investments in digitalization are therefore becoming essential – not least as a basis for other technologies to come. For the authors of the ‘State of Smart Manufacturing Report 2025,’ there is no doubt: “The industrial transformation is gaining momentum.”
Published: 11 November 2025
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