So what does the modern connected factory look like? The truth is there isn’t a single answer. Still, it’s helpful to look at the trends. According to a recent BCG survey of manufacturers, 53% of respondents said that adopting Industry 4.0 was a priority; while over half of the respondents identiﬁed technological transformation as a priority. In price-sensitive industries (semiconductors, electronics, automotive), as many as 80% believe Industry 4.0 should be an immediate priority. The respondents are conﬁdent that these trends will continue. The same survey found that 70% of manufacturing experts believe that factory digitization will be “highly relevant” by 2030.
A 2018 McKinsey survey of global manufacturers, a large cohort of companies have taken signiﬁcant steps toward a digital transformation. The survey found that 64% of respondents have connectivity programs in the pilot phase, while another 23% are beginning to experiment with connectivity. 70% are piloting intelligence programs, and 61% are already piloting ﬂexible automation. Of those that responded, only 30% have achieved Industry 4.0 impact at scale. What this means is that a majority of manufacturers are taking steps to integrate digital technologies into their operations. They’re making their factories more connected, smarter, and increasingly automated.
But manufacturers are not adopting all Industry 4.0 technologies at the same rate. In 2016, BCG found that cybersecurity and big data analytics were the most commonly implemented technologies, followed closely cloud computing. The technologies with the lowest level of adoption are those most likely to be associated with a “futuristic” factory. Additive manufacturing, advanced robotics, and augmented reality all had implementation rates around 28%. In the most recent assessment, a consortium of research groups concluded that roughly 40-50% of the existing machines are connected to a digital infrastructure, if only partially. Though, according to recent WEF estimates, 70% of manufacturers are piloting Industry 4.0 technologies, considerable investment is still necessary to turn experiments into value at scale. For SMEs and multinationals alike, it takes the right mix of strategy, investment, and foresight to avoid “pilot purgatory.”
There is no one-size-ﬁts-all strategy for a successful Industry 4.0 transformation. Strategies will vary depending on company size, industry, geography, and competitive forces, among others. According to a recent WEF report, there are two, complementary routes to scale for companies looking to leverage Industry 4.0 technology to their advantage :
- Innovate the production system: expand competitive advantage through operational excellence.
- Innovate the end-to-end value chain: create new businesses by changing the economics of operations.
Along this road there are some common stumbling blocks :
- Lack of Executive Vision : The executives who participated in Deloitte’s Digital Transformation survey agreed that a lack of a long-term, detailed executive vision is the greatest barrier in a digital transformation. Devising the right digital strategy requires detailed knowledge of an industry, and the foresight to anticipate which technologies will be most disruptive in a given space. The most successful digital transformations occur when executives set 1, 3, 5, and ten year goals for their digital transformation.
- Starting Too Big : A full digital transformation doesn’t happen overnight. It’s a product of long-term, incremental changes to technological ecosystems. Still, many companies strive for full digitization without ﬁlling in the gaps. The best transformations will work from proof-of-concept to proof-of-concept, putting pieces into place as they work toward something larger. They’ll build on early successes, embrace failure, and gradually build a suite of technological solutions that work together.
- Not Connecting The Dots : The ideal factory is seamlessly connected. But not all technologies are equally amenable to integration at an early stage. Failing to start with basic infrastructural improvements (wiﬁ, server space, reskilling and talent acquisition) can hinder later initiatives. All the data in the world, for example, won’t help without data scientists to make meaning of it.
How to Implement a Digital Transformation?
1. Begin with concrete business goals : Many Industry 4.0 digital transformations fail because they lack a clear goal other than a digital transformation. Put differently, they fail because they aren’t motivated by a clear business outcome. When planning a digital transformation, ﬁrst identify what new technologies can and should do for your business. Then explore what options will help you attain these goals.
2. Have a roadmap : When it comes to a digital transformation, it’s not enough to think in the short-term. Manufacturers planning a digital transformation should place their early initiatives within the context of a long-term strategy. This involves identifying how early programs will build the infrastructure for later developments. As PricewaterhouseCoopers argues, all digital transformations should take an “ecosystems” approach. Don’t just think of each piece of new tech in isolation. Envision and map the entire system you’ll like to see implemented on the shop ﬂoor.
3. Experiment with single technologies : Pilot projects offer an opportunity to establish a foundation for a digital transformation. Because of their low cost and experimental nature, they provide an opportunity to fail without disrupting business. When pilots succeed, manufacturers can use the success as leverage to garner support for expansions. If they fail, they offer a chance to hone strategy.
4. Focus on ROI : Digital transformations are a means to an end. At every stage, manufacturers working on a digital transformation should ask themselves what advantages their gaining from their efforts, and how every investment impacts the bottom line.
5. Keep lines of communication open : It’s easy to think of the digital factory as one without humans. But humans aren’t going anywhere, and top-down digital transformations that fail to account for the needs and experiences of workers are bound to encounter friction. Executives should involve shop-ﬂoor workers in the digital transformation. No one knows a factory’s processes better, and few are better poised to provide information about needs and inefﬁciencies.
6. Build education into the process : One consequence of Industry 4.0 is that old job descriptions are reaching obsolescence while others are springing into being. As a result, reskilling, upskilling, and ongoing education have never been more important. Managers can enhance their transformation by identifying candidates for upskilling, and making sure that the employees who need to develop new skills, can. In some cases, Industry 4.0 technologies can be used to augment training initiatives.
7. Never stop improving : This may be obvious for the industry that turned continuous improvement into a science, but it bears repeating: a digital transformation is not something that happens once. Disruption is now the status quo. Staying successful means building agility into the foundation of a manufacturing operation.
As a summary, Industry 4.0 has caused us to reﬂect on the state of work in the world. According to the most recent Industry 4.0 reports, commentators have stressed the potential human impact of advances in manufacturing. As a revolution in one of the world’s largest economic sectors, Industry 4.0 has the chance to shape our world for decades to come. The manufacturers that control the data producing in their factories will gain competitive advantage over those committed to hoarding unique knowledge.
See you in next blog with the following topics :
- Lean Production – An attempt at a definition
- Meaning of standards
- Lean is a holistic approach, not a methods toolbox
- The interplay of Lean elements in the Toyota Production System
- Impact directions of digitalization and Industry 4.0
Kadıköy, İstanbul – TURKEY
M. Temel AYGÜN, Ph. D. in Aerospace Eng.https://www.linkedin.com/in/mehmet-temel-aygün-1066a514/