Industry 4.0 is a huge talking point in manufacturing these days. With the its greater data retrieval, improved flexibility through automation and increasing push by the world’s leading ERP software firms, it is no wonder that businesses are investing in this increasingly digital future.
In part 1 of our interview, Alan sets the groundwork for our industry 4.0 discussion by talking about the vast and drastic changes (often referred to as “industry disruptions”) are taking place in not only in our society but in field of manufacturing. He also discusses the importance of adaptability in this new digital landscape due to the massive amounts of overnight revolutions in technology currently taking place.
Jean: Today’s conversation is going to be regarding smart factories or as is commonly referred to in the industry – “Industry 4.0.”. Alan, what can you tell us about Industry 4.0?
Alan: So, just so that everybody knows, the topic of industry 4.0 is near and very dear to my heart. I am an industrial engineer by training, and I’ve been working with manufacturers of all shapes and sizes for nearly 40 years. The topic is the reason that I am so happy to be a part of D4M International.
Alan: Let’s talk about Industry 4.0. There’s a lot of changes in the manufacturing landscape be it supply chain disruption, autonomous vehicles coming into vogue, increasing movement to urban areas constantly changing customer demands, etc.
Alan: These changes are causing organizations to adapt in order to be competitive. Let’s narrow down our conversation to one area of manufacturing – the automotive industry. In order to be competitive, existing transportation brands have to experience a lot of transformation. New business models need to be created and they have to be enacted quickly, and organizations need to be nimble while doing so.
Alan: Organizations must have the adaptability of a brand-new startup, albeit one that’s much better funded. We see new technologies and new innovations at a pace that we are quite frankly unfamiliar with. And I envision a day soon when change will become very familiar to us and will become more the norm than the exception.
Alan: How we adapt and transform will be nothing like we saw 20 years ago. And it’ll be good. So, as manufacturers, we have to not only learn to be agile and nimble, but to change the enablers by leveraging data and new technologies to further support this paradigm shift in our way of doing business.
Alan: We hear a lot about “futureproofing” our businesses. How are we going to future-proof? We start by connecting and becoming a digital manufacturer. My little granddaughter says, “what are digitals?” Exactly, what is digital manufacturing?
Alan: In a nutshell, it’s just an integrated approach to manufacturing that is centered around real time access to data. The two key words here are “integrated” and “data”.
Jean: What are the strategic trends – in particular for manufacturing – that are driving companies to move toward an industry 4.0?
Alan: It’s a good question. We at D4M are focused on and actively engaged in helping companies to navigate into the digital economy.
Alan: There are a lot of forces in the digital economy that are driving a sometimes-significant disruption in a lot of industries. Disruption can cause shifts in a manufacturer’s ability to be able to deliver products and to manage their supply chain, especially with all of the supply chain issues that we’ve experienced over the last couple years. It is affecting manufacturer’s ability to be able to serve their customers in a traditional manner.
Alan: Let’s talk about some of those disruptions because those are key. Changes in consumer demand require more customization and personalization of products that they sell.
Alan: Maybe you don’t remember this, but I remember when I wanted to get a license plate for my Schwinn Fastback Stingray. Perhaps your mother thought it would be cute to spell your name with a Y instead of an I. Well, technology has made sure that is never a problem again, right?
Alan: Unlike when I was a kid, customized demand is a big disruption in the market today. Another one with smart manufacturing and connectivity on the rise, products themselves are changing from dumb to smart. And further, if you look at advanced manufacturing methods, they’re changing the economics of production not only with the intelligence/insights that are enabled by digital manufacturing, but by revolutionizing the whole value chain economic picture.
Alan: Manufacturing companies are also influenced by external factors and the global marketplace. Did the Suez Canal get closed down for the next two weeks? It complicates the supply chains and the costs. And beyond the influences of technology economics, social factors, political factors through those things manufacturers have learned to keep an eye out for some big bang disruptions.
Alan: Unanticipated innovations that make/moves competitors come around that will completely change the industry. Again, a prime example, electric vehicles are coming in as a big disruption. They’re coming as the norm, and it is a big disruption. There’s other strategic trends that affect manufacturers also, and that includes sourcing, digital sourcing, and both from the product perspective as well as the production perspective.
Alan: Augmented reality and virtual reality are expected across the entire model range. Again, pointing to the automotive industry, things like autonomous driving, is going to become the norm. Safety on the road is going to increase. Freedom, some say, will increase. The self-driving technology is being experimented all over the world and various regulations and other barriers are impeding the growth, but they will be solved.
Alan: As with anything that becomes digitalized and connected to the internet the threat to cybersecurity increases extensionally. We got to give it time and we got to continue to work on those, but that is coming. In the manufacturing realm the smart manufacturing and smart supply, again, pointing towards the automotive industry, not that it’s the only manufacturing industry, but the automotive sector is arguably at the heart of the speed and per personalization of products that industry 4.0 is revolutionizing and enabling.
Alan: In 1990, the plants were probably 25% automated. Today you’re looking at about 75% automation and you know that digitalization is dropping defect rates and its increasing outputs, so there’s a lot of benefit to it as well.
Alan: Another trend is predictive maintenance; in other words, making sure that your resources in the factory are not going down at inopportune times or in the creating a lot of unplanned maintenance that needs to occur. All of those things are widespread changes that, even when you don’t consider some of the other technologies, are having a huge impact on a lot of industries.
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