Activating Industry 4.0 Levers Requires Preparation along Four Dimensions

This is the fifth in a multi-part blog series that focuses on Industry 4.0 in the manufacturing industry.

Industry 4.0 is quickly changing the manufacturing industry landscape, and companies must be ready for it—or get left behind. In addition to activating those Industry 4.0 levers, companies must prepare the information flow upon which they draw in order to realize the full benefits of this revolution.

The following four recommendations from McKinsey & Company are aimed at better managing the digital thread to help companies get ready for operational improvements through Industry 4.0.

Manage, integrate and analyze data across sources and companies – To go from an analog factory to a digital thread, businesses must go beyond traditional boundaries of functions, production sites and companies. “To enable an information flow, disparate sources of data need to be integrated, from different applications both within and from outside the company,” says McKinsey. “For the short term, this might even imply that the integration needs to be carried out manually via Excel. For the long term, integrated systems with common standards should be implemented.”

Share outcomes across the value chain – To fully leverage the value of data along the entire digital thread, information needs to be shared outside the company’s walls—both with customers and suppliers. According to McKinsey, “This means that companies need to build structures to exchange and integrate information. Outcomes of analysis need to be shared as real-time feedback across the value chain—from design and production through service and end of life—to allow quick reactions and adaptations.”

Ensure integration with physical production assets – To map the physical lifecycle onto digital, manufacturers need to close the “digital gap” in production. They can do this by installing sensors and actuators across their production equipment. McKinsey says that “data captured at the shop floor forms the basis for Industry 4.0 levers such as predictive maintenance and real-time process optimization. While installing sensors/actuators is the first step, they need to be connected (also with the central systems) in a second step through secure wireless networks.”

Additionally, McKinsey also says “large industrial companies like auto manufacturers and steelmakers could already benefit from industrial automation, but we believe that Industry 4.0 will change the manufacturing process and resource allocation of small to medium-sized manufacturers significantly. Even though we have all the enablers to make Industry 4.0 feasible such as connectivity technology, affordable IoT hardware, standardized communication protocol, collecting meaningful data and analyzing for implications are still the biggest challenges to driving the impact from Industry 4.0.”

Rethink the design of classical production systems – To capture the full Industry 4.0 potential, companies need to increase the flexibility of production. This applies to both production lines and systems within a company and production networks across companies, and involves several stages of value add. “Employing dynamically programmable production technology in combination with increased flexibility of the machine itself (e.g., flexible grip hooks) has multiple benefits, among them are individualized customization, more dynamic allocation of resources/capacity, shorter changeover times and reduced production complexity with fewer constraints. This allows for faster, cheaper, easier and more diverse production processes,” says McKinsey.

Another driver to increase flexibility can be the decentralization of intelligence, e.g., with intelligent lots. “Further optimizing the production flow for highly complex manufacturing processes with high variability (e.g., in semiconductors) at a central level might become a mission impossible at some point. The next level of optimization may be delegating the process to smaller units (equipment, work pieces) by assigning a few simple rules to those units. The spatial decoupling of physical assets and their monitoring and steering also allows for more agility and flexibility,” reports McKinsey. “In cases of unplanned machine stops, for example, a quick remote analysis of the issue and potentially a remotely steered restart instead of physically walking to the machine can decrease the reaction time significantly. New forms of human-machine interaction can facilitate the interaction with complex systems (e.g., via visual interfaces on tablets instead of complex program codes) as well as with new intelligent machinery (e.g., where people and robots work at the same station within a production line).”

The Next Generation of Plant Models

Industry 4.0 will not make a big impact on current plants by improving operational effectiveness through new, disruptive technologies. It will also help manufacturers develop the next generation of plant models to address the evolution of demand.

McKinsey says there are three archetypes of next-generation plant models emerging, all drawing upon various Industry 4.0 value levers but each to a different extent and with a different emphasis depending on which demand segment and needs they address:

1. “Smart automated plants address the need for mass products at low cost and are fully automated, digitized and highly cost efficient. These plants produce large volumes and commodities.
2. “Customer-centric plants address trend markets. These are ultra responsive plants producing highly customized products at scale and affordable cost to address the trend towards mass personalization.
3. “E-plant in a box addresses niche and remote markets. This small-scale, low-capex, mobile plant is able to produce a limited range of products at a new location and can be set up quickly to address subscale niche and remote markets.”

Next Up

In the next blog in our series, we will look at the four new types of business models for manufacturers as a result of Industry 4.0’s impact.

Need more 4.0? You can LEARN ALL ABOUT the Industry 4.0 revolution and how MarkLogic is helping customers industrialize their data!

Also, check out previous blogs in this series:

What Is Industry 4.0 and What Does It Mean for Manufacturing?

Industry 4.0 and Challenges Manufacturers Face

How Disruptive Technologies Will Change Manufacturing

Digital Thread: Finding Inefficiencies Creates New Value Potential for Manufacturers