By Richard Howells and Alina Gross
Manufacturers’ interest in Industry 4.0 grew considerably last year, as executives leveraged digitalization to not only survive the epidemic, but also to position their companies for the coming economic rebound.
This was a major finding of the recent MPI 2021 Industry 4.0 Study.
But Industry 4.0 is more than just solving the short-term challenges associated with automation and employee safety during the pandemic. As a recent World Economic Forum article pointed out, companies that invest in Industry 4.0 have “solid foundations in place to adopt both short- and medium-term measures aimed at building resilience.”
Here are additional Industry 4.0 highlights from the MPI study:
Manufacturers expect a “significant impact” from Industry 4.0, but many are not there yet
Manufacturing leaders recognize the competitive advantages that Industry 4.0 brings as they strive to make their companies to become digital innovators.
92% of manufacturing executives report that Industry 4.0 is important or extremely important to their companies and two-thirds of executives indicate that Industry 4.0 will have “significant impact” on their industries and their businesses in the next five years — both numbers went up from a comparable study in 2020.
Also, 98% agree that Industry 4.0 is already (61%, or soon will be (37%) a competitive differentiator, but less than 1/3 consider their company a “Industry 4.0 leader”.
Industry 4.0 is most relevant in manufacturing, R&D and maintenance
While the use cases for Industry 4.0 vary across industries the most relevant were:
- Factory asset intelligence/Performance Management (45%)
- Quality sensing and detection (38%)
- Engineering collaboration/ digital twin (35%)
- Factory synchronization and dynamic scheduling (33%)
And when asked where Industry 4.0 data is best used for actionable, real time decision making, the tope roles were:
- R&D/product development (58% already using, and 27% plan to in the next 12 months)
- Supply Chain Management (57% already using, and 26% plan to in the next 12 months)
- Board of Directors (57% already using, and 24% plan to in the next 12 months)
- Maintenance (55% already using, and 28% plan to in the next 12 months)
Industry 4.0 leaders are seeing benefits in increased quality, productivity, and customer satisfaction while reducing costs
When implemented successfully, the benefits of Industry 4.0 are significant, with participants highlighting:
- Improved quality (56%)
- Increased production capacity (51%)
- Reduced operations cost (49%)
- Increased equipment productivity (46)
- Increased customer satisfaction (43%)
The WEF article showed impressive results from De’Longhi, including:
- Improvement of service level
- Reduction of the minimum order quantity down by 92 percent, from 200 to 16 pcs
- Reduction in lead time by 82 percent (from 28 days to five days)
- Labor productivity and assets utilization up by 31 percent
- Scraps and waste reduction down by 60 percent
- Warranty service call rate down by 33 percent
But there are still challenges and obstacles to overcome
Many companies are still struggling to meet the strategic objectives of Industry 4.0 initiatives. 41% of projects were completed later than expected, and 45% were over budget. One of the major failing sighted is “the failure of information technology (IT) and operation technology (OT) departments to collaborate”. Some of the major failings were:
- Resolving technical operations issues (55%)
- Upgrading legacy enterprise systems (52%)
- Upgrading legacy operations systems (42%)
The guidance moving forward
Manufacturing leaders have recognized the competitive advantages possible via Industry 4.0 and want their companies to be digital innovators. The need for improved planning, deployment strategies and execution of Industry 4.0 initiatives, and the upgrading of processes and network infrastructures is needed now to step up to their ideation and technology capabilities to guarantee success.
As the MPI study stated, with each passing day, the capacity to efficiently design and implement an Industry 4.0 strategy becomes increasingly essential. Manufacturers must digitalize today, as competitors are already using 4.0-enabled processes and products to improve operations, cut costs, and generate new revenues.
Manufacturing leaders who haven’t yet deployed an Industry 4.0 strategy must:
- Develop a strategy now.
- Establish a cross-functional Industry 4.0 team now to prioritize deployment vs. major weaknesses and opportunities.
- Embed Industry 4.0 as the digital core of the organization’s continuous improvement program, upgrading processes and technologies to remain competitive.
To learn more — and to benchmark your organization’s digital progress — download the full MPI 2021 Industry 4.0 Study here.