The Truth of Industry 4.0 Innovation
Today, hundreds of manufacturing, technology, and business leaders are converging in Detroit to learn about Industry 4.0 and how it will impact their businesses as part of Automation Alley’s Integr8 conference. While in some aspects, it might feel like we’ve reached peak saturation with Industry 4.0 as a concept, the outstanding attendance at Integr8 is proof positive that while the term is familiar, the widespread understanding of how to successfully execute it is still being defined in real-time, and there is still a desire for more information.
Industry 4.0 is generally defined as the convergence of the physical and virtual—or a cyber-physical revolution. When it comes to its application to the manufacturing industry, it can be simply defined as “connected manufacturing,” or the ability to connect systems, machines, devices, and people with process, algorithms, and software.
As chief technology officer of Plex Systems, an ERP, MES and IIoT software company that builds technology with the power to digitally transform manufacturing businesses, I’ve been fortunate to be closely involved in everything from technology development through implementation. Based on this experience, what I can tell you is that while there are a few technologies associated with Industry 4.0 that I believe are clear and true game changers—Artificial Intelligence (AI), additive manufacturing, and blockchain, among them—I would argue that the potential of connected manufacturing is only as important as manufacturers’ ability to execute on it.
The truth is that for many companies, new technology implementation can fall into a type of “pilot purgatory.” This term, coined by McKinsey and Company, describes a common affliction: two of every three new technologies piloted fail to scale, despite carefully planned digital transformation initiatives, ROI assessments, and technology selection processes.
Here are the three tips any manufacturers should consider to successfully adopt and benefit from Industry 4.0 technologies.
Start with a business strategy, not an Industry 4.0 strategy.
Ever read an article that loudly proclaimed, “You need an IoT strategy immediately!”?
Here’s the deal: You are not really trying to implement new technology. You are trying to improve your business. Any new technology should help you do things like improve product quality, run your operations more efficiently, or improve safety on the shop floor. This might range from choosing a new MES or ERP system to implementing industrial-grade wearables. But consider this example: Industrial-grade wearables don’t just look modernistic—they can help your operator automate spec requirements, helping them work more efficiently while improving your company’s part quality.
Technology is a tool, it is not the endgame. It is simply a mechanism to get somewhere.
Apply technology to a well-defined process.
Advanced technologies can accelerate transformation, but applying technology to a broken process will go nowhere. Not only will it be difficult to determine if failures are a result of the process or the technology, but it’s also likely that you’ll spend your time focused on either distinguishing the two or debugging the process alone—leaving your technology pilot with little to no empirical validation.
How do you get around this? Identify a pocket of data somewhere that is trusted and consistent.
Consider the story of leading manufacturer Stant. The company produces thermal and vapor management products for automotive and industrial OEMs and the automotive aftermarket. Its team identified an opportunity to improve its accounts payable process. Within this process, the team identified several issues such as repetitive and time-consuming mundane tasks, incorrect data entry, and ERP tools not being properly used by the team. These issues ultimately led to weeks-long backlogs of invoices without analytics to properly understand root cause. Instead of adding staff, the team at Stant explored Robotic Process Automation (RPA), a technology more commonly associated with the finance industry. By focusing on a specific, well-defined process and associated data fields, Stant’s RPA application, affectionately called “Botty McBotFace,” automated some invoice-matching steps. This effort helped reduce the invoice backlog from weeks to just four days, producing an initial savings of $50,000 and resulting in an opportunity to expand bot applications and streamline other parts of the business.
Respect the stakeholder process.
Deloitte predicts that in the coming years, almost all work will involve people working alongside technology or robots they are not currently working with today. I’ve witnessed what happens when people aren’t considered an essential part of the technology or robot implementation process: at best, your team will feel disrespected and unmotivated. At worst, you might be looking at passive or overt sabotage. Not to mention, you’ve also missed the opportunity to gain valuable insights from the people who are working to get your products into customers’ hands each and every day.
To guard against this common misstep, you should identify and assemble a group of stakeholders that you involve from the beginning. They should come from many departments, be cross-functional, and be considered and treated as essential to the success of the program. While coordinating and communicating to this group might feel burdensome, especially if it is a project that doesn’t require senior buy-in, it is absolutely necessary to improve your ability to move from pilot to implementation.
