With Industry 4.0 becoming mainstream, manufacturers around the world are getting jittery. While Industry 4.0 offers a multitude of opportunities to increase competitiveness and drive value, many manufacturers are not sure whether they can afford it, are ready for it, or what benefits they can reap from it. Limited knowledge of Industry 4.0 and how it can be leveraged for business transformation is a big hurdle that comes in the way of widespread adoption.
Considering this uncertainty, listed below are answers to 5 most commonly asked questions which we hear during our interactions with manufacturers about Industry 4.0 adoption, implementation, and ROI:
1. We have been asked to implement Industry 4.0 in our factory, but don’t know where to start?
Start by conducting an in-depth analysis of your current status vis-à-vis your business goals. Then, look at areas of your manufacturing setup that you think will benefit the most from smart manufacturing. Capitalize on the results you achieve, and then go for a phase-wise implementation. Such an approach will not only allow you to clearly assess the opportunities (and challenges) you face, but will also help you spread costs over time and maximize ROI in the long run.
2. We have a lot of old machines that work efficiently and don’t want to get rid of them. Is it still possible to attempt a “smart” manufacturing model?
The short answer is yes!
It’s a myth that adoption of industry-4 means getting rid of legacy machines. Almost every manufacturer has legacy machines, and Industry-4 systems have to integrate with these. Industry 4.0 works on the concept of interoperability – if your current infrastructure is capable of communicating with existing and new systems, you can reap all the benefits from the smart manufacturing setup. So, it is very important for business leaders to demand this from solution providers and include legacy machines in smart manufacturing initiatives.
3. How can we assess our preparedness for implementing Industry 4.0?
There are some crucial things to keep in mind with respect to the products you manufacture, the operations you run, your supply chain as well as your overall business strategy
- Are your existing machines or systems customizable or up-gradable?
- Do you use the cloud to run your operations?
- Have you implemented IT security solutions across key areas of your manufacturing setup?
- Do you have plans to make your current processes compliant with required industry regulations?
- Are your business metrics indicative of your production process efficiency?
- Is your leadership supportive of the Industry 4.0 initiative?
- Are your employees ready for the transformation?
Are different departments open to enterprise-wide collaboration to drive improvements?If your current manufacturing setup meets these criteria, there is no reason why you should delay the implementation any further. However, if it doesn’t, it might be worthwhile to first identify areas for action. After all, when you invest so much in an initiative, you should be able to achieve the benefits you deserve.
4. Will adoption of Industry 4.0 impact morale on shop floor?
Although Industry 4.0 opens up a world of possibilities for improved efficiency, the transformation doesn’t happen without challenges. The adoption is often met with some resistance from employees.
The truth is, Industry 4.0 is only a means to supplement the human workforce; it will in no way replace or take away human jobs, it will only help them perform better.
5. How do we calculate benefits from intangible returns from the system?
As smart manufacturing takes over the shop floor, one major worry manufacturers have is calculating the ROI, mainly because tangible benefits are difficult to quantify. The ROI of any smart manufacturing initiative should be measured in terms of productivity improvements, additional revenue generation or cost savings achieved from reduced downtime, just-in-time maintenance. Please remember the system will show you the mirror and it is up to your people to undertake improvement initiatives.
- Start by defining a measurement metric
- Once the implementation is complete, baseline current status in the metric
- Closely monitor the metric thereafter and review with concerned people
- Assess if you are able to generate additional revenue post-implementation – either in terms of reduced waste or acquisition of new customers.
- See if there is a considerable improvement in the productivity and efficiency of your employees.
- Determine if you are able to save additional costs – either by running maintenance activities more efficiently or troubleshooting issues before they cause any interruption in production.
- And lastly, see if you are able to improve production speed and efficiency and drive value faster.
It’s exciting time to invest in Industry 4.0
While it is widely believed that Industry 4.0 makes more sense for large enterprises who have the capital and resources required for an end-to-end implementation, in reality, it can benefit every manufacturing setup – irrespective of how big or small they are.
My sincere thanks to Dr. Arvind Tilak, Mrs. Sujata Tilak and Mr. Umesh Chavan for providing their insights for this post.