There is a hesitancy among many manufacturers to adopt industry 4.0 technologies – cloud -based solutions, cyber-physical equipment (connected manufacturing equipment), and data-enabled transparency and decision making – systems and practices. The primary reason for this is the complexities of these projects and the implementation cost. While these are very legitimate concerns, the benefits of transitioning to these smart technologies far outweigh the time and resources needed for adoption.
A study conducted by Business Development Bank (a financial institution devoted to Canadian entrepreneurs) of close to 1000 companies found that 60% of adopters of digital technologies experienced increased productivity, lowering operating costs and improved product quality. It is safe to extrapolate that manufacturer that do not adopt industry 4.0 will erode their competitiveness and eventually experience increasing cost. In other words, manufacturers must create an implementation strategy for industry 4.0 as soon as possible so that they stay competitive.
Approach for industry 4.0 adoption
Industry 4.0 completely revolutionizes the manufacturing technology, systems, processes and people and hence have some steep challenges as well as deep implications. While the benefits are incredible, going in without a plan of adoption will create numerous problems.
First and foremost, frame a proper understanding of the real problem statement by meticulously analyzing: the manufacturing processes; machinery, material flow and production routes; activities, practices and critical data points; reports used to manage the process; architecture, data flow and input data of all the software systems being used; and finally, an evaluation of adequacy of data being captured. Often operation leaders tend to form a subjective view of the problem statement based on sound bites and hearsay leading to cropping of divergent views on the approach and solution. This can be very misleading and can cause wastage of budget and time. A scientific analysis on the other hand, reveals the true problems objectively and thereby leading to consensus amongst various department leaders.
Secondly, identify use cases according to urgency, data availability and the level of mandatory effort. Care must be taken to ensure that during the change process the production or bottom line is not affected. Once the use cases are identified, the requirement of system capabilities and change of practices are to be enumerated. These requirements are then optimized to be implemented in a phased and structured manner. One way to do this is by creating a model or prototype of these changes and presenting it to all stakeholders and soliciting their feedback. This will ensure a joint ownership of the implementation and will go a long way in driving adoption.
Finally, employees will need to be trained and upskilled to achieve desired business outcomes. For this leadership and management must very clearly articulate the need for the change and also outline a shared purpose for all. This has to be followed by an assessment of employee’s current capabilities to identify any skill gaps that may exist and also determine if these gaps can be filled by additional training. Also, management will have to establish re-skilling opportunities to reinforce and sustain changes. The primary objective of all the training is to drive home two key points: change mindset to treat data as a strategic asset and source of competitive advantage; innovate around new business models to unlock new revenue streams, improve customer experience etc.
Conclusion
Starting and implementing industry 4.0 in an organization’s manufacturing process can be very daunting. It is fraught with various challenges such as complexity of the process, IT integration, data security and privacy, absence of compelling ROI leading to subdued initial investment, lack of digitally skilled workforce, leadership, culture and change management. However, these challenges can be overcome over a period of time. One approach manufacturing companies can adopt to overcome these challenges is by collaborating with consulting partners whose proven expertise in Industry 4.0 systems helps drive successful implementations.