Sensing a Shift in Industry 4.0 Approach

Industry 4.0 has been a hot topic for years now, for good reason: 86 percent of manufacturing C-suites say digital transformation is a priority, and about 91 percent of industrial companies are investing in digital factories. Yet Industry 4.0 has also become a buzzword in many ways, as so many companies’ attempts to execute have fallen short. Only 6 percent of industrial companies believe their companies are fully digitized.  

This failure to execute is exacerbated by a misplaced all-or-nothing approach. Too much emphasis is placed on mammoth “full digitization” projects, rather than looking at digitization as a journey with options to crawl, walk, and run. Full digitization can be tempting because looking into the future to define, plan, and budget for the perfect solution is an exciting exercise that can bring the team together. It also aligns with how most technology partners market themselves as the feature-heavy “complete end-to-end vendor” for manufacturers.

These providers claim to deliver an average value potential of improving throughput by 10–30 percent. Digitizing a manufacturer’s variables according to precedent requires years of dedicated resources, allotted downtime, and intense capital expenditure. The engineering specialists, integration effort, and extensive onsite customization add up significantly, and timelines frequently drag on far longer than planned. According to Gartner, only 36 percent of manufacturing enterprises realize above-average business value from IT spending in digitalization at a reasonable cost when compared to peers.  

However, we’ve seen that rapid improvements in technology, especially for affordable sensors, can enable a “crawl, walk, run” approach that’s much more effective—with focus and speed as the keys to success.  

The costs of an all-or-nothing approach

First, when manufacturers approach digitization as all or nothing, teams often feel intense pressure to find the perfect solution with every bell and whistle they want for the next 30 years. They can end up spending years on expensive technology explorations that come with long timelines, hefty upfront costs, “pilot purgatory,” and complex integrations. Even once launched, the solutions may work reliably only on some machines and have so many features that adoption remains incomplete. These painful digitization efforts can cause team members, the most important element of any enterprise, to lose sight of the problem they were trying to solve in the first place. In today’s economic climate, these are exactly the types of projects likely to be postponed or canceled. Trying to do everything, teams end up doing little or nothing.  

Second, because technology is improving so rapidly, manufacturing teams that try to plan too far into the future will inevitably miss out on technology that could have provided the best solution if they had adopted a flexible approach. By the time a years-long project is completed, a newer, better solution has hit the market.  

Rather than all or nothing, we’ve seen that “crawl, walk, run” approaches are both more practical and successful—as well as affordable and accessible—for companies of all sizes. Recent developments in cloud-based technologies that continuously develop and improve how they translate sensor data into action can support this.  

In our experience, the top criteria that make the crawl, walk, run approach to digitization effective are focus and speed to results.     

The reason these criteria are important is that manufacturing faces such uncertainty today. A palpable tightening is occurring across every phase of the supply chain: macroeconomic unpredictability; inventory buildups; skills shortages; and impending environmental, social, and governance (ESG) regulations, among others, affect access to customers. Investors are more likely to force reactive behavior. Many teams must address issues as they occur, and as a result remain reactive and unable to prepare for problems ahead or capture the full potential of transformation efforts. These headwinds make it even more important to focus on time to results when evaluating system upgrades.

Focus  

Focus is the digitization criterion that drives results. A meticulously run plant floor isn’t easily obtained. There are many moving parts (literally), a constant stream of bottlenecks to address, and new goals to pivot toward. And although it’s inspiring to be sold a software package that will connect every element of your factory operations, this solution is often an overpromise. Instead, we see the most successful projects leverage the Pareto Principle, where 20 percent of causes drive roughly 80 percent of consequences. Focusing on one key metric first to drive the bottom line will align the entire team around improving that metric. Leaders then use the quantifiable results they achieve to layer on the next metric, but only after the team has used the new digital tool to achieve results. At that point, other opportunities and insights often emerge that can make the project’s next stage even more effective.

Speed  

The second criterion for successful projects is speed. Seeing fast results, even if small, galvanizes the entire team to lean into the project. This is where the increasing accessibility of sensors makes a big difference. Compared to the cost and time needed to connect to machine programmable logic controllers (PLCs), new FactoryOps solutions use sensors to digitize a plant in a matter of days. Current transformer (CT) sensors combined with FactoryOps software, for example, can be clipped on and provide visibility that same day. Often, they are affordable enough to pay for themselves within the first month.  

One company, for example, clipped CTs on machines and tied them into FactoryOps software to improve operability by 15 percent in less than three months. A second company used CTs and FactoryOps to measure and improve equipment use across its five plants. It saved tens of thousands of dollars by using open capacity on existing equipment to fulfill orders instead of buying new equipment. A third company, Bednark, was able to inform data-driven decisions that drove near-immediate payback for a FactoryOps system. And a fourth, RAPAC, saw benefits in a different but similarly important area by reducing scrap and making significant improvements in quality to quickly help their bottom line. 

Walk, don’t run

The simple, affordable combination of sensors and software enables teams to rapidly measure and drive critical metrics, such as overall equipment effectiveness (OEE). Teams can easily spot anomalies, microstops, and differences in changeover or process time, quickly deliver top- and bottom-line effects, and alert the right person at the right time to prioritize actions related to run times and OEE. This helps improve production time and eliminate firefighting. 

In sum, the most successful manufacturers don’t try to apply technology to solve every problem at once. Instead, they identify a meaningful opportunity for improvement and find a solution that can deliver fast results. Then they work to continuously improve and expand on it. Cloud-based technology that makes real-time sensor data both affordable and actionable is part of this process, and can enable teams to turn weaknesses into strengths.  

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