For decades, we’ve been told that we live in the age of Industry 4.0.
Through the use of technology and information, we’re revolutionizing manufacturing. Automation and cyber-physical production systems are enabling flexible mass production. Machines will be able to operate independently by collecting, analyzing and then using data to accelerate production. Technology will empower customer-oriented production at scale.
The theory and goal of Industry 4.0 is exciting, elegant even, but the practice and implementation has been uneven and frustrating for many manufacturers.
For every sensor- and system-guided production line, there’s still a manager walking the floor with a pencil and an old spreadsheet leveraging experience and judgment to track and optimize production. For every dashboard that tracks machine utilization in real-time, there’s an intern updating a whiteboard after a phone call to a line manager
If Industry 4.0 is the goal, it’s a goal that remains out of reach for many industrial manufacturers. It’s a revolution in theory, not yet in practice.
Manufacturers and the Challenge with Technology
To put it succinctly, the goal of Industry 4.0 is to connect people, machines and physical assets inside a digital ecosystem. Once the connection is made, computers, machine learning and automation will enable autonomous and smart manufacturing. Data collected can be used by the system to enhance, optimize and improve production.
For many manufacturers, this is a description with more questions than answers.
There’s no easy way to get started. How do you collect the data? Where is it stored? If you aren’t an expert, then purchasing new machines or implementing new software systems can lead to an expense without a return. Simply changing production processes is difficult, if not impossible. In manufacturing, every change is a risk. At what point does the risk of doing nothing outweigh the risk of change? Manufacturing is a series of interconnected processes. Where in that web of processes can you safely fit the new process or system needed for Industry 4.0?
Every process and production line is different, so looking for an off-the-shelf smart manufacturing system is a non-starter.
Without a clear path forward, many manufacturers decide to wait. Filling that digital ecosystem and then using data presents a conundrum that many manufacturers are neither prepared for nor confident in overcoming. This is especially true for industrial manufacturing.
Industrial and Heavy Industrial Manufacturing and Industry 4.0
Typically, industrial manufacturing uses raw materials to fabricate the products for use in downstream manufacturing. For example, the industrial manufacturer produces the steel needed in auto manufacturing, the paper used in packaging, or the motor used in your kitchen blender.
With a focus on basic materials rather than end products, industrial manufacturers need to differentiate their offerings through efficiency. In industrial manufacturing, a more efficient production process results in lower production costs and increased productivity, which means higher profit margins and greater value (through responsiveness) for the customer.
The Custom-Built Conundrum for Industrial Manufacturing
The increasing demand for custom-built products is also pushing industrial manufacturers to adapt. A standard product, while suitable for many uses, has a lower profit margin for the manufacturer. Custom-built products offer buyers and OEMs specific characteristics. Standard products aren’t suitable for many new applications and downstream production.
In addition to the higher-profit margin, industrial manufacturers are seeing greater demand. As the industry looks to diverse products to better meet end-user needs, it is increasing the use of custom-built industrial products. That’s where the industry is seeing growth.
The need to adopt Industry 4.0 strategies for industrial manufacturers has never been greater.
4 Steps Toward Industry 4.0 for Industrial Manufacturers
Taking the confusion and hesitation out of a move toward smart manufacturing and Industry 4.0 should be the goal of companies helping and enabling manufacturers to modernize processes and leverage technology. Here are four steps manufacturing leaders can take for their business:
1. Identify and Include Stakeholders
Moving toward Industry 4.0 and smart manufacturing isn’t an operations initiative, an engineering issue or an IT problem alone. To succeed, it needs to be a corporate initiative with the full support of business leadership and alignment of every division. It’s a cultural shift for the business as well as a technology and process change.
You’ll need to identify leaders and stakeholders across the business who can provide input as well as guide the change in their areas. They’ll need to be given support and the freedom to explore and execute on the strategy. Their input needs to be part of the goals, and should shape the roadmap and overall strategy. Remember, a successful Industry 4.0 initiative requires people as much as technology.
2. Conduct an Operations Assessment
Rather than starting with the end goal of your Industry 4.0 initiative, start with an assessment of your current operations to identify opportunities and gaps. Your corporate team can help, but we suggest using an outside resource to lead the assessment. They can review not only your existing operations and where you can expect to see results, but also identify the initiatives that will deliver the highest returns.
By leveraging an outside perspective, you can overcome misconceptions you may hold about current processes. You’ll identify early any challenges that the project will need to overcome, and discover additional benefits. With an operations assessment, you’ll have the information you need to make confident decisions as you work to improve your manufacturing outcomes.
3. Inventory Tracking and Smart Labelling
Radio-Frequency Identification (RFID) has come a long way since the first RFID device was introduced in 1946. Today, in conjunction with receivers, RFID tags and chips can be used to automatically track inventory and equipment. Material technology has advanced to the point where tags can be used in demanding industrial applications, including the production of steel and aluminum.
With the right tags and receivers, manufacturers can easily implement a system to reduce downtime, increase asset utilization, track production and manage their inventory. Streamlining and improving shipping is another area where RFID and tracking labels have an application.
4. Product Inventory Management (PIM)
An important early step toward creating a digital ecosystem is eliminating disparate information systems. You need a single source of production truth. You need a way to disseminate and communicate that information along the value chain, especially when working with custom-built products. That’s where a PIM can help.
A PDM and an MES can manage production itself, and an ERP can handle billing, but a PIM can unlock the product information along your sales channels, providing more than what appears on the shipping invoice. It can close that communication gap that fuels confusion and inefficiency between the supplier and the customer, especially when it comes to custom-built products.
Embracing Change and Industry 4.0
In manufacturing, change isn’t easy.
Any change requires coordinating people, machines and processes. Standardization and consistency are signs of efficiency and success. Change is anything but consistency.
Change may not be easy, but it is necessary. As technology improves and becomes more prevalent, then customers will become accustomed to a level of service and customization, and that requires smart manufacturing. As business leaders look for additional cost savings, growth opportunities and profit improvement, the need to change will outweigh the reluctance. The measures we outlined above provide a guide for companies looking at smart manufacturing and Industry 4.0, and taking the first steps toward improved production.
If you have questions, or want to explore your options, then contact the team at GO2 Partners. We’ve been helping businesses overcome challenges holding them back for more than 25 years. Let’s see what we can do for you.