Construction and Manufacturing

7 Ways Small & Mid-sized Manufacturers Can Stay Competitive in Industry 4.0

The conversation around Industry 4.0 often focuses on the impact of data and the benefits of better decision making. What this overlooks is how dependent Industry 4.0 is on new hardware, systems, and investments.

The potential of data to transform business is far-reaching, but that potential may seem limited to the very largest manufacturers — those able to spend huge sums on advanced technology and the staff required to manage it. For the small and mid-sized manufacturers who make up the bulk of the marketplace, Industry 4.0 may seem largely unaffordable and unattainable.

A recent survey of UK manufacturers underscores the disparity. Over 65% consider Industry 4.0 to be a significant opportunity, yet just 25% believe they understand the underlying issues, obstacles, and opportunities. Factories are eager to embrace new advancements but feel uncertain or ill-equipped to move forward.

Industry 4.0 is not an all-or-nothing proposition; manufacturers don’t have to choose between massive investment and missing out entirely. Small and mid-sized shops simply need to invest strategically while laying the groundwork for data-driven manufacturing. You can find your competitive edge in Industry 4.0 with the following strategies.

1. Set KPIs, Benchmarks, and Expectations

Start by setting measurable goals for bringing your organization into Industry 4.0. Identify where new or additional technology will have the biggest impact on your organization. You may want to focus on solving your biggest pain points, expanding your product line, or gaining better visibility over your supply chain. Ensure any investment goal for Industry 4.0 has a sound business case to back it up.

In order to monitor your goals, you need to be able to measure them. What does a successful Industry 4.0 initiative look like at your business? Success must be clearly defined and directly tied to benchmarks and key performance indicators (KPIs). Your KPIs should describe how much you improve and by when – e.g. a 10% reduction in downtime in 6 months. Your benchmarks should note where your organization stands now in relation to each KPI — e.g. currently, downtime accounts for 10 hours per month. Once you have clear KPIs to measure your goals and benchmarks to measure them against, you can project the scope of the project and track the results after it starts.

When setting KPIs and benchmarks, it’s equally important to set clear expectations — with yourself and across your leadership team. As you work to embrace Industry 4.0 it’s easy to get carried away with grand plans and ambitious agendas. Be realistic about what you can achieve, and in what timeframe. This will keep you from rushing into something your organization isn’t truly ready for.

2. Invest in Targeted Technologies

There is not a “low-tech” version of Industry 4.0. At some point, it requires newer and smarter technology, but that doesn’t mean you have to rebuild the factory from the ground up. Making smaller investments in targeted technologies is one way to approach Industry 4.0 on a budget.

For instance, investing in technologies that help you collect and manage data may not transform operations overnight — but these technologies do enable efficiency and productivity improvements across the board, and can give you a competitive edge sooner rather than later. More importantly, they are accessible and essential to have in place when you are ready to invest in new processes such as additive manufacturing, virtual reality, or IoT connected equipment.

3. Treat Security Like a Priority

Equipment breakdowns and power outages are still high on a manufacturer’s list of concerns, but Industry 4.0 brings one concern to the top for every manufacturer: cybersecurity. Smart factories produce reams of data that can be stolen and exploited. IoT-connected equipment can be hacked and manipulated. Whether you have connected IoT across your entire shop or you’re just stepping into Industry 4.0, you must treat cybersecurity as a priority.

Since Industry 4.0 is so tech-driven, it requires a closer alignment between your manufacturing operations and your IT department. Issues that factory workers may have previously left to IT – data management, data security etc. — are going to become critical for all staff to understand and monitor. Your production and operations teams must join forces with your IT staff to work on the shared-initiative that is Industry 4.0.

4. Manage Your Volumes of Data

One of the easiest ways to embrace Industry 4.0 is to begin collecting data. Even if you don’t have the capability for artificial intelligence or additive manufacturing yet, the data you gather forms the basis of the data that will guide your operations in the future.

Instead of simply letting your current data set, you can actually start using it now — even before you have any Industry 4.0 technology. With technologies like ERP solutions, you can organize vast amounts of data and leverage that data for predictive analytics. A system that helps you analyze your data in real-time and draw insights from it can help your business make data-driven decisions in the immediate future. Leveraging your data now to predict supply and demand, manage inventory, and assess the competitive landscape can make you even better prepared for the data-driven technologies to come as Industry 4.0 speeds forward.

5. Examine Available Talent

Over time, Industry 4.0 promises to reduce the manufacturing workforce as we know it today, but it will actually require bolstering the manufacturing workforce in other ways. Automation and highly-efficient processes may require less human input overall, but the input they do require likely doesn’t match exactly to the skills that exist in your workforce now.

Manufacturers will need technicians with high-tech skills and specialized education – if not intermediately, certainly down the road. Review your current workforce to identify training programs you can implement to bring your staff up to speed on Industry 4.0 skills and improve retention at your organization. You should also examine talent you may need to recruit and start building a pipeline now by getting involved in local high schools and colleges.

6. Shift Your Company Culture

Industry 4.0 isn’t defined by individual technologies. It’s defined by its manufacturing philosophy – one that says every process can be improved and integrated. Reaping the benefits of this philosophy requires embracing it from the top-down. You must make Industry 4.0 part of your organization’s culture at every level.

Getting buy-in from your executives will ensure that Industry 4.0 projects are funded and built into the overarching strategy for your business. Getting buy-in from your factory workers will ensure the new technology is used to its fullest potential and doesn’t create discontent among staff.

This is something you can start working on today. Communicate to everyone at your shop the importance of data-driven technologies, why they’re critical for the industry as a whole, and — most importantly — how they will improve each staff member’s job, from your purchasing department to your plant manager and each machine operator. Seek training opportunities that will educate your employees on the impact of Industry 4.0 advancements, best practices for implementing them, and the approach to integrating them into manufacturing operations.

7. Ask the Experts

Industry 4.0 represents a sea of change in manufacturing and it’s not surprising that many manufacturers feel overwhelmed trying to navigate it all. Working with an expert or consultant is an easy way to get up to speed and get the best information available, customized for the needs of your business. If you’re not sure how to get started with Industry 4.0, ask someone with experience.

Transforming your enterprise should be a marathon, not a sprint. As with any transformation that takes time to grow, it’s better to start sooner rather than later. In 2016 only 33% of manufacturers were highly digitized. By 2020 the total will be 72%. Embracing Industry 4.0 is quickly evolving from an advantage into something ubiquitous and necessary in order to compete in the current manufacturing landscape. No manufacturer can sit on the sidelines.

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Aaron Continelli, president of Cre8tive Technology and Design, started things small in 2005. What began as a one person consulting firm has now become a staff of 58 with three office locations. Specializing in ERP system sales and services, Cre8tive Technology and Design became an EPICOR Partner (Value Added Reseller) in 2007. Since then, Cre8tive Technology and Design has emerged as one of EPICOR’s ELITE and won the 2013 Americas Partner of the Year as the Top Revenue Producer.

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