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Why should I care about Industry 4.0?

Jan. 11, 2019

And how do I get started?

We remember learning about “the” Industrial Revolution in school—the evolution from manual-labor to machine-based manufacturing. The larger theme was the transition from an economy that was primarily agrarian to industrialization. Division of labor and the assembly line, highlighted by Henry Ford, and coupled with technology advances including electricity, is recognized today as the second Industrial Revolution.

Many of us can recall when automation began showing up in factories. During the 1970’s and 80’s computerized devices were automating previously manual processes. We witnessed the deployment of technologies such as programmable logic controllers (PLC), numerical controls (NC) and robotics. We know this as the third Industrial Revolution.

SICK's Ron Stuver

Today, the discussion is focused on Industry 4.0 (I4.0), or the fourth Industrial Revolution. I4.0 is a phrase that has origins in Germany about a decade ago. And while the concept had been showing up at trade fairs and in trade magazine articles, I4.0 hasn’t had serious legs until the past couple years.

We’re starting to run now.

At the foundation of I4.0 are the themes of “data” and “connectivity.” To dispel a myth, I4.0 is not technology in and of itself, but rather, a concept of how automation can be better utilized to help companies achieve operational goals that are aligned with business strategies.

The I4.0 discussion within an enterprise should begin with the business strategy. Where is the company headed? Is top-line growth the priority, and is increased capacity to meet demand the focus for operations? Is the business focused on reducing costs to remain competitive in a market with tightening margins? And what about manufacturing flexibility? How is the company addressing new market pressures, such as the ability to meet customization demands?

Understanding these strategic objectives is vital to ensure that subsequent discussions of “how” to achieve these goals are…well…smart.

To achieve these business goals in this digital era, operations leadership (and specifically the manufacturing operations of a company) must identify digitalization projects that align with the business objectives. Examples include reducing risk and addressing compliance requirements, which align with operational projects that address track-and-trace solutions. To do this, secure connectivity of automation systems and the strategic movement of data are critical.

Now, there is no doubting the benefits of digital transformation—efficiencies that reduce manufacturing costs, reduce downtime, and prepare companies to be more agile and respond quickly to customer demands. So the question remains: why are so many companies still hesitant to initiate I4.0 projects?

The answers are varied.

Many large corporations have assembled internal enterprise-wide digital transformation teams, with a sub-committee focused on smart manufacturing. Value streams are identified and projects planned, but road bumps like identifying specific solutions or providing ROI justification cause delays. In some cases, the team lacks the specific expertise to complete the analysis for specific solutions.

Likewise, mid-size and smaller companies often lack the resources to allocate staff to a dedicated I4.0 team.

And thus, for any of these examples large or small, there is interest in finding a partner to help guide to appropriate solutions, prepare a roadmap, and support implementation.

Pursuing partnered I4.0 solutions should begin with a clear understanding of your business strategy. Stakeholders should develop a common understanding of how the company plans to grow, and what will drive business initiatives to overcome market challenges. This approach will ensure consensus and provide a common foundation when creating a roadmap with the appropriate partner to implement successful automation projects.

Ron Stuver is SICK’s manager of Industry 4.0 business consulting and customer advocacy.