Industry is witnessing a radical shift in how the manufacturing sector works with Industry 4.0. Implementation of digital technology is the driving factor of this change. The transformation of the manufacturing industry, with the help of digital technologies, is popularly dubbed as digital transformation. The major technologies involved in the digitization of the manufacturing sector are:

• Internet of Things (IoT)
• 5G/WiFi 6E connectivity
• Cloud computing
• Industrial edge technology
• Big data analytics

Embrace digitization

You might think it would be better to watch on the sidelines to see how this change will play out. Then, once the industry matures, adopt digitization – this is a flawed approach. By the time the digitization trend matures, businesses that have not transformed their systems and processes will be wiped out. To avoid such drastic consequences, you have to proactively adopt the digitization of your plant operations.

The benefits of digitization are innumerable. Some of the key benefits you can expect are:

• Increased efficiency
• Decreased cost
• Quality improvement
• Improvement in turnaround time (TAT)
• Efficient inventory management
• Process improvement with analytics
• Dynamic production abilities

With these benefits, you will be able to supply goods to your consumers at a lower price with an overall better product. If you do not adopt digitization, your competitors will. Eventually, you will be priced out of the market by superior products at better prices. To stave off such an eventuality, you need to start thinking about and implementing digitization strategies as soon as possible.

How to digitize your operation?

Digitization of manufacturing is a step towards the long-term sustainability of your firm. It will have a significant impact on your business a decade down the line. Due to this, you cannot take a headless chicken approach towards digital transformation. Level-headed decisions with a long-term perspective are the only sensible way to move forward.

Cortizo, the European manufacturer of aluminum and PVC systems, builds systems for the architecture and manufacturing industries. Though they had some digital infrastructure, they had some challenges transforming to the modern industry paradigm. They had problems scaling digital systems with the rapid growth of the company. This also made collecting and processing large volumes of data a big challenge. In addition to these challenges, they also took it upon themselves to reduce business disruption with a smaller IT team.

First, they implemented IoT systems for machine monitoring and data collection. Once those systems were in place, they invested in digital infrastructure to process large amounts of data. This includes cloud infrastructure from Oracle and VMware. They also invested in UFFO storage for high-speed data transfer. All of this coupled with advanced machine learning and AI tools, powered analytics on cloud infrastructure. They also had the systems in place to realize the findings from analytics. All this combined, reduced latency in decision-making by roughly 90%. The step-by-step strategic implementation helped them achieve impressive performance improvement and cost savings.

Strategy

You have to take cautious strategic steps towards digitization. The first exercise to do is to clarify the end goals of digitization. The expectations of your firm have to be penned down in black and white. You have to take stock of the current resources and capabilities of the firm. Once a detailed evaluation of expectations and current capabilities is done, you have to create a road map for digitization. This road map should include the technologies, time frame, cost of implementation, and metrics to test successful implementation. Cortizo was able to implement their systems in the right sequence because of strategic evaluation. This gave priority to different technologies during their implementation.

Build digital capabilities

Factories in the existing paradigm run in silos. This will change with industry 4.0, it will bring cross-functional capabilities to one large interconnected system. This will range from supply chain management to customer feedback, which is only possible by a robust digital infrastructure. You have to acquire or develop the necessary digital capabilities before full-fledged implementation of digitization.

One aspect of gaining digital capability is having digital talent. Without a range of employees well-versed in technology, digital transformation efforts will not take flight. The other aspect is setting up digital governance. The existing governing structures of firms do not work with digital infrastructure. This has to be broken and remolded for a smooth transition to a digital native existence. Organizational structure also has to be reshaped to facilitate cross-functional integration.

Employee participation

The need for employee participation in change management is well-researched and documented. Digitization brings about a radical change in the way plants operate. Without the cooperation of employees, implementation becomes an insurmountable task. Raise employee confidence by addressing their concerns and doubts and transform them into active partners in digitization.

United States Navy decided to implement ERP systems towards the fag end of the last century. Top names in the space such as SAP, IBM, and Lloyd were supposed to be system integrators. As with government projects, the decision-making happened top-down. The employees that had to use the systems were not consulted in the process – this meant that top-level officials were unaware of the nuances that had to be considered during implementation. Decades after implementation started, the project is not yet complete. The navy also lost $ 1 billion in the process. More than 90,000 employees are also stuck with systems they cannot use. To avoid such a scenario, you have to take a bottom-up approach starting with the employees at the lower level.

Implementation

Implementation has to be done only after necessary digital capabilities are in place and employee participation is confirmed. Staggered implementation is the best way forward. Start with the digitization of one section or department. Then, assess how that performs compared to expectations. Fix any errors, if identified. Then move on to the next piece of the puzzle taking lessons from errors in the previous steps.

Gruppo Castelli is a large-scale cheese manufacturer in Italy. They wanted to digitize their functions to ensure business continuity – this ranged from PLC operations in their factories to customer feedback. At first, they transformed their industrial operations to suit digitization. Once that was successful, they moved on to the supply chain. After covering other functions of their business, sales and marketing were integrated with the rest of the digital infrastructure. This staggered approach took a relatively longer time frame, but avoided serious business disruption and implementation failure was limited to only a small function of the company.

Data management

Data is critical to the Industry 4.0 paradigm. There are many strategies for storing, managing, and processing data – it can be stored in data lakes, data warehouses, in the cloud, or on-premises. Data have different priorities and differing levels of sensitivity. Categorize data factoring in the security, access, and privacy needs of the organization.

Cybersecurity

Colonial pipeline hack in 2021 made clear the need for cybersecurity in industrial systems. Hackers held the operations of the pipeline hostage for ransom. The critical infrastructure of the country was compromised due to a lack of focus on cybersecurity. You could also face such challenges if cybersecurity is considered an afterthought. Cybersecurity risks have to be addressed from the strategizing phase. You should only take on vendors who give a very high priority to cybersecurity.

Advance with a digital arsenal

It is obvious that you will not be able to survive the coming decade without building a strong digital infrastructure to support manufacturing operations. Employee participation and cross-functional collaboration are critical in digitization with industry 4.0. Take sensible small strides towards digitization than long leaps. This is a more sustainable approach to digitizing your plant operations with Industry 4.0 technologies.

Bryan Christiansen is the founder and CEO of Limble CMMS