This is the first blog in a multi-part series entitled “How Digital Foundations are Enabling Industry 4.0 for Industrial Manufacturers.”
Ever hear the phrase “building a house on sand?” It’s precisely what happens when manufacturers attempt to transition into the fourth industrial revolution, or Industry 4.0, without the proper digital foundations in place. Digital foundations refer to the underlying technology infrastructure required to successfully undergo digital transformation. These include technologies such as ERP, financials software, CRM, eCommerce, integrations with third-party systems, data and analytics, and more. By establishing solid digital foundations (hint: more stable than sand), manufacturers will be able to take full advantage of industry-wide advancements such as reduced costs, improved delivery, and higher revenue. And, with a little luck, their house will still be standing for decades to come.
What is Industry 4.0?
According to McKinsey, Industry 4.0 is the next phase in the digitization of the manufacturing sector, driven by disruptive trends including the rise of data and connectivity, analytics, human-machine interaction, and improvements in robotics.
The Promise of Industry 4.0
“Industry 4.0 is not really a revolution. It’s more of an evolution.” – Christian Kubis
The promise of Industry 4.0 is pretty darn exciting. We’re talking increased automation, efficiency, and connectivity in manufacturing operations. But that’s just for starters. Here’s a comprehensive list of benefits your manufacturing business could glean from Industry 4.0:
Optimize operations and improve productivity in real time.
Reduce downtime and maintenance costs while creating recurring revenue streams and boosting customer experience with Maintenance-as-a-Service models.
Customization and Personalization
Produce customized and personalized products, at scale, for customers’ individual needs.
Improved Quality Control
Identify and prevent defects in real-time to improve product quality.
Enhanced Supply Chain Management
Gain end-to-end visibility of the supply chain with real-time monitoring and optimization through blockchain, digital twin for supply chain, and vendor collaboration.
Quickly adapt to changes in market conditions in real time, including dynamic pricing, agile financial planning, and flexible supply chains.
Monitor working conditions, alert workers to potential hazards, and automate safety-critical tasks with advanced sensors and data analysis.
Digital Foundation Challenges
“The loftier the building, the deeper must the foundation be laid.” – Thomas Kempis
We’re not going to lie, the implementation of Digital Foundations for Industry 4.0 can be, well, challenging. Legacy technical debt, where old infrastructure and systems can slow down progress, is one of the most common and substantial hurdles. Your organization may also lack the necessary skillsets to upgrade and migrate to the cloud, which can be an obstacle for even the most well-established market leaders. In fact, Gartner highlighted this very issue in a recent press release pointing out that talent shortages are the biggest barrier to emerging technologies adoption. Moreover, training your people to operate and maintain new systems can be a complex and never-ending undertaking. Companies must factor in these additional costs while investing in technologies that provide long-term value, such as open-source software. Additionally, keeping pace with evolving technology, particularly in the cloud, is a tall order. Staff may not have the latest and greatest technical knowledge, thereby slowing down adoption. Finally, the challenge of having the right integration and data architecture is crucial. Legacy tech creates data silos that don’t interconnect, making it challenging to derive insights from analytics. Therefore, organizations must address these challenges if they want to construct and maintain robust Digital Foundations for Industry 4.0.
Strategies to Overcome Digital Foundation Challenges
“Before anything else, preparation is the key to success.” – Alexander Graham Bell
So, yes, we’ve established that laying the proper Digital Foundations within your business comes with potential pitfalls. But it’s not all doom and gloom. Fortunately, there are many strategies you can employ to fully prepare for the Industry 4.0 sea change. Businesses can make use of existing technology wherever possible, including infrastructure, hardware, and software. By reusing existing systems and devices, companies can deploy new technologies and reduce costs associated with procurement and installation. Another proven strategy is leveraging cloud computing solutions (while being mindful of staff training needs), which allow manufacturers to implement digital foundations—without setting up physical servers or data centers—and reduce overhead.
Companies can also customize a strategy that aligns with their unique needs and objectives, with the support of a partner like Argano. Argano’s unique approach focuses on building strong digital foundations that enable commercial innovation and drive sustainable growth and operational effectiveness. With services that deliver outcomes with a collaborative tech-enabled approach and a team of experts focused on specific capabilities and industries, Argano provides access to AI-driven insights and expert knowledge across various operational value chains, industries, and technologies. By adopting these strategies, companies can effectively overcome the challenges of implementing Digital Foundations for Industry 4.0 and achieve better business outcomes, faster.
When it comes to fully realizing the benefits of Industry 4.0 for industrial manufacturers, quality Digital Foundations are key. The challenges of implementing an Industry 4.0 infrastructure are significant, but organizations can overcome them through the adoption of a customized strategy, leveraging existing technology, and cloud computing solutions. Argano has been instrumental in helping countless industrial manufacturing organizations get their digital foundations ready for Industry 4.0. To dive deeper into digital foundations strategy, read this article by Argano CEO Chip Register.