Most manufacturers are just now embarking on their exploration of Industry 4.0 and figuring out how to use automation, data exchange, cloud computing, and Internet of Things (IoT) technologies to create smart factories. According to the Oxford English Dictionary, the definition of “explore” is “to travel in or through an unfamiliar area in order to learn about or familiarize oneself with it.” In my role as the marketing leader for our company’s industrial and high tech verticals, I frequently discuss the future of manufacturing with our customers. These are exciting times in terms of both technological advancements and clarity around the potential for a new world order in manufacturing.
The Nature of Exploration
I think there are interesting analogies between the era of the great explorers and the current state of the manufacturing landscape. When Christopher Columbus set out on his first voyage to the New World in 1492, his objective was to find a passage to the riches of the Far East. His aspirations were lofty, but his plans were flawed, and he had trouble showing investors a return on investment as he struggled to obtain the funding for his trip. He famously miscalculated the earth’s circumference, and of course, he was caught by surprise by the tremendous land mass of the American continents. The voyage was long. The setbacks were many. There were prolonged periods where he was unable to give feedback to his backers, and to be honest, there were many at home who doubted whether he would return at all. Ultimately, Columbus journeyed back to Spain with the treasures of an entirely new continent that—although not perfectly aligned with his original goals—provided his supporters with unprecedented returns.
Exploring the New Manufacturing Landscape: Industry 4.0
Interestingly enough, current Industry 4.0 exploration efforts share many of the same characteristics as those of the expeditions of Columbus and other notable explorers. Many of these trailblazers started their journeys with the conviction that great results were achievable. However, because their expeditions had not been attempted before, the plans were, in many cases, uncertain and imperfect. Investment in exploration was inconsistent and sometimes based on leaps of faith. Explorers and their supporters knew there would be surprises and obstacles along the way, but none that couldn’t be managed or survived. Similarly, in the manufacturing sector, there may be some in the organization who feel like these early Industry 4.0 explorers might not make it back. I think one of the most appropriate analogies is that we are just now receiving preliminary reports about these early forays into Industry 4.0. Manufacturers have taken small steps while exploring the possibilities. The “New World” is showing promise and proving worthy of further investment and investigation.
The Exploration Phase: Behind the Buzz
Why is there so much buzz about Industry 4.0 if we are still in the exploration phase?
Currently, the thrust of the conversation around Industry 4.0 is not originating directly with these early explorers. Rather, it is coming from companies that are selling some portion of the Industry 4.0 solution. Sales teams of networks and communication gear are touting the necessity of robust cybersecurity. Database vendors are hawking the critical need for storage and machine learning-based analytics. As an enterprise resource planning (ERP) software vendor, we espouse the value of digitized transactions and connected supply chains. Hardware, software and services vendors all have Industry 4.0 value propositions, but frankly, none of us has a one-stop-shopping comprehensive solution. Along those lines, I’m sure European citrus sales teams told Columbus the single most important consideration on his journeys was taking enough oranges to keeps his crews from getting scurvy.
Make no mistake: I’m no fan of scurvy. However, an ample supply of oranges and lemons was not a complete solution. Correspondingly, no single technology provider can sell Industry 4.0 to a manufacturer. Individual companies must embrace technology sets on iterative and repeated cycles. Most importantly, all this transition must take place while delivering on customer service levels, unwavering quality expectations and profitability from this quarter’s production orders.
I have the good fortune of interacting with a broad spectrum of industrial manufacturers, and I’m often asked if Industry 4.0 is particularly well aligned with a specific type of product or process. Much of the hype surrounds assets, and the advent of cyber-physical systems that allow us access, analysis, and intimate understanding of inner workings. This heightened connectivity and awareness is then the basis for improving the operational efficiency and effectiveness of the respective assets.
Within the four walls of many manufacturing facilities, there are critical equipment assets that represent a huge investment, often north of seven figures. Technology that delivers clearer analytics on production performance and provides insights to avoiding unplanned downtime are common entry points in an Industry 4.0 initiative. Every incremental unit of production, reduction in material consumption, or expansion of capacity delivers to the bottom line.
Original equipment manufacturers (OEMs) also have a keen interest in the connectivity of the assets they sell and deploy at customer sites. Entirely new business models are being created by these companies which are continuously connected to the operational data from an asset in use. This connection is an obvious extension of a long-standing, manual service relationship for major complex assets, such as turbines or sophisticated processing machinery. The interesting development is that Industry 4.0’s readily accessible and affordable capability also applies to significantly less expensive assets, such as vending machines or simple medical devices. The OEM delivers a better customer experience through expertise monitoring and support and can often correspondingly find ways to generate incremental revenue.
The least talked about OEM benefit is the unprecedented insight into actual product usage and the product lifecycle. Often, the only feedback many product design engineers receive is from defective units. Even these products did not have the ability to tell their story and provide insights into their actual experiences. Imagine the design engineer having access to the equivalent of an airplane black box recorder for every deployed unit. The richness of that data and the insights into optimal usage could radically change the speed necessary to bring next-generation products to market and increase competitiveness.
Finally, for manufacturers in made-to-order environments with manual assembly processes, there are opportunities to embrace the exploration. Automated material handling, digitized reporting and quality transactions are all enabled by Industry 4.0. The impact can be significant even without complex major assets or hundreds of cyber-physical sensors.
There is no singular way to embark on this effort, and most companies are in the preliminary stages of laying foundations for the Industry 4.0 revolution. Manufacturers are choosing selective technologies and application sets. Not all of these choices are perfect, and the rapid pace of technology advancements will require adjustments along the way. Companies that have made progress are reaping early benefits and in some cases, gaining competitive advantages. New business models are being created with unprecedented connections and empowering business knowledge.
Industry 4.0 provides a significant business opportunity to rapidly change how products are designed, fabricated, upgraded, and serviced. I realize the exploration of this new world has just begun, but the only way to get your name on a holiday in October is to get started...now. And watch out for that scurvy!