Industry 4.0: A realistic approach for practical times

How manufacturers can prioritize technology investments in a new normal

Transformative technologies create agility and enable new manufacturing business models for a modern economy. But turning these tools into tangible financial value requires navigating a complex array of possibilities. Further complicating the situation is the economic impact of the COVID-19 pandemic on investments in digital transformation. Many manufacturers are now unable to prioritize investments that do not have clear-cut and near-term financial value. 

From our perspective, manufacturers can accelerate transformation by leveraging their current assets – one of the most valuable is data constantly produced by the operational technology they already use. That data holds the key to solving current business issues and capitalizing on new opportunities. 

Identifying specific tools that can help mine and use that data to address immediate needs is a pragmatic approach to transformative technology – especially given the current environment. 

The hardest hit must act with the greatest urgency

The COVID-19 pandemic has exposed vulnerabilities, forcing businesses to think differently to survive and thrive in a new environment. As a result, many have reprioritized digital transformation to better serve their workforce and customers. 

Manufacturers that have experienced less drastic disruption to their businesses may be better positioned to continue investing in transformative technology. But those hit hardest may have the most compelling need to do so rapidly to close unsustainable gaps in their processes and improve agility and visibility into operations. Why? Because transformative technology is uniquely suited for helping them connect and understand shop floor data that is crucial to making intelligent decisions around the business impacts of the pandemic. 

To increase revenue, improve operational efficiency, reduce costs, or respond to new customer needs, manufacturers must first navigate their way through the complex and rapidly evolving array of technologies driving this fourth industrial revolution. In addition to the Industrial Internet of Things (IIoT), there’s artificial intelligence, machine learning, digital twin, process mining, predictive modeling, cognitive analytics, visualization, simulation, collaborative robotics, augmented and virtual realities, 5G networks, blockchain, additive manufacturing – and many more. 

When executives envision Industry 4.0, there’s a tendency to think about the end state – perhaps that dark factory or warehouse where everything is automated and then monitored and managed remotely. The pandemic and needs for social distancing may have accelerated such thinking. But in reality, that scenario is still far into the future for most organizations. And it’s far from practical for most companies, particularly those struggling to regain stability amid continuing economic uncertainty.

The question then becomes: How can manufacturers use transformative technology to deliver tangible benefits today, while also positioning themselves for an automated future? 
 

To drive value, change the perspective

Adopting any new technology involves a significant investment of resources, so making the right choice is critical. We see a broad spectrum of willingness. At one end are those still extremely resistant to adapt and invest. At the other are those who bite off more than they can chew – taking on too many new technology initiatives or too big of a vision. 

Most manufacturers are somewhere in the middle, experimenting with selected transformative technologies. Often, these trials have evolved from pressure – either top-down or bottom-up – to try something because it is the easiest to implement or the latest and greatest trend. Right now, many are still in an experimental or early stage of deployment. For example, while 82% of manufacturers have either implemented, piloted, or considered IIoT, 70% have not moved past a pilot. In many cases, these efforts lack a clear business objective or measurable business case that’s tied to an expected value. 

That last point is key:

Manufacturers must figure out where best to invest their very limited resources to achieve the greatest balance of benefits across people, operations, and customers.

We believe that happens when manufacturers shift their perspective – thinking not in terms of what new technology do we need to invest in, but how they can better leverage the technology assets they already have.

Manufacturers are missing opportunities to draw insight from their existing data

Manufacturers have already made significant investments in operations technology (OT) and software. This technology collects constant and unlimited volumes of data from manufacturing lines that can be leveraged to derive actionable insights and drive value. Consider the breadth of sources: 

• Operating data sourced from applications (ERP, MES, CMMS, etc.) or equipment (PLCs, SCADA, IIoT devices, etc.)
• Plant operating data (throughput, capacity utilization, etc.)
• Product operating and quality data in the field