Industry 4.0, a term originating in Germany, centers around automated processes (internal & external) that are integrated through continual data exchange between machines, applications and businesses. In theory, the results will be game-changing — the creation of “smart” factories and production lines, along with a transition from making just products to developing valuable services tied to those products.
This is a movement that’s been hyped for a number of years, yet many small & mid-sized manufacturers have been slow to embrace Industry 4.0. Why the hesitancy to adopt a new, integrated approach for managing manufacturing and supply networks? Technically, the components to deliver on the promise of this latest industrial revolution are largely in place. It’s the human element that has slowed adoption.
In survey after survey, manufacturing execs list the challenge of changing company culture as the number one blocker of Industry 4.0 progress. The next most common reason given is lack of a defined roadmap to achieve an Industry 4.0-like operating environment. These two go together. Without a clear strategy to articulate, execs realize (correctly) that employees will be reluctant to embrace substantive change. And, minus a digital transformation plan, finding and exciting new types of talent to help implement it will be very tough.
Empowerment + Sense Of Ownership = Employee Acceptance
Gaining employee buy-in to change can be difficult, especially when the change impacts what people do and how they do it. To overcome the human factor tied to Industry 4.0 adoption, consider doing the following:
- Make sure everyone affected by changes has a say – not just inside the company but also partners, customers and suppliers. People want to know what is happening and why. The more control they have over their future, the more cooperative and on board they will be.
- Allow employees the freedom to be creative, to examine existing processes and suggest better ways to do things.
- Develop internal champions who get behind the changes and encourage their peers to do the same. Ensure the spreading of enthusiasm isn’t only top-down. It needs to come from all ranks.
- Bring in a human factor specialist to assist with how to best structure a more digital organization.
Interoperability is at the heart of Industry 4.0. — the ability of systems to transact seamlessly with other systems. It should be central to all discussions about investing in new technology or redesigning processes. In most cases, avoiding proprietary systems that can lock you into a single-vendor strategy or require expensive customization should be the goal.
Other recommendations we have for progressing towards an Industry 4.0 environment:
- Think big, start small. Identify a simple use case that will produce the biggest impact for the least budget, such as moving an important administrative process off of paper.
- Confirm the project saves money and the automation benefit outweighs the cost. A key objective should be to build a team of believers that includes someone from senior management who will clear roadblocks.
- Assess your existing systems and processes to identify proprietary protocols as well as standard protocols that have open APIs. Developing an Industry 4.0 strategy around proprietary systems is far riskier than a standardized/open approach.
- Better organizing, managing and protecting critical data is a must for success. Get people who specialize in these areas involved from the start.
With many manufacturing owners nearing retirement, making digital transformation an important component of succession planning shouldn’t be overlooked. The traditional manufacturing model is changing and will change more rapidly in the next 5-10 years. Companies that now have an incumbent advantage will almost certainly confront non-traditional competitors whose strategy is disruption through technology.
Preparation for this disruption should be underway. It’s not like manufacturers will suddenly go out of business if they don’t take immediate advantage of Industry 4.0 technologies. That said, it will become increasingly difficult to compete with manufacturers that do. If Industry 4.0 does nothing else in the short-term other than force manufacturers to re-examine the way they do business, there’s still a lot of benefit that will come from that.