Productivity and efficiency gains
The ROI, during an industrial digital transformation, can be in the form of business productivity and process efficiency gains, in addition to new digital revenue. Let's take the example of airline baggage handling.
The airline industry
Prior to the COVID-19 pandemic, Delta Air Lines carried about 180 million passengers annually along with about 120 million checked airline bags. In 2016, Delta decided to invest $50 million to modernize its baggage handling solution and use Radio-Frequency Identification (RFID) enabled baggage tags (see https://news.delta.com/iata-follows-deltas-lead-rfid-bag-tag-mandate). This would improve the efficiency in the system, reducing any adverse impact of mishandling baggage. The intended outcomes of this RFID initiative are as follows:
- Reduced instances of bags left behind, misrouting at a connecting airport, or delayed arrival at the destination
- Reduced instances of theft of bags or pilferage...
