How manufacturers can make Industry 4.0 work for them

After a period of tentative recovery, UK manufacturing is once again plagued by uncertainty. Growth prospects recently hit a 13-month low. Tighter environmental legislation and the need to comply with an ever-widening array of regulation is piling on pressure. Export demand is adversely affected by the weak Eurozone and difficult conditions in emerging markets.

Customers are also becoming more demanding.  Driven by digital connectivity and consequently empowered by a growing market knowledge, they are increasingly sophisticated, expecting products and services to be developed and delivered more rapidly – and personalised to their specific preferences.

It’s becoming more difficult for manufacturers to keep tabs on this fast-paced, constantly-evolving environment and manage disparate customer and supplier bases in a globalised marketplace.

Add to this the constant pressure to improve market share and operating profits and the need to do things differently becomes paramount.

Rising costs of raw materials, fuel and energy – remain a challenge, particularly as it is often difficult for manufacturers to pass those costs onto customers.  This puts huge pressure on operating costs and the need to drive these down while maintaining quality is essential.

In our experience, the need to control overheads and streamline manufacturing processes is affecting large global manufacturers with premium brands just as it is smaller local players.

Against this backdrop, manufacturers urgently need to find ways to optimise their working processes; deliver operational efficiencies and make a positive impact on the bottom line. That’s the core challenge they face – and it’s a difficult and complex one.  Manufacturers of all sizes and types have limited resources to invest in improvement initiatives, so they need to decide where they focus and why.

Seeing the Full Picture

Making more effective use of data, both internal and external, is a good place to start. Most manufacturers could more effectively utilise the raft of data available from the shop floor, but few are doing anything proactive with it. Even fewer have made use of the myriad of external data sources they could be leveraging – from customer to competitor information and from weather details to engineering service records.

It is those manufacturing businesses that look to harness their data more effectively while also making more intelligent use of IT that are likely to be leaders in the sector over the next five to ten years.

There are two key principles which need to be kept in mind here – tighter integration to ensure effective use of the right data across the business, and having a holistic end-to-end view to realise benefits for the business as a whole.

It’s a viewpoint that is closely aligned with the Industry 4.0 initiative.  This initiative argues that the fourth industrial revolution, already under way, is essentially about the integration of intelligent cyber-physical systems communicating with machines and humans in real time on the factory floor and out in the real world. But beyond that, it is also about the broader connectivity of industrialised processes into the rest of the business.

This is key because where there is little integration, there is little visibility across the business of work in progress or of what is actually happening on the shop floor.  So, Industry 4.0 focuses on making manufacturing processes more agile and more responsive both to the needs of the business and to those of the wider market.

It asks the key questions: how do you make improvements to the manufacturing process and accelerate time to market; how do you manage change to products more efficiently and effectively and even how do you monitor and assess the performance of finished products?

Manufacturers across both discrete and process industries are still struggling to answer these questions. Information is often still captured on paper or in spreadsheets as part of what are frequently error-prone manual processes.

There is a lack of connectivity between systems which manage the product lifecycle, that control product design, that manage and control shop floor processes (MES and Scada), and with ERP and analytics solutions. The vision of Industry 4.0 may have started but it is nowhere near to being fully realised.

Positive Future Ahead

Yet despite this, the path forward for manufacturing businesses in this area is becoming increasingly clear. The evolution of Industry 4.0 is helping to define this and the benefits of integrated cyber-physical systems are tangible and can clearly be seen in companies that have started to adopt this approach.

But how do you introduce this type of change into organisations which have long established processes and ways of working?

The critical first step is in building a robust business case for change and for new investment based on the tangible benefits that integrating processes, machines, applications, people and plants across the manufacturing function and more widely across the enterprise, can bring.  To develop a business case, you have to understand the size of the opportunity and how it can be realised.

Understanding the size of the prize is about fully quantifying the benefits and opportunities available through the use of manufacturing operational management, product lifecycle and advanced analytics technology and their integration with the wider business.

With the deployment of our own manufacturing performance management operational intelligence systems, for example, we have seen increases in productivity on the shop floor in the order of 10-30%.  And much of this figure simply comes from being able to make better, more informed decisions based on the right shop floor information in real time. Again, this is all about effective use of data and using integration to achieve a holistic view.

This is not just a future vision. As Industry 4.0 gathers momentum, this kind of operating model is bringing real benefits to real businesses today. These productivity gains will drive down operational costs and improve profitability. Whether it means businesses can deliver more products for the same price or the same volume for less cost, it’s an approach that will drive agility and have a hugely positive impact on the bottom line.

The real gains come from looking at processes holistically. Often improvement initiatives consider operational processes in isolation when much more substantial benefits can be achieved when the whole process is considered end-to-end.  By taking this approach, you often uncover small changes which cost little to implement but bring huge benefits for the business as a whole. This increases confidence and helps change programmes gain momentum.

Every manufacturing company is focused on the pursuit of sustainable, effective and agile operations. Over the next five to ten years, the winners will be those who understand the value data and its integration across function, department, processes and people.

Only integration, when used in this way, can deliver the actionable intelligence needed for enterprise-wide collaboration and only integration can help support a holistic end-to-end view that delivers the reduced time-to-market and greater flexibility needed to satisfy customer demand.