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October 5, 2020 Article 6 min read

Industry 4.0 encompasses the intelligent interconnectivity between automation, digitization, and data analytics driving recent transformative change. Mid-market manufacturers who invest in digital acceleration will better position their organizations to manage disruption and compete. Is your organization ready for connected and automated manufacturing?

Man using futuristic manufactuing machine. Increasing productivity is what drives every industrial revolution. At its core, Industry 4.0 integrates humans, machines, and data to provide a holistic and interlinked approach to manufacturing. It allows for optimal control and transparency into every enterprise aspect to boost efficiency and drive growth in a range of manufacturing and distribution settings. The rate of maturity varies among complex manufacturers, but one thing is certain: Transformation isn’t going to happen with traditional methods that were once popular years ago. Failure to adopt emerging technology threatens your market share, margins, and ability to innovate.

Are you ready to adopt Industry 4.0 technologies and become a “smart factory?” If so, you’ll transform quality, supply chains, customer relationships, and most importantly, your competitive advantage.

Is digital enterprise a part of the next Industrial Revolution?

Industry 4.0 is synonymous with smart technologies. Key components are cyberphysical systems, artificial intelligence (AI) and machine learning, advanced data analytics, collaborative robots, virtual reality, sensors, and additive manufacturing (think 3-D printing). This Internet of Things (IoT)  — the “intelligent connectivity of smart devices” — will be a critical component in a smart factory, but it’s the underlying data systems that will be the key enablers of the maturity of your Industry 4.0 strategy.

What’s required in an Industry 4.0 strategy?

The rapid pace of digitization in commercial industries today is rapidly transforming many organizations and catching others by surprise. Getting started with Industry 4.0 is easier than you think. Here are the three main components of an Industry 4.0 strategy:

  1. Intelligent sensors. In the industrial IoT landscape, all “things” will be equipped with smart sensors, allow manufacturers to track everything they produce from cradle to grave. As a valuable data source, these sensors will have their own microprocessors, be integrated into production systems, and carry out complex signaling functions.
  2. Data system. It’s impossible to drive organizational change without reliable information. Connected data information systems will be the heartbeat of Industry 4.0. It’s all about gathering real-time industrial data from myriad sources into a warehouse of actionable information.
  3. Data analytics. Big data will help those on the shop floor identify patterns and trends and then draw conclusions that inform more knowledgeable and tactical business decisions, whether that’s harnessing virtual reality, machine learning, or other smart technologies. It will allow humans, machines, and processes to be more nimble, responsive, and proactive.

Connected data information systems will be the heartbeat of Industry 4.0.

What are the benefits of Industry 4.0?

Manufacturers in the middle market are at different stages of Industry 4.0 adoption and maturity. You can start with incremental improvements to your current capabilities — they add up over time and drive measurable return on investment enterprise-wide. No matter where you’re starting from, we can help you establish a clear vision and action plan. Benefits of Industry 4.0 include:

  • A more agile supply chain. In a smart factory, your supply chain is a highly efficient network of suppliers, transporters, distributors, and customers. Smart technologies — autonomous logistics, integrated planning systems, and advanced analytics — will quickly anticipate disruptions and react to them, allowing you to adapt to changing conditions in real-time.
  • Improved workplace safety. Data will be gathered and acted on instantaneously, preventing possible hazards from turning real. If an employee moves into a designated unsafe area or too close to a machine, smart technologies alert a floor manager or slow the machine down.
  • Increased customer insight. Data analytics will help businesses gain a deeper understanding of each consumer’s buying habits to create a uniquely tailored digital shopping experience, which will foster brand loyalty and customer retention.
  • Increased cost savings. After the initial investment to convert to smart technologies, the built-in intelligence should pay for itself. A decrease in quality problems will translate to less material waste, fewer employees on the floor, and decreased operating costs.

How can Industry 4.0 improve employee productivity?

In the past, operations were reactive: an employee would wait for a machine to break before fixing it — whether that meant changing the oil or replacing a gasket. Aiming for increased efficiency, organizations then adopted a preventive approach. An employee would institute the fix at a predetermined interval, such as replacing a part every 300 hours. In a smart factory, the Industry 4.0 strategy, based on data, is predictive. With sensors, the employee is notified in real-time and, in some instances, a machine could even learn to fix itself. Whereas, performance was once at risk, a shop floor can now become even more productive.

What are three common Industry 4.0 challenges?

Keep in mind that the path to Industry 4.0 maturity isn’t without its challenges. Your journey may be less about a complete digital transformation and more about the demand to integrate technology to achieve stronger relationships with suppliers and customers. As you get started, consider these three challenges:

  1. Cybersecurity. Industry 4.0 is critically tied to data. Therefore, capturing, storing, and safeguarding it will be crucial. With data systems connecting a vast number of machines, even more points in the chain of information will require protection.
  2. Legacy ERP systems and outdated technology. You need reliable, up-to-date information. When your machines or software are out-of-date, smart technologies can’t optimally integrate with them.
  3. Talent. Smart factory employees will need to be comfortable with computers. The challenge will be finding those with an advanced skill set. A prerequisite of Industry 4.0 will be employees who understand data — even those on the manufacturing shop floor.

Industry 4.0 will need employees who understand data — even those on the manufacturing shop floor.

How do we start implementing Industry 4.0 concepts?

If you’re ready to transform your traditional factory into a smart factory and optimize your plant floor, you need to develop a roadmap that will guide you through the change. While each plant floor will encounter industry-specific dynamics, the following four steps can begin moving you in the right direction.

  1. Understand your current environment. You can’t determine where you’re going until you know where you are. Start with an analysis of your machines, people, systems, and shop floor.
  2. Understand your future. Identify the direction in which you’re headed. Perhaps a process that used to meet customer demand could be improved. For example, in the plastic injection molding process, many completed parts are inspected by a person. Industry 4.0 would use sensors during production to make real-time adjustments, therefore improving quality and repeatability. Updating the process provides the manufacturer more confidence that the end product meets customer demands.
  3. Identify strengths and weaknesses. Determine what’s already working well and what isn’t. Do you collect data but lack the workforce to analyze it? Do you have open relationships with your customers that can be optimized, or are you struggling to maintain repeat orders?
  4. Make the plan. The direction in which you’re headed should leverage your strengths. Do you have a proven history introducing new product lines and want to expand into emerging markets? Do you have computer-savvy employees who could thrive with more accurate data? Figure out what you do well and then ask, “How can I do that better?”

If you’re ready to transform your traditional factory into a smart factory and optimize your plant floor, you need to develop a roadmap.

While the idea of a smart factory with dozens of interconnected processes, and AI and automated logistics, seems like a pipedream to some, it’s fast becoming an imperative for most middle-market manufacturers. Those who are quick to adopt digital transformation — are poised for streamlined production processes, and the enhanced ability to mitigate disruption, an agile supply chain, and dynamic growth. With an Industry 4.0 approach, it’s the data, derived from your factory and your shop floor, that will become your competitive differentiator.