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

Digitization and Industry 4.0 are opening up new cost savings for manufacturers that have to this point remained untapped. According to McKinsey, “It’s a paradigm shift from optimizing physical assets to optimizing how data and information are leveraged along the product lifecycle.

“This digital optimization builds on an end-to-end information flow—in short: a ‘digital thread’ running through the entire product lifecycle as its digital representation.” The digital thread:

  • Begins with the digital design of the product,
  • Goes through the digitally controlled manufacturing process,
  • Passes to the digital monitoring of the end-product in operation, and
  • Ends in the product’s recycling, where digitally stored information helps identify parts that can be reused.

Leveraging and sharing information across this digital thread allows for closer cohesion across the complete product lifecycle, even between steps where different stakeholders (e.g., suppliers or customers) are involved.

Making Better Use of Data for Better Value

Taking full advantage of the digital thread is about making the best use of information. “Industry 4.0 technologies are similar in that they offer ways of leveraging data to unlock its value potential, e.g., advanced analytics will turn information into outcomes that help decision-makers, 3D printing converts the digital construction data into a tangible work piece and predictive maintenance uses captured information to schedule the ideal maintenance times,” reports McKinsey. “A case example from the oil and gas industry shows that companies are currently losing up to 99 percent of their data through information leakages. After analyzing a mere 1 percent of the collected data, basically none of the results are used to drive decision-making.”

In order to identify and capture new opportunities, information needs to be actively managed along the digital thread to prevent those information leakages. Leakages in the digital thread are spots where potentially valuable stakeholder information gets lost somewhere in the value chain, causing inefficiency.

So how do we manage the digital thread to avoid such inefficiencies? According to McKinsey, the following are requirements for the creation of value from data:

  1. Information capturing and recording – In order to use data to capture opportunities, relevant information has to be collected and recorded. “Inefficiencies can only be eliminated if they are detected and documented, thus the physical production process needs to be mapped along the digital thread—based on the collection of real-time data in an automated way and with historical data points. This requires moving from selected, sampling-based measurements mostly for quality control purposes to a full coverage of the production process, using inline sensors and measurement devices to collect information for every single work piece.”
  2. Information transfer – Efficient information transfer is a requirement for preventing information leakages and losses along the digital thread. “Data collected at a specific point in the value chain might be most useful at a different point (either earlier or later) in that same value chain. To make information available at a specific point, it is crucial to share it across the value chain, for most advanced applications even in real time. Therefore, companies need to integrate disparate sources of data from different applications to create a holistic view of the end-to-end process. Also, the integration of data should not stop at the company border.”
  3. Information processing and synthesis – Getting insights into data requires complete processing of captured information. “Arriving at the right conclusion depends on both relying on a relevant causal relation between factors (e.g., derived from historical data points) and employing this insight to optimize the status quo. Optimization opportunities exist where either inter-relations are not obvious or where insights are not yet used for optimization.”
  4. Turning information into outcomes – The final step closes the loop from the digital realm back to reality by translating the findings from data analysis into recommendations and actions to take. “Many decision-making processes still require human involvement, while data analyses are often already automated and performed in real time. Therefore, opportunities are associated with speeding up and potentially (partially) automating these decisions, and triggering the required actions.”

(Note: For specific industry examples of the four items above, check out the full McKinsey report.)

Next Up

In the next blog in our series, we will look at how activating Industry 4.0 levers will require preparation along four dimensions.

Need more 4.0? You can LEARN ALL ABOUT 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

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