Industry 4.0 – Challenges in Smart Manufacturing

Manufacturing companies have historically followed the ‘Lean’ philosophy, which focuses on minimizing and eliminating waste or processes that do not add value. Lean has been the foundation for optimal operations and has encouraged growth by continuously connecting equipment, workflows, and people.

With technology overtaking the manufacturing sector, companies have shifted towards the Industry 4.0 philosophy, which is all about data. It involves the amalgamation of the physical and digital aspects of manufacturing and is supported by advanced tools like sensors, data analytics, and robotic automation. Industry 4.0 uses the Lean philosophy basics with data and technology at the forefront.

Manufacturers are Ready and Committed to Industry 4.0

The numbers overwhelmingly indicate that manufacturers want to embrace Industry 4.0 tools, with over 80% of CXOs preparing their workforce for it. Reports suggest that there is USD 3.7 billion to be gained by the industry overall and a potential 7-9% improvement in EBITDA for an individual firm. In fact, global manufacturing firms are annually investing USD 907 billion in digital transformation. However, less than a quarter of firms are ready to embrace this revolution fully. Why are they so uncertain?

Challenges in Smart Manufacturing

Despite being aware of the benefits, digital transformation at scale has not been adopted as widely as expected. Leaders are hesitant to make a drastic change.

Data Disconnect within Workflows

Manufacturing data is available at every touch point, whether it is related to a machine or a workflow. As complexities increase, the volume of data also increases tremendously. Unfortunately, this data is not integrated and identically accessible everywhere. The majority have not yet achieved the IT/OT integration end state.

Specialist Solutions over Customizable Generic BI

Thanks to the complexities that come with scale and expansion, manufacturers use digital solutions as a stopgap. These solve very specific problems and cannot be extended to other workflows on the shop floor. Adopting horizontal solutions with custom capabilities would be more expedient, but that requires a significant baseline investment.

Pilot Approach with a Low ROI

In theory, pilot projects seem very beneficial. When they are executed in a disconnected system, as outlined above, they will not deliver the desired results. Business priorities, strong use cases, and relevant performance metrics must be decided before starting a pilot. Failing to do so can be detrimental to the organization.

Lack of Knowledge, Skills, and Trust

Over 40% of manufacturers have adopted a pilot approach, and 30% are still considering such a pilot. This, coupled with the poor results from these pilots, brings about a lack of trust in all things digital. The gap in knowledge and skills also contributes to this slow adoption.

The Way Forward

Industry 4.0 has its own risks and challenges, but its opportunities cannot be overlooked. Leaders must incorporate an all-encompassing, data-centric approach and derive the most from the Industry 4.0 philosophy.

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