Industry 4.0: It’s the future, but we’ve been there once before

Industry 4.0 will transform businesses even more than the internet has. But no one knows exactly how things will play out, so you need a dynamic strategy to thrive. Vice president at Hitachi Consulting, Jonathan Gray explains.

Although the general direction of Industry 4.0 is clear, the journey each company will have to take to get there is not.

Jonathan Gray, vice president, Hitachi Consulting.
Jonathan Gray, vice president, Hitachi Consulting.

We believe there are four fundamental themes you should immediately focus on.  These themes can be developed independently, but only when you combine them will you maximise their full potential and begin to realise the transformative effect of Industry 4.0.

1: Skills & Roles

As you begin your Industry 4.0 journey you should focus on the leaders of your organisation.

You need thinkers and doers who can apply critical thinking to new challenges, but who can also implement change rapidly and sustain it in the business.

It’s no longer about managing just for flexibility, it’s about embracing future disruptions and driving rapid change.

2: Big data analytics

You’re going to be collecting more and more data and new types of data, but in our experience benefitting from big data analytics requires quality data processes that ensure your systems provide usable data, and data that is truly accurate.

Hitachi Consulting believes there are four fundamental Industry 4.0 themes firms should focus on.
Hitachi Consulting believes there are four fundamental Industry 4.0 themes firms should focus on.

When correctly applied, big data analytics can give you a competitive advantage. You’ll need data scientists to analyse the huge amounts of data you’ll generate, and in ways you probably can’t even imagine today.

3: Information Technology

Most clients simply regard ERP as a basic business cost. You need it to run your complex business.

The interesting thing now is that those organisations that have invested heavily in creating common systems and applications have a head start in gaining real value from Industry 4.0.

The Industrial Internet of Things (IIoT) is connecting everything, everywhere. When you add in the big data capability, all that investment in time, money and effort will really start to pay off.

4: Industrial Technology

Industry 4.0 is the logical evolution of Lean and will help you realise its full potential. Lean manufacturing in Industry 4.0 will enable degrees of flexibility and visibility across the value chain that simply aren’t possible today.

Predictive production and pre-emptive maintenance will smooth everyone’s path. The autonomous manufacturing plant is coming and you will need to ensure that Lean concepts and thinking are firmly embedded in your business first to be able to build towards it.

Don’t try to advance on all fronts

The goal is to deliver maximum ROI, so you should focus on the areas where the majority of your technology investment is already in place:

  • Set the priorities of your 4.0 road map so that they are aligned to your operational priorities, your customer needs and your competitive advantage, not to technological readiness.
  • Understand what you can leverage from previous investment. You should start by thinking about what you have. Co-innovate with suppliers to share risk and reward.
  • Companies that generate the most short to mid-term value from Industry 4.0 will focus on clearly defining the problems and opportunities and tackle the challenge in bite size chunks, with clear ‘use cases.’
  • Your strategic road map needs to be dynamic and build agility into each phase. It’s about continuous hypothesis testing, tactical decision making and strategic alignment and readjusting your investment portfolio on an iterative basis.

The tipping point for Industry 4.0 has arrived

The rules of the game are changing fast. You’ve got to think differently and manage differently because you’re managing rapid change – and many of those changes are not even fully understood yet.

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