Smart technology is everywhere these days. You are probably surrounded by advanced consumer technology right now. For example, you may be reading this article on your smartphone, or perhaps you are wearing a smartwatch that’s monitoring your heart rate and other vital signs. You can hop in your car and ask your voice assistant for directions to the nearest gas station. Remote monitoring and control of your home is possible via wireless networks and Bluetooth devices. The examples are almost endless.
So, when consumers have embraced so much digital technology, why are manufacturers lagging behind? We will dive into the topic in this first article of our three-part series on the Digital Transformation Journey.
What is Digital Transformation (DX), and Why Should Manufacturers Care?
At its core, Industry 4.0 is a revolution that was born out of a combination of opportunity, technology, and a need to make manufacturing smarter, better, and able to meet increasing consumer demands in an increasingly global environment. “Industry 4.0” refers to the latest industrial revolution which focuses on the interconnectivity of machines and computers, automation, machine learning, and real-time data. This creates the “smart factory” where machines get smarter as they get access to more data, resulting in more efficient and productive factories.
As the principles of Kaizen and continuous improvement have become mainstream in manufacturing, organizations are always looking for new ways to better themselves. With smart technology becoming cheaper and more prevalent, it is inevitable that it will start to infiltrate manufacturing.
DX – the adoption and integration of new and advanced technologies into your business – allows an operation to become faster, more efficient, flexible, and ultimately more profitable. It does this by delivering the appropriate information to the right decision-makers, at the right time. With the proper information, intelligent decisions are made, and business profits.
Most companies that have at least partially implemented industry 4.0 concepts have seen the benefit. A survey found that among those who had begun their DX journey, 82% reported increased efficiency, 49% reported lower product defects, and 45% reported customer satisfaction gains. Not bad for a limited application of smart manufacturing.
As we have entered the fourth industrial revolution, the pace of change is faster than ever before. Manufacturers who cannot adapt are often left in the dust. The casualties are shocking. According to the Harvard Business Review, since 2000, 52% of companies in the Fortune 500 companies have either gone bankrupt, been acquired, or ceased to exist as a result of digital disruption. The longer you wait to start your digital journey, the further behind you will fall.
How to begin without getting overwhelmed
Despite the evidence of improvement with smart technology, manufacturing has lagged in implementation. Often the task seems overwhelming and the costs appear daunting. Overcome by the seemingly monumental change, businesses feel lost on how to start.
Perhaps the best way to begin your digital transformation journey is by starting small. Begin with a known pain point that could get you a “win” right away with sensors or automation. Keep the project scope small and well-defined. This way the risk is lower and the learning curve is gradual. You can gain an understanding from this pilot and build trust in the technology and with your employees.
After you get an initial implementation done, you will have a much better idea of what is needed for a successful DX strategy. You can use the learnings from your pilot to help build a roadmap for the wide-scale adoption of technology across your operation. This plan should be a “living” document and allow for flexibility. Manufacturing needs may change over time and you may want to adjust to being more responsive.
Get started and reap the rewards
There are several paths you can go down on your DX journey. Here are just some of the potential technologies that can help your business become more efficient and profitable.
This is a huge topic – and sometimes vaguely defined – but think about opportunities to automate repetitive tasks. Look where there are safety risks, where an error can be costly, or where automation simply increases efficiency in the operation. Automate tasks where humans don’t add much value so that their talents can be leveraged to create new opportunities for the organization.
With BI, you can leverage all your organization’s data, from the shop floor to the top floor, to make more strategic and informed decisions. BI can help you make sense of the data that various systems generate within your organization. You can optimize your operational efficiency by analyzing insights to better plan your inventory and easily manage your supply chain and logistics.
Unplanned equipment breakdowns cause chaos and rack up huge costs for businesses. By installing sensors to measure machine performance, you can start to predict when equipment will break down or require maintenance. With an accurate understanding of your machine health, you can take the time to plan for an outage and not scramble to adjust in a crisis.
A DX journey involving the integration of AI-enabled software means access to advanced analytics, made possible by machine learning algorithms harvesting, organizing and delivering key data points that may otherwise go unnoticed. Real-time, highly accurate data insights such as these can help you tailor products and supply chain management more efficiently. AI also helps to reduce inventory and forecasting costs by identifying seasonal patterns and annual trends. In addition, machine learning paired with AI can help you automate sales, with bots capable of assisting with segmentation and even providing customers with real-time resources.
Once you start to build datasets, machine learning (ML) algorithms can be built to serve your production needs. ML models can be built that incorporate large numbers of variables and situations. Once they are built, the machine can make intelligent decisions to keep processes most efficient and profitable. The ML era is just beginning, and we have just started to scratch the surface of this technology.
Smart technology has become commonplace in our lives, and its impact is being felt everywhere. Canadian manufacturers have been slower to embrace this type of technology, but the potential is enormous. There are all kinds of opportunities to improve your operation with Industry 4.0 methods. Select a small pilot that can improve your process and learn from the experience. As you become more familiar with the concepts and processes of your new technology, the picture will become clearer, and the benefits will start to roll in. As more operations become smarter, the slow adopters may get left behind—avoid this by formulating a DX plan. To get ahead of the curve and learn how to make a digital transformation plan, look out for the next part of this series, The Digital Transformation Journey: Part Two.