Industry 4.0 or IIoT has attained magnanimous proportions in business considerations, particularly in the context of the industrial and manufacturing sectors. Coined almost a decade ago to mark the emergence of the fourth industrial revolution, Industry 4.0 is the combination of technologies and innovative trends that lays out the path to remodel the future. It is a framework that affects a transformation from isolated manufacturing activities to fully integrated product and data flows within global value chains.
To enable companies to make the most out of digitalisation, Industry 4.0 came into being – a holistic portfolio of software and automation solutions. It supports discrete and process industries to become faster, flexible, and efficient.
Manufacturing through Industry 4.0 has helped companies to leverage cutting-edge technologies to operate in areas that not long ago seemed impossible to achieve.
The Struggle To Reach Potential
Complete digital transformation involves scaling up production processes for an organisation to satisfy the fast-changing customer demands in their plants and factories, which can be a formidable challenge.
Many organisations are still unsure about how Industry 4.0 would impact their businesses while others struggle to find the right talent pool for the adoption of the technology for their unique use cases.
The inability to achieve the desired success is acting as a bit of a dampener to the Industry 4.0 movement. As a whole, the manufacturing industry remains quite traditional in its approach. Being able to see the benefits of new technologies, and the return on investment (ROI) at even the earliest stages of implementation, is imperative to scaling digital transformation effectively.
According to recent research released at the ARC Advisory Industry 4.0 Forum involving 172 prominent Industry 4.0 practitioners capturing their approach to digital transformation and adoption of Industry 4.0, revealed that one of the toughest hurdles to overcome implementation of any technology process is unlocking real business value. According to the survey, while trying to scale the adoption of Industry 4.0, 52% of practitioners found difficulty in delivering ROI considerations. Moreover, organisations are also finding it a challenge to scale effectively.
The survey further reveals that only 9% of Industry 4.0 practitioners are either scaling digital at an enterprise level or have achieved full-scale digitisation at the plan level. There are multiple factors behind this – ranging from finding the right skill sets, high Capex investment, providing visible ROI, fewer benchmarks to measure success, resourcing, time, lack of in-house expertise, little investment, and poor connectivity.
Key Considerations In Adopting IIoT
To complete this journey towards smooth transition to fully unlock the potential that Industry 4.0 presents to us, the approach is of utmost importance to avoid any struggle. Moreover, with change being constant, the first generation of IIoT systems need to be replaced by an advanced version that encompasses the following:
- Introducing a human-centric approach: The research conducted by ARC Advisory Group highlights ‘lack of a people-centric strategy in digital manufacturing’ as one of the main reasons behind the struggle to scale the adoption of Industry 4.0 technologies such as AI, blockchain, and autonomous systems. The impact of technologies like cloud computing, big data, virtual reality, artificial intelligence (AI) and machine learning (ML) is already visible in many workplaces. They are fundamentally altering the nature of the workforce of the future. Getting employee buy-in is going to be critical for any organisation that plans to adopt Industry 4.0 in a big way and cultural transformation will be the key to making it happen.
- Distinguishing clear outcomes for those impacted: Making sure the outcomes are clear and that all of those who will be impacted are aware of the benefits, what technological elements will come in, and how it will change the ways of working, will be essential to secure everyone’s buy-in. That can be achieved by setting the tone from the top and engaging in open discussions with employees to address their questions and concerns about the impact of these technologies on their jobs.
- Removing the problem of failure to scale and achieving ROI: Successful deployments of the Industrial Internet of Things (IIoT) in various use case scenarios can be used to showcase ROI during the various phases of the digitisation process that an organisation undergoes while moving towards adopting Industry 4.0.
- The Synergy between engineering (OT) and IT to get the most out of any investment: The research also found that 64% of respondents said that the key challenge in running PLM systems in their company is the gap between IT and engineering departments. A third (32%) also cited multiple and non-aligned SLAs and KPIs, or a lack of domain skills as a key challenge.
For PLM to be an effective business tool, engineering and IT need to work together to get the most out of any investment. Only then can manufacturers achieve faster time-to-market, reduce product development costs and improve product quality.
Though the journey to complete digital transformation differs from one organisation to another, the right combination of cutting-edge technology and workforce engagement will ensure organisations are better placed for the near future. The eventual goal is to enable automated decision-making processes, track assets and processes in real time with minimal hurdles.
The Next Version Of IIoT
Addressing the above mentioned critical areas is what we call evolved or next level of approach to digitalisation. With technological innovation shaping the future of manufacturing, the time to act is now. Let’s look at each of these themes in a little more detail and try to understand how best they can be brought to life by organisations.
Companies who fail to embrace or keep up with the rapid digital transformation risk becoming irrelevant in today’s digital era — not just in terms of digital skills and capabilities but also in alignment with new processes and interfaces increasingly expected by customers today.
But embracing new technologies is not enough. For Industry 4.0 to be bigger and better than it already is, the gaps in its execution need to be addressed. Tools to help streamline projects, boost productivity and teamwork, and manage data in real time to build a sustainable, agile organisation in today’s business climate.
Achieving success in becoming an Industry 4.0 organisation is easier than it may seem to many who are daunted by the thought of implementing massive and disruptive changes across every level of an organisation. The advanced version of Industry 4.0 approach can act as a catalyst to bring about the changes in a gradual, non-intimidating manner, with its sharp focus on managing this change effectively through a series of small actions, which ultimately trigger the larger transformations at play here.
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Dr Keshab Panda is the Chief Executive Officer and Managing Director of L&T Technology Services. Dr Panda has over 31 years of global industry experience in research, conceptualizing, creating, operationalizing and turning around complex technology and engineering services businesses.