How Industry 4.0 Opens New Growth Frontiers For Discrete Manufacturing

Multiple technologies are converging to usher in the fourth industrial revolution. One aspect of this trend, industry 4.0, comes with the promise to improve discrete manufacturing by raising its efficiencies on multiple fronts.

While the benefits of industry 4.0 are vast, it relies on manufacturers to make it a reality and put it into action. This involves utilizing suitable technology to create smart factory setups. Studies have demonstrated that more than 70% of manufacturers believe that intelligent technologies such as the internet of things (IoT), big data analytics, machine learning, and augmented reality are an integral part of their future.

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According to McKinsey, industry 4.0 could bring a value of $3.7 trillion to manufacturers and suppliers in 2025, yet only 30 percent of companies are currently benefiting from industry 4.0 solutions at scale.

The companies that are already making the most of the initiative are adopting these technologies, adapting their working models, and introducing interconnected machines to simplify their operations in more beneficial ways. Around 79% of manufacturers identify increasing profitability and margins as their top priority, meaning it is reasonable to think that they are adopting smart systems, predominantly to push their growth boundaries.

This article examines the ways in which industry 4.0 can be utilized for growth in the discrete manufacturing industry.

According to McKinsey, industry 4.0 could bring a value of $3.7 trillion to manufacturers and suppliers in 2025, yet only 30 percent of companies are currently benefiting from industry 4.0 solutions at scale.

The companies that are already making the most of the initiative are adopting these technologies, adapting their working models, and introducing interconnected machines to simplify their operations in more beneficial ways. Around 79% of manufacturers identify increasing profitability and margins as their top priority, meaning it is reasonable to think that they are adopting smart systems, predominantly to push their growth boundaries.

This article examines the ways in which industry 4.0 can be utilized for growth in the discrete manufacturing industry.

What are the frontiers for growth with industry 4.0?

The majority of companies that take advantage of technology for growth are aiming to improve on these fronts:

•Agility: Faster anticipation of changes within their facilities and within broader markets, also being able to respond quickly to any changes.

•Faster market delivery: Move products more swiftly from ideation and modeling processes to the markets.

•Productivity: An increase in the quality and quantity of products and services delivered by each agent in factories.

•Mass personalization: Quickly deliver products that are specifically tailored to the needs of specific audiences, without being detrimental to efficiency.

The ingredients for growth

The key ingredients for growth in industry 4.0 are the technologies that are now becoming part of a smart factory setup.

One of the most important tools in this process is the sensor. This piece of technology that was once considered futuristic has now become commonplace in many factories. It has revolutionized the way many machines work, creating analytical data that can be monitored and reviewed. This is done by using the sensors to transmit real-time information about current conditions to central databases, effectively turning each machine into a functional data-generation tool.

Cloud computing also plays a significant role. Data generated by each sensor-bearing machine is collected and processed in ‘the cloud,’ which is represented by software installed in systems on the factory premises. With vast amounts of storage and capabilities, the applications present the processed data on dashboards as easily digestible information. The benefit of this is that it transforms the data from sensors into information that human agents can act on.

Machines that are able to utilize Artificial Intelligence (AI) can also act on the data they receive. AI operates by ‘learning’ from repetitive tasks and outcomes, adapting to function accordingly. Robots, or more specifically, cobots (collaborative robots), rely on AI; however, they are not autonomous and work alongside humans on the factory floor.

This collaboration between robots and humans’ ties into a vital point… growth in industry 4.0 is not solely driven by automated machines. The emerging model for the factory of the future is, in fact, directed by humans. Currently, the manufacturers that are pioneering in this area are brownfield sites that are creating forward-looking systems to add to their existing capabilities.

Use cases that could drive growth

The use of previously discussed technologies and industry 4.0 will open up countless opportunities to drive growth in discrete manufacturing. This manifests in several use cases, each of which combines multiple technologies to ensure process efficiencies.

Predictive maintenance

Sensors collect data (Figure 2) about the machines in which they are installed and transmit them via the Internet of Things (IoT) to the cloud. Machine Learning algorithms sort and organize the data into information that an administrator can understand and act upon. As an example, this information could include the details of a developing fault in a machine part that needs to be fixed.

Automated platforms can then schedule maintenance work. A maintenance engineer could also use a VR headset to preview and examine the space or object they will be working with, making the process more straightforward.

The most apparent benefits of this are the cost savings from detecting faults early, as well as the elimination of delays that may result from factory machines breaking down. With reduced spending on maintenance and more time available for actual production, the possibilities for growth are expanded.

Digitized standard operating procedures

Digital Standard Operating Procedures (SOP) are replacing the old notebooks that factory procedures were once written in. Factory staff, who previously had to learn SOP from notes and implement them as best as they could, are now able to see these procedures on screens and follow them in real-time (Figure 2).

