Is Industry 4.0 falling flat? The concept took the manufacturing industry by storm and caused companies to budget and reprioritize efforts to embrace modern technology and practices; some even going as far as creating entire organizations of people dedicated to cracking the code for the “factory of the future.”
Despite all this, manufacturers still haven’t reached the expected levels of success with Industry 4.0. Companies that jumped at the promise of Industry 4.0, adopting new technology and connecting more devices, did so without defining goals for these projects.
I’ve witnessed this happen at a final assembly and delivery company that created digital-transformation organizations and assigned teams to define the future of work using modern technologies. While the teams are made up of smart and talented leaders, they aren’t the ones feeling the pain of the everyday problems in the factory. Instead, they’re focused on unique silos and charters within the organization.
Often they are asked to evaluate multiple technology options, without addressing the baseline question: “What would success and payback look like in X amount of time?” It’s impossible to answer this without marrying their work with that of operational counterparts. Sure, executives want the daily and weekly progress reports, but how are they defining how data and new tools will drive change? At what cost is more data collected without understanding the insights it will provide? A much better starting point for transforming a business is aligning these visions to P&L, internal culture change and customer service impacts.
The manufacturers I work with that have gone back to the basics are attaining real value from Industry 4.0. A vice president responsible for operations and technology advancements said he doesn’t approve requests for new equipment or tools until his team can present a real business case for the need. Rather than leading with technology as a hammer looking for a nail, he starts by asking teams to find the root causes driving the perceived need for new equipment. Could they improve efficiency by updating current processes or by using existing tools to avoid spending that money? Would this allow them to take on more customer demand and increase company revenue?
Answers to these questions can identify use cases and opportunities that Industry 4.0 technology (IoT, sensors, analytics, etc.) could help address.
In many cases, I’ve seen this approach lead to cheaper solutions and faster deployments that avoid the risk of spending millions on new equipment with no guarantees of addressing root problems. While this scenario has many variables and assumptions, the point is that by going back to the basics to understand goals, you reduce the risk of tech-led investments and can better evaluate how technology can help meet goals.
So, what now? Before jumping at the hype of modern technology, manufacturers need to take a hard look at the full picture and ask several key questions: Do we have the right metrics to track the success of these projects? Are they aligned to our financial outcomes? Are we involving the right people when making decisions, including representatives from the shop floor? What are our biggest problem areas and how can we resolve them? What do we plan to do with the data and who will use it? How frequently will we use this data? What is our current state? Can we define near- and long-term goals?
Asking these questions helps ensure you don’t overlook the basics. You won’t simply jump at new technology; instead, you will be able to understand the true impact these tools have on the broader organization.
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