While pundits and technologists might argue about which Industry 4.0 technology may be the most important, or the most realistic, I think we need to remain focused on what’s important. Technologies are tools to help you make better car parts, ice cream, and airplane engines. And when used well, they can lead to an impressive opportunity to transform not only your operations, but your entire business
Today, hundreds of manufacturing, technology, and business leaders are converging in Detroit to learn about Industry 4.0 and how it will impact their businesses as part of Automation Alley’s Integr8 conference. While in some aspects, it might feel like we’ve reached peak saturation with Industry 4.0 as a concept, the outstanding attendance at Integr8 is proof positive that while the term is familiar, the widespread understanding of how to successfully execute it is still being defined in real-time, and there is still a desire for more information.
Industry 4.0 is generally defined as the convergence of the physical and virtual—or a cyber-physical revolution. When it comes to its application to the manufacturing industry, it can be simply defined as “connected manufacturing,” or the ability to connect systems, machines, devices, and people with process, algorithms, and software.
As chief technology officer of Plex Systems, an ERP, MES and IIoT software company that builds technology with the power to digitally transform manufacturing businesses, I’ve been fortunate to be closely involved in everything from technology development through implementation. Based on this experience, what I can tell you is that while there are a few technologies associated with Industry 4.0 that I believe are clear and true game changers—Artificial Intelligence (AI), additive manufacturing, and blockchain, among them—I would argue that the potential of connected manufacturing is only as important as manufacturers’ ability to execute on it.
The truth is that for many companies, new technology implementation can fall into a type of “pilot purgatory.” This term, coined by McKinsey and Company, describes a common affliction: two of every three new technologies piloted fail to scale, despite carefully planned digital transformation initiatives, ROI assessments, and technology selection processes.
Here are the three tips any manufacturers should consider to successfully adopt and benefit from Industry 4.0 technologies.
Start with a business strategy, not an Industry 4.0 strategy.
Ever read an article that loudly proclaimed, “You need an IoT strategy immediately!”?
Here’s the deal: You are not really trying to implement new technology. You are trying to improve your business. Any new technology should help you do things like improve product quality, run your operations more efficiently, or improve safety on the shop floor. This might range from choosing a new MES or ERP system to implementing industrial-grade wearables. But consider this example: Industrial-grade wearables don’t just look modernistic—they can help your operator automate spec requirements, helping them work more efficiently while improving your company’s part quality.
Technology is a tool, it is not the endgame. It is simply a mechanism to get somewhere.
Apply technology to a well-defined process.
Advanced technologies can accelerate transformation, but applying technology to a broken process will go nowhere. Not only will it be difficult to determine if failures are a result of the process or the technology, but it’s also likely that you’ll spend your time focused on either distinguishing the two or debugging the process alone—leaving your technology pilot with little to no empirical validation.
How do you get around this? Identify a pocket of data somewhere that is trusted and consistent.
Consider the story of leading manufacturer Stant. The company produces thermal and vapor management products for automotive and industrial OEMs and the automotive aftermarket. Its team identified an opportunity to improve its accounts payable process. Within this process, the team identified several issues such as repetitive and time-consuming mundane tasks, incorrect data entry, and ERP tools not being properly used by the team. These issues ultimately led to weeks-long backlogs of invoices without analytics to properly understand root cause. Instead of adding staff, the team at Stant explored Robotic Process Automation (RPA), a technology more commonly associated with the finance industry. By focusing on a specific, well-defined process and associated data fields, Stant’s RPA application, affectionately called “Botty McBotFace,” automated some invoice-matching steps. This effort helped reduce the invoice backlog from weeks to just four days, producing an initial savings of $50,000 and resulting in an opportunity to expand bot applications and streamline other parts of the business.
Respect the stakeholder process.
Deloitte predicts that in the coming years, almost all work will involve people working alongside technology or robots they are not currently working with today. I’ve witnessed what happens when people aren’t considered an essential part of the technology or robot implementation process: at best, your team will feel disrespected and unmotivated. At worst, you might be looking at passive or overt sabotage. Not to mention, you’ve also missed the opportunity to gain valuable insights from the people who are working to get your products into customers’ hands each and every day.
To guard against this common misstep, you should identify and assemble a group of stakeholders that you involve from the beginning. They should come from many departments, be cross-functional, and be considered and treated as essential to the success of the program. While coordinating and communicating to this group might feel burdensome, especially if it is a project that doesn’t require senior buy-in, it is absolutely necessary to improve your ability to move from pilot to implementation.
While pundits and technologists might argue about which Industry 4.0 technology may be the most important, or the most realistic, I think we need to remain focused on what’s important. Technologies are tools to help you make better car parts, ice cream, and airplane engines. And when used well, they can lead to an impressive opportunity to transform not only your operations, but your entire business
