Industry 4.0 is a decade in the making yet is still seemingly out of reach for many manufacturing organizations. Why are so many middle-market companies still failing to take advantage of innovations that are seen by others as entry-level? Before we can answer these questions, we must agree on defining Industry 4.0 or risk adding to the confusion. And this is half of the problem – Industry 4.0 can be whatever you want it to be, driven by your perceived needs as a manufacturer or as a technology provider with the latest enterprise solution.
For our purposes, we will define Industry 4.0 in practical terms – as a technology toolbox. And like any toolbox, it is filled with everyday tools (like a hammer) and highly specialized. Industry 4.0 toolbox contains IIOT sensors, Artificial Intelligence, Augmented Reality, Big Data, Advanced Robotics, AGVs, wearables, additive manufacturing, and much more. However, no matter the tool, we can likely agree the common theme is a desire to digitize data, harness it in real-time, and use it to drive improvements in agility and resiliency that could not otherwise be achieved. An “augmentation of the possible,” if you will.
In Industry Week’s most recent survey, only 40% of large companies have a long-term Industry 4.0 strategic roadmap in place. And that figure is only 18% for firms with revenues of less than $1b. So, it is little wonder technology adoption rates are so low – with a lack of enterprise direction, manufacturing professionals are left to figure it out for themselves, and then wrestle for funding and support with Finance and IT. Misconceptions thrive, and soon there is a belief digital advancement equates to an expensive, resource-heavy E2E transformation. In reality, some basic steps can be made inside the four walls of facilities, with a strong and rapid ROI.
FOCUSING ON THE FUNDAMENTALS
Before continuing a conversation about Industry 4.0, let us go right back to the “Why?” Are today’s manufacturing goals any different from those of prior decades? The fundamental objectives inside a plant remain the same:
- Health and safety of personnel
- Best possible quality
- Optimized throughput
- Engaged and productive employees
- Cost optimization
- Effective supply and demand planning
In simple terms, we want to see tangible, quantifiable, extraordinary business, and operational results that transition the organization into a top quartile performer. Every business improvement initiative is designed to impact positively on one or a combination of these fundamental goals. If Industry 4.0 gives us the technological toolbox to accelerate progress and improve business performance, why do so many companies lag in adoption?
THE HURDLES TO CHANGE
We have already touched on the biggest hurdle – a lack of strategic vision at the enterprise level. Industry 4.0 is “too big to handle,” leading to acceptance of the status quo. From the perspective of most senior leadership, the legacy equipment and systems do their job, and we can find sufficient marginal improvements around the edges without additional investment. This is likely not the feeling on the manufacturing floor. The result is many organizations do not seek to grasp the opportunity presented by individual elements of Industry 4.0. Taking a bite-sized approach and building a plan around the fundamentals could be a simple first step.
Financial investment is a key requirement, and technology gridlock can easily become a major hurdle. The fear of OT/IT cost and complexity is understandable. A perceived need to invest in new and expensive software systems and hardware infrastructure is common. Not to mention the seemingly high organizational costs of implementation – potential production disruption, resource drain, or the risk of getting stuck in the “pilot trap.” Poor definition of outcomes, initiatives are driven by IT, and not Operations are likely to fail.
Advancement does not necessarily require massive investments in new ERP and IT infrastructure. There will be a level of investment, but the keyword is investment. Too many organizations fail to build the right business case for change and instead focus only on cost. Picking the right tool requires clarity and understanding of both qualitative and quantitative, measurable benefits. Simply installing sensors to capture real-time and accurate OEE measurements can have immediate and significant impacts with a highly desirable ROI measured in months, not years. Assuming the data is properly leveraged by operators and supervisors.
Of course, in too many instances, people are not ready for change. The fear of change is very real on the front line. The “lights out” factory does not need operators on the shop floor. But how real is that objective for most organizations today? People tend to jump first to the worst conclusions. Handled poorly, technology is seen as a path to unemployment. Handled well, technology can be welcomed as an enabler – yes, this will require a certain amount of upskilling (and therefore investment). Still, if better-trained operators can focus on value-added activities rather than reactive observation, it is a very different change conversation.
TURN THIS THINKING ON ITS HEAD
We need to create a new and practical conversation, not one focused on the technology but one which considers broader business needs and the organization. If the coronavirus pandemic has taught us anything, we need to build organizational agility and resiliency. As a leader, ask yourself if you can drive these six steps inside your plant or organization.