Still wondering how to start Industry 4.0 at your factory?
I’ve been working in this space for over 5 years at various manufacturing sites, and would like to help you get started. Industry 4.0 remains a hot topic in manufacturing today, and many best-in-class organizations have already made good gains in this area.
What is Industry 4.0?
“Industry 4.0” is an umbrella term that captures new possibilities with modern technology in manufacturing. The name stems from the so-called “Fourth Industrial Revolution” – meaning a revolution of data, automation, and interconnected systems. (See this IMB post for more info on the previous revolutions.)
So what exactly is it?
Understand it’s more of a collection of ideas and concepts than a specific set of technologies. One analogy we like to use is home monitoring with smartphone apps. You are now able to see who’s at your door, control your thermostat, view your energy consumption, and much more – all with the power of technology. It’s easier than ever before to understand exactly what’s happening at your home.
Now take this idea and apply it to manufacturing. Can you quickly understand what is happening out on the floor without 30 minutes of data extraction and analysis? Is your operation using data to make the right decisions every day? Are you wasting your staff’s time on repetitive tasks that don’t add value?
One note, there are many other buzzwords that also have been used somewhat interchangeably in this area. “Smart manufacturing”, “Internet of Things / IoT”, “Industrial Internet of Things / IIoT”, “Digitization”, “Digital Transformation” and “Digital Factory” are some of the more popular phrases I’ve seen. They are variations on the general theme.
Why Do I Need to Embrace Industry 4.0?
Simply put, if you don’t, your competitors will. By not modernizing your operation, you risk the chance of getting left behind – permanently. According to Harvard Business Review:
since 2000, 52 percent of companies in the Fortune 500 have either gone bankrupt, been acquired, or ceased to exist as a result of digital disruption.
Let’s focus on the positives, though. Digitization can make your life at the factory easier in many ways. It can reduce downtime through maintenance improvements, help you find what actually drives your key process indicators, and give you a much greater understanding of your factory. All of this improves your productivity. According to McKinsey, Industry 4.0 can raise productivity by over 40 percent.
Why Aren’t Companies Adopting Industry 4.0?
Despite all of this potential – many manufacturers are struggling with how to start Industry 4.0 at their site. To be fair, it’s not hard to understand why this is happening.
Industrial companies are often a conservative sector, slow to adapt to new trends. Industry 4.0 is a complex topic that involves many technologies new to manufacturing. Furthermore, there are so many choices with advances and vendors that it’s easy to get overwhelmed. Lastly, while most can concede that many of these new concepts are good advances for their operation, it’s often hard to come up with a concrete ROI number.
So it’s not surprising that a Deloitte survey found that the top challenges for adoption of Industry 4.0 were “lack of vision, too many technological choices, and organizational or geographical silos”.
How to Start Industry 4.0
1. Determine Where You Are and Where You Want to Go
First, understand in a general sense where you are in your digital journey. Many advanced technologies in the Industry 4.0 umbrella have certain prerequisites. For example, to build dashboards displaying machine data, you will first need to connect your machines to a network.
Take stock of the situation across the factory. Where is each machine right now, and where do you want to be in the future? You may want some machines as state of the art, while some others might not need that level of digitization.
2. Brainstorm With Focus & Intent
Then, narrowing your focus can help to mitigate overload on choices. Pick either a certain area of the plant, or a specific technology to get started with.
Conduct a brainstorming session to collect project ideas. When you do this, make sure that each project idea is solving a specific problem at your organization. It can be tempting to fit an exciting piece of technology into your factory, but it’s a waste if you aren’t deriving value from it.
If you don’t know where to start, just begin with your key metrics that you track regularly. Does your team clearly understand its key metrics? What drives those metrics, and how can they be improved upon?
3. Start the Ranking Process
So now you have a list of great ideas, but how do you figure out which one to pick?
I’ve built a simple tool for you to use – just click here to get a link to download. It’s a customizable spreadsheet, sometimes referred to as a “C & E Matrix” (Cause and Effect Matrix). It’s a Six Sigma tool that can be used for many things – in this case we will use it to help you rank your project ideas.
Put your projects into the matrix, then review each column for ranking. Adjust them if needed to meet your business goals. Some ideas for ranking criteria:
- Cost of project
- Timeline of project
- Benefits of project, in dollars or some other measurable amount
- Quality issue (e.g. are you directly fixing a known quality issue through reducing human error?)
- Can this project fit into an existing overall business strategy?
Ensure the categories make sense for you, are relatively clear and won’t take too much time to work through.
Then, get to ranking your project ideas! Go through and assign values for each category for the project ideas. A warning here that this can get bogged down in detailed discussion, so work to move through the ideas quickly.
After that, you have a total score for each project and can sort by that number. See what gets ranked highest, and use that as a guide to build out your Industry 4.0 roadmap.
4. Get Moving on Your First Project
Just because one project gets the highest ranking doesn’t mean you should start with it. I’d recommend starting off small with a pilot project, where you can learn and adapt. For example, deploy a new technology on just one production line. Go for something where you can get a quick “win” to prove a concept and gain buy-in at the plant.
Change management will be critical, and is something I will be covering more in depth in the future. You don’t want to lose trust on a new technology – because that could make the next project even harder to get in place.
After you get some results, move on to the next project and adjust your roadmap. As these projects get deployed, more ideas should spring up naturally at the plant.
When trying to figure out how to start Industry 4.0 at your plant, it’s understandable that many are struggling. There are so many choices to make, and these technologies and concepts are new. Hopefully this article, along with the tool, can be helpful to you. If you have any questions, please don’t hesitate to reach out! Good luck.