Preparation is one of the most crucial steps for a successful digital transformation journey. It helps you identify the plant’s technological and organisational capabilities and pinpoints your loss drivers bottom-up, as well as engaging all key stakeholders that will drive hands-on transformation.
The saying that “Success is where preparation and opportunity meet” seems to fit perfectly in Prepare, the second step of the digital transformation journey*. Manufacturers often bypass or underestimate the importance of preparation. Hence, this step ensures the success of the digital transformation as it measures the technological and organisational capabilities, uncovers insights that pinpoint opportunities across all plant operational functions, helps scale similar needs among all plants, and benchmarks externally versus the industry and internally versus all plants, by engaging at the same time all the relevant transformation personas.
Undertaking an objective maturity assessment
The manufacturers who want to navigate the complexities of Industry 4.0 need a reliable methodology to compare the status of Industry 4.0 maturity as well as to identify the specific value creation opportunities.
The four steps of an objective maturity assessment are data collection, ranking, insight gathering, and indexing. To detail this further, by collecting key data points distributed across the ten Industry 4.0 dimensions, and comparing them to established industry benchmarks, it is possible to understand the level of relative maturity in a particular dimension at both a plant and enterprise level.
Valuing opportunity at scale
Understanding technology potential alone means nothing if we don’t relate it to the actual shop floor activities that happen on and around the lines.
Deploying an advanced Industry 4.0 loss-eliminating analysis is key to making value-driven interventions at scale in manufacturing operations. The analysis covers a broad spectrum of losses and provides manufacturers with the necessary data and insights to identify opportunities. The exercise can be replicated to track the progression of the operational losses through time to drive efficiency and reduce cost.
Gathering data from all shop floor functions is core to enable a clear bottom-up understanding of the value at stake and define the percentage of the conversion cost that could be potentially eliminated. Out of those data we then define the recoverable potential that our Industry 4.0 digital transformation plan will eliminate.
The Industry 4.0 Loss Analysis begins with data input across all operational functions of the plant. Different participants are assigned to collect their relevant data input. Specifically, 10 loss analysis sections across 7 functions of the plant map the entire operations’ losses and key financial figures.
In particular, the loss analysis takes place on three pillars: 1) production process level (including line efficiency losses, and operator effort losses), 2) key plant functions (including warehouse losses, quality losses, IT losses, EHS losses, and maintenance losses) and 3) finance data (including FTE breakdown, manufacturing costs and general information). This data is then aggregated and calibrated, and losses are reported on an annual basis.
The Prepare phase of the SmarterChains Industry 4.0 framework is the most crucial step as it helps stakeholders prepare for the journey ahead. Knowing what might happen is one thing, but the ability to contextualise outcomes in terms of potential value when things do occur is another.
Find below some useful tools to start your digital transformation journey:
- A top CPG manufacturer’s case study of the Prepare phase
- An Industry 4.0 Framework to Create Smart and Sustainable Factories
*Learn more about ‘Educate’ the first phase of the digital transformation journey here.
