Manufacturers must be data driven and have a continuous improvement mindset to stay agile, innovate and deal with supply chain and other disruptions. The benefits of implementing Industry 4.0 technologies are clear, but many companies also face challenges. Your company must be ready for change. Download the Manufacturers' Guide to Industry 4.0 Technologies for step-by-step guidance.

First, management must be on board. Decision-makers need to be part of the team from the start. Your workplace culture must support innovation, with employees open to training and change. In addition, your company must have good processes already in place. Otherwise, you’ll simply speed up or automate bad processes.

Before implementing Industry 4.0 technologies, your company should consider:

Business practices.

Does your company focus on policies, processes, methods and rules in meeting company objectives? Are your operational procedures dependent on people? Are your business policies and processes well-documented? What about project, design or manufacturing plans – are those documented? Are you able to map your value stream (a representation of all activities required to produce a product)? Continuous improvement plays a critical role in implementing technology successfully – is it a focus at your company?

Enabling technologies.

While many manufacturers are just beginning their Industry 4.0 journey, some have already adopted technologies that support business operations and manage infrastructure. Is your company using sensors? Are you using technology to manage quality control? If so, you’ve already taken first steps that will smooth the way to further technology implementation.

Workforce development.

Employees play a critical role to the success of any technology implementation. Your workforce will need training so they have the skills to use new technology. Encourage them to share knowledge and best practices with each other – their soft skills like collaboration and communication will improve, as well. 

The systems and institutional knowledge that contribute to a company’s success can also make it difficult to change. Barriers can be seemingly small – like getting used to new reports in place of spreadsheets. Yet these small barriers can slow technology adoption down. Another issue can arise if employees view these technologies as a threat. For example, data provides detailed visibility of an organization’s weaknesses that employees may take personally.

It’s also important to identify technology providers that are a good fit for you and your company’s needs. For example, will the provider upload your historical data into the system? Be sure to have detailed conversations early in the process with any provider.

Building a Business Case

The business case for technology adoption frequently centers around ROI and payback. These are financial metrics of the success of an investment and can be used to compare competing investment opportunities. They’re useful metrics that require tangible, measurable benefits to compare against the total investment, as well as the investment period.

• Return on investment = Incremental gains / Total investment (expressed as %)
• Payback period = Total investment / Annual incremental gains (expressed as years / 12 months)
  
  

Identify the benefits.

In addition to tangible and financial benefits, a business case should also attempt to include intangible benefits of Industry 4.0 technology that could be challenging to measure. In the written portions of a business case, these can provide context and link implementation benefits to company strategy. Benefits to technology adoption include:

Investment components. 

Your potential investment in Industry 4.0 technology is more than just the hardware. It’s easy to overlook associated costs, especially as the technologies themselves become cheaper. Make sure you consider all applicable costs when evaluating a technology investment. These include:

Integration: 

• Design engineering
• Installation
• Testing
• Ongoing support
• Additional programming needs

Internal costs: 

• Technical and production team time (installation, test/acceptance trials)
• Training
• Loss of production revenue during installation and ramp up
• Hiring of additional technical personnel
• Finance costs

What’s your goal for the technology? As part of the justification for the investment, you should determine what success will look like. How will it be measured? Improvement efforts sometimes fail in the long run because goals weren’t clearly defined from the beginning. Your goal may be implementing your first collaborative robot. Or it may be getting data off one machine.

Whatever it is, it should be plainly stated at the outset. If your goal involves moving a metric, then it’s important to have a validated way to measure the before and after periods. Put all of this in your business case.

Preparing Your Employees for Industry 4.0

Preparing Your Employees for Industry 4.0 Change is scary for many people, especially in their work environment. When a company decides to implement new technology, employees might worry how it will impact them. How much of their job will change? Are they in danger of losing their job? Will they have to learn how to use the technology? There are ways to prepare your employees to embrace new technologies.

Include and empower your employees early.

Employees should be included from the earliest stage of your Industry 4.0 journey. Front line workers and managers are responsible for performing the work. They have an important perspective and can provide a wealth of information about which processes work well, where bottlenecks exist, and where there are areas for improvement.

Their early involvement ensures that the new, automated process builds on the success of the older, manual process, while improving deficiencies. Small details like occasional process inconsistencies can throw a big wrench in an Industry 4.0 project. The team members who were in charge of the manual process will help head those issues off at the pass.

Get ahead of employee anxiety.

When employees are involved in the process, they are more open to change. They’ll better understand why change is needed and how it will help them (and the company) improve. It’s important to tell your employees that the new technology won’t replace them, but that it may change the nature of their work. According to a WEF report, “Fewer than 5% of occupations consist of activities that are 100% automatable with today’s technology, while 62% of occupations have at least 30% of automatable tasks.”

Engage employees with skills development.

Gallop’s “State of the American Workplace” reports that only 25% of manufacturing employees feel engaged. Giving your workers opportunities to learn new skills will help them become more engaged. The Society for Human Resource Management believes that investing in employees can set you up for success and ultimately save you money. Developing a strong employee development program that grows their skills will help build loyalty – and help you retain your best workers.

Identify an Industry 4.0 champion at your company.

Implementation is just the first step. The work really begins when your team starts using the new technology. To ensure rapid ROI and ongoing success, identify an in-house champion who will work alongside the implementation team and learn the system. Make sure this person has cross-departmental authority and can broker engineering and production cooperation, which will be critical to long-term success.

Let go of old processes.

Introducing a new technology into your facility is a big change. There are lots of variables to any project of any scale. Don’t complicate the situation by keeping the old process in place. Old and new processes running in tandem don’t work. For example, if you purchase a new ERP system to manage your production schedule, then get rid of the old production schedule spreadsheet. Spend time up front inputting data and preparing so you only use the new system moving forward.

Embrace a new mindset.

Adopting Industry 4.0 technologies requires a new mindset. These technologies don’t simply improve an existing process. They create a completely new process. This can be intimidating for employees at all levels, but your project’s success requires that they all buy into this new mindset.

We Can Help You on Your Industry 4.0 Journey

Impact Washington and our Industry 4.0 resource partners provide unbiased recommendations for applying advanced manufacturing technology to improve your operation. We will work with you to understand your unique needs, identify opportunities where technology will have an impact, and propose solutions that are right for your business.

Our experts:

• Start by assessing your company’s current situation
• Identify opportunities and help you prioritize processes where technology solves problems or generates the greatest benefit
• Help you develop a business case
• Implement solutions
• Rigorously measure results

Learn more about our Industry 4.0 services and see how we can help you.