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Manufacturers are under pressure. They need to do more with less which often means finding ways they can save money and expand margins. The options?
- Making more finished products and selling those products cheaper;
- having less costly downtime and less waste;
- and having fewer defects and higher satisfaction, all while requiring fewer raw materials, resources and energy.
Sounds like a lot? It is. History is littered with examples of manufacturers failing to balance these sometimes conflicting priorities. Will Industry 4.0 be the much-anticipated savior?
The next wave of change
Many manufacturing leaders – from business or plant management down to operators – have seen waves of change before. In the 1980s the focus was about lean and lean principles. In the 1990s the conversation shifted to outsourcing with production moving to low-cost countries offshore. Most recently in the early 2000s some of this production has brought back with automation leading to additional efficiency. Yet after each wave – lean, outsourcing, and automation – the demands from the business have increased again.
The latest wave is Industry 4.0. Like its predecessors, Industry 4.0 holds lots of promises around smarter supply chains, manufacturing processes disruption, and even end-to-end ecosystem transformation. But there are also questions about how the theory and hype square with existing investments, established processes, and near-term demands.
Is it really our saviour?
Industry 4.0 is about connectivity and data integration driving smarter factories and supply chains. It is based on IoT principles that allow firms to bring in new data about the manufacturing process. With inexpensive sensors and connectivity technologies, manufacturers can integrate dozens of new production variables. What was the humidity on the factory floor? What was the vibration of the manufacturing equipment? What was the temperature of that machine?
Traditionally this data has not been factored into the manufacturing process. It was collected but not integrated or not collected at all. This is changing. Firms can now pull new information into data models and understand the correlation of variables to factors like equipment downtime, quality, and resource utilization. They can start asking increasingly important questions.
- What is the impact of machine vibration on the quality of the widget?
- Is there a relation between humidity and machine vibration?
- How does that vibration change over time and impact quality?
- Does the vibration of that machine get so strong after producing 100 widgets that I need to shut it down rather than keep running it and producing faulty products?
Smart management teams are understanding that they can deploy Industry 4.0 concepts to bend the cost curve and improve operations. Many leaders have already done this successfully before with lean, outsourcing, and automation. The future represents another turn of the crank.