January 25, 2023

By: Surbhit Arora, Senior Specialist, Consulting, LTIMindtree

Ever wondered how Marvel’s superhero, Iron Man, commands his virtual assistant to do work for him? He even instructs his machines to build things. Unbelievably, technology is turning this superhero stuff into a reality!

As manufacturers transform themselves from a machine age and information age to big data age, Industry 4.0 is fast becoming a de facto standard to facilitate the increasing involvement of large amounts of complex data for efficient horizontal and vertical integration.

What Comprises Industry 4.0

In simplest terms, Industry 4.0 is a vision of transforming a manufacturing environment into a fully connected ecosystem. This vision can be achieved by following certain design principles and integrating key technology components to transform your current ways of working. Figure 1 depicts some of the key goals, technology components, and design principles of Industry 4.0. Each of these key tenets become the ingredients for the successful and smooth transition through the various maturity stages of this journey.

Here are a few important questions that have been addressed to help you understand your readiness for the Industry 4.0 journey.

1. What?

– One of the fundamental questions that need to be addressed is related to business goals. Where do we want to reach in the next five to seven years? While digitalization offers extensive opportunities to improve operations continuously, any decision made to adopt technologies should be aligned with business goals. After all, every problem is a business problem.

A large manufacturer of building materials, with more than 250 production facilities globally, had a clear goal throughout the whole planning phase: To maintain cost leadership in the industry by smart usage of resources. This clear vision helped the team to address each use case from the cost savings perspective, thus contributing to the overall organization goal.

2. Why?

– The next question you need to answer is why do you think Industry4.0 initiatives will solve your current problems, and help you and your team align to the long-term organization goals? Along with the clear understanding of key design principles as mentioned in Figure 1, one must also have a thorough understanding of the entire process value chain and be able to identify the gaps and areas of improvement.

In one of the many wonderful stories of Renault, they initially found out that the cost-saving and optimizations that could be achieved on the design and manufacturing side were close to 300M Euros/Year. However, realizing the true potential of data, they found that becoming more data-driven could also help them to better manage the lifecycle of the customer relationship and make an additional impact of 300M Euros/Year.

A great article in entrepreneur.com states that “The why is often lost in the daily grind of nit-picky issues and humdrum operations”. Don’t let that happen.

3. When?

– Setting time-based goals is important for transformations of this nature. A project timeline ensures deadlines are met, and that the entire team is unified and working together towards a common goal. A McKinsey’s survey reveals that, “clear communication of the transformation’s timeline has greatest influence on success of transformation.” Another wonderful article by Forbes shows six steps to create simple and effective project timelines.

4. How?

– All the elements of this transformational journey revolve around one big aspect, how are we going to execute this? To start with, it is important to understand where you currently are, essentially your state of maturity. Given the extent and magnitude of transformation, one should always baseline the current ways of working before finalizing the execution approach. DMADV (Six Sigma Approach) can be extremely helpful to define the overall execution plan. Start small, cut the whole project into pieces, and then work on it piece by piece. Make sure to have a strong governance model in place for efficient execution.

In a Forbes article, Justin Grossman, CEO of Meltmedia stated, “By measuring your business’ digital maturity level, you can better understand (and accelerate) progress. Adopting new technology is a starting point, but how will it drive business outcomes?”

5. Where?

Once you have the above answers, it is time to think about where you want to perform this transformation – internally or externally? It does not matter if you put together an internal team or hire a team of external consultants; what matters is empowering people to work in right ways.

Citing the example of a large manufacturer of building materials, third party consultants and heads of multiple departments teamed up to effectively chart out an overall digitalization plan.

In another research done by McKinsey, it has been shown that Digital Transformation requires cultural and behavioural changes such as calculated risk taking, increased collaboration, and customer centricity.

Conclusion

The adoption of Industry 4.0 is a transformation project and as we all know, there is no one recipe for such transformations. Just make sure to have all the ingredients in place, get the answers to all the necessary questions, deep dive and learn more. As rightly quoted by Bernard Baruch, “Millions saw the apple fall, but Newton was the one who asked why.”

Additional References:

https://www.i-scoop.eu/industry-4-0/