SOP software provides users with a secure repository of documents, covering their companies’ standard operating procedures. Quick and easy access to guidelines ultimately reduces errors on the job and improves the quality of workers’ output, another major benefit of implementing this process.

Digital performance management

Besides aiding predictive maintenance, sensors can also raise the bar for performance management in factories (Figure 2). The data they transmit goes to dashboards that relay them as key performance indicators (KPIs) for production. These KPIs give decision-makers a clear view of overall productivity at their manufacturing site.

Because the insights from the dashboards are generated in real-time, they enable managers to make smart decisions more quickly and implement changes to processes as soon as the need arises. They can also identify patterns and improve performance by making adjustments to operations where required.

Innovative labor

There is some concern that automation in discrete manufacturing will slowly reduce the number of humans, transferring the industry to be machine-led. In reality, the factories of the future will display varying degrees of collaboration between humans and robots.

There are many innovations that are simplifying labor tasks, such as AI-powered machines taking over processes that workers consider to be repetitive and monotonous. As the wave of automation sweeps through the industrial landscape, it will leave humans with more creative roles; the ones in which they still outperform robots. These roles are complex and engaging, meaning people are more likely to find them satisfying or fulfilling.

This also means that factories will be more focused on tapping into the innovative talent, and there will be greater collaboration among employees that represent various fields of expertise.

The blend of greater human innovation, real-time solutions, and broader collaboration could push manufacturing companies to new growth frontiers. As opposed to seeing the addition of AI-powered machines as a threat, these can genuinely enhance the discrete manufacturing industry. This use of innovative labor will improve productivity while enabling humans to retain control and focus on less repetitive, more creative, and rewarding tasks.

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Taking advantage of the opportunities for growth

Businesses have to be deliberate about transitioning to the fourth industrial revolution. If they intend to gain an early advantage in their market, they should take these steps:

•Be clear about their aims: They should clearly define the goals they want to pursue with the strategy they choose to adopt.

•Review tools before purchasing them: There are a growing number of firms offering solutions for industrial automation. Manufacturers should examine and test these solutions for suitability before adopting them, avoiding any costly additions that do not bring benefits.

•Follow customers’ needs: Technologies should be adopted only if they help to improve the quality of products offered to customers or increase the speed with which those products are delivered. It’s vital to remain focused on your own objectives, based on demand, and not become sidetracked by sales techniques or what others are doing.

•Improve information management: Without a robust information management framework, factories may be unable to use the data generated from their smart systems as efficiently as they should. Having the correct management framework in place enables you to maximize the benefits of having such complex data readily available.

•Restructure their operations model: Businesses may aim to reach futuristic capabilities in short periods of time by leapfrogging multiple developmental stages. While this isn’t impossible to do, it’s vital to implement lean manufacturing in preparation for the high efficiencies and capabilities of industry 4.0.

Conclusion

New technology is opening up fresh opportunities for growth in discrete manufacturing. AI, IoT, machine learning, big data analytics, and augmented reality are combining to improve production processes, product quality, and management.

There is a clear shift towards using innovative technologies for business growth and improved productivity; however, this relies on forward-thinking manufacturers. It is vital for manufacturers to evaluate their current processes and challenges, considering the ways in which industry 4.0 can improve their efficiency. To do this, manufacturers must look at the value they can add by building on their existing capabilities throughout various processes and stages, as opposed to aimlessly adding new technologies. It is not a matter of using technology for the sake of it, instead, doing so in smart and beneficial ways, combining technologies with existing processes and roles. Infrastructure must be created with the aim of an integrated technology stack and a clear objective, creating operations that enhance value before scaling it up.

By doing this, manufacturers can become more agile and productive, achieving faster market delivery as well as the likes of mass personalization. The benefits of industry 4.0 include the ability to anticipate changes and respond to these, moving products quickly from ideation and modeling to the markets while improving the quality and quantity of products. The result of this is a more efficient process that can also raise the bottom line for companies that adopt them.

The smartest movers will be the ones that take the most benefits from industry 4.0. Manufacturers must transition quickly, strategically, and deliberately to a connected and automated future if they aim to reap the benefits of the fourth industrial revolution.

Industry 4.0 is undoubtedly opening new growth frontiers for discrete manufacturing, providing solutions to age-old challenges and opening up an exciting chapter in the evolution of the industry.

Source:

  1. “The smart factory report,” Deloitte Manufacturing strategy & Smart Operations
  2. “Industry 4.0: Getting Digital Manufacturing Right Report” Bain & Company August 2019.
  3. “Industry 4.0 after the initial hype report,” McKinsey Digital 2016.
  4. “Capturing value at scale in discrete manufacturing with industry 4.0 report”, McKinsey September 2019.
  5. “The next horizon for industrial manufacturing: adopting disruptive digital technologies in making and delivering report,” McKinsey November 2018.

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Fred is a passionate and experienced technical consultant, project manager, and global business strategist.