4 Tips for a Successful Industry 4.0 Initiative

Industry 4.0 and erp technology

We are living in the dawn of a new era. Whether you call it Industry 4.0, Industrial Internet of Things (IIoT), or Smart Manufacturing, there’s no denying that manufacturing is evolving at a pace never seen before.

With the dawn comes illumination, but not necessarily clarity. The breakneck speed with which companies are figuring out how to collect (and find value in) massive amounts of data, and integrate digital technologies such as industrial robotics, 3D printing, machine learning, OCR, cloud computing, augmented reality, and sensors, can make the Industry 4.0 revolution seem intimidating and enigmatic.

Yet, large volumes of meticulous research seem to indicate that this market will continue to grow at an exponential rate.

Clearly, forging a path paved by Industry 4.0 will be very profitable for those who get there first.

Large, global Fortune 500 manufacturers have been generating value from these digital technologies for years. Yet, it can be difficult for manufacturers who want to leverage new technologies but do not have the infrastructure or deep pockets to support them. Here are four tips that will help businesses of all sizes improve the success of their Industry 4.0 initiatives, and make it more likely that they will achieve their desired goals and objectives.

1 – Develop Your Team

Ideally, adapting Industry 4.0 technologies will affect the entire organization. These technologies can create new revenue streams, improve customer service, speed up the time to decision, increase manufacturing output, and increase sustainability. Accordingly, you need to identify key internal and external stakeholders, establish communication channels, and start building out plans to achieve agreed-upon business goals. While it is sometimes easy to identify internal resources, it is harder to identify external resources. You can always start with peers that have already gone through their own implementations.

Make sure to include your Enterprise Resource Planning (ERP) technology partner in this external group. In a majority of cases, they will be the hub of your digital transformation projects, as they touch so many groups and systems within your organization. This is a good time to evaluate your ERP partner and make sure that the partner and technology they use will work to achieve your goals. Ensure they have a roadmap that aligns with your Industry 4.0 initiatives and are able to prove their previous experience.  Ask if these initiatives are part of the standard product, or if a third party will need to be called in.

2 – Get Executive Buy-in

Getting executive buy-in and sponsorship is crucial to any Industry 4.0 initiative. Once you have defined your team (both internal and external) and worked out your goals and objectives, you can build out your business case. Make sure to qualify a return on investment (ROI), not just from a savings and efficiencies gained perspective, but also the value of identifying new and additional revenue opportunities. Industry 4.0 provides unique opportunities to increase service levels and improve customer satisfaction that can be monetized, in addition to higher quality levels and optimized production. With a combination of revenue and cost efficiencies, ROI will prove a compelling reason for the C-level to invest in the initiatives.

3 – Don’t Forget Workforce Training

The transition to Industry 4.0 requires change and the acquisition of new skills. These shifts will happen within discrete functions (such as on the shop floor) and across the entire organization — touching almost every department and function. While technology is a significant enabler of digital business, a Gartner survey found that organizations ranked a lack of skills and expertise as key inhibitors to fast adoption of these technologies.

This is where the external members of your team can be of tremendous help. They should be subject matter experts (SME) in their fields and your ERP partner should understand the vision of the smart factory and how to actualize it. Utilize them to identify skill gaps and whether it makes more sense to train in-house, hire new staff, or bring on a consultant.

4 – Start Small, but Remember the Big Picture

The best piece of advice I can give you is to break your Industry 4.0 initiative into small, manageable chunks. Hold on to the overall vision of the smart factory you know you can achieve, but take on a smaller piece of it. It might be an improvement in the number of defects from your production line by utilizing sensors, and then tying in that data with the production data in your ERP. It could be a creating an IoT device to be included with your product that can gather information, push it to the cloud, and then, utilizing big data and machine learning, improve your product or increase customer satisfaction. These examples are just the tip of the iceberg in terms of what can be accomplished and easily achieved by having the right technology partners in place.

While I have given you some ideas to help make your Industry 4.0 initiatives successful, one overarching theme is the importance of having the right team in place. Especially your external team—from your industrial equipment supplier, cloud provider, IoT or sensor device provider to your ERP partner, they should be able to communicate a vision of a smart factory that matches your own and has the technologies in place to accomplish this vision.

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