In the second blog post within the “Tackling your Industry 4.0 challenges” series, Frank Piller, an award-winning professor of technology and world-renowned lean manufacturing expert, tackles two most common questions asked with regards to the Industry 4.0 value proposition. He talks you through how to address the investment case question asked by your boss and how to clarify your value proposition.
Clarifying your Industry 4.0 value proposition
One of the biggest misunderstandings of Industry 4.0 and digital transformation is their value proposition. The question I often get is ‘What metrics should I use to track the efficiency improvements following our investments?’ Most Industry 4.0 implementations start with those questions, in search of operational excellence, for instance, predictive maintenance or preventing plant downtime. Do not settle here.
You can use the argument of operational excellence for your investment case on digital technology you show to your boss. However, you should always have a second agenda driven by value added. I genuinely believe that the real value of Industry 4.0 will not come just from operational excellence but by connecting plants.
This way, we’re building an industrial data platform. We can learn from other factories, benchmarking to ensure all factories operate at a higher level. Thinking about added value with regards to differentiation and business models is vital with Industry 4.0 investment. You can read my article and watch a webinar on Industry 4.0 business models here.
Usually, you get requests from product and marketing to implement their strategy, but what I saw in some advanced factories is operations driving the strategy. By investing in more flexible machinery and agile planning capabilities, you can drive new levels of customisation, even the ultimate mass customisation.
Don’t ask yourself how you can save some money, but how can we drive a new business model for our company.
When faced with the question of uncertainty, think of your smart factory like you would about your smartphone, new possibilities open up the more you use it.
Tackling “Why should we invest now?” question for Industry 4.0
The question I get asked a lot by executives in manufacturing industries is ‘How do you justify the investment in Industry 4.0 technology?’ There seems to be a misconception that a company requires considerable investment to implement a smart factory successfully. The truth is, the data you already have is probably enough to start drawing meaningful insights, with the help of Artificial Intelligence (AI).
To challenge the misconception of investment in smart factories being significant, as an example, a footwear manufacturer in the UK has committed a mere £25,000 to make an entire factory smart. The key is to understand your goals and innovate around them, instead of implementing new technology for the sake of it.
There are three standard steps to implementing AI: development of AI strategy and roadmap, establishing AI capabilities and skills in your company and piloting, followed by scaling quickly. Success and value you’re going to generate by AI will depend on a good understanding and expectation of what the technology can deliver from the C-suite down. IBM recently published a white paper on how to successfully implement AI.
For example, at a car manufacturer through supervised learning techniques predictive models were developed that provided an early warning of failure based on different system messages and sensor readings that continuously streamed from the production line. It was used to prioritise maintenance and reduce both downtimes as well as false positives and unnecessary efforts.
Plug and Play Solutions
There are also plug and play solutions for sensors which you can put on top of the machines to provide a richer picture compared to what your traditional factory setup produces, especially if you supplement it with the existing data. Sensors and Internet of Things (IoT) technology monitor an asset’s condition, gathering readings such as temperature, humidity, pressure and location, and any abnormal readings create an alert.
Sensors as a Service
You can even use sensors as a service. Sensors as a service is the delivery of sensor data either on-demand or via a data stream. It uses existing infrastructure to offer real-time processed and analysed data. Sensing as a Service essentially enables more developers and organizations to create IoT devices without having to worry about all of the external details.
It’s key to remember that the core value of Industry 4.0 comes not from technical infrastructure, but from looking into the data you already have or into additional data, which isn’t too expensive to generate.
If you'd like to find out more about how to create a roadmap for implementing the factory of the future, attend our "Leading the Factory of the Future" Masterclass, run in association with BMW, Porsche and Siemens. Learn from true leaders how to digitise your operations.