Note: this is the second post in our Industry 4.0 manufacturing series. Check out our first in the series: What is Industry 4.0? A Primer.

Manufacturers are under increasing pressure to provide better products and services around those products, at lower cost, faster, and with greater flexibility.

The technological forces driving this change are collectively referred to as “Industry 4.0.” We encourage readers to think of the term as a broad spectrum of tools available to achieve the competitive edge and profitability in the new manufacturing economy, and also as a term that implies “evolution” vice “revolution.”

Purpose of this post

We intend this to be a quick overview on barriers to and recommendations for initial Industry 4.0 implementation for small-to-midsize businesses (SMBs) without large investments of capital or time. Our Industry 4.0 series is geared towards those businesses (and specifically, manufacturers) looking to separate the wheat from the chaff in the vast array of Industry 4.0 resources. We find a sense of general clarity especially valuable considering the term “Industry 4.0” is nebulous in definition and highly unique in implementation.

Barriers to implementation

Adoption of Industry 4.0 principles is going slower than anticipated in manufacturing, especially within the SMB segment. Survey data shows barriers to adoption include confusion around key concepts, lack of implementation strategy, and concerns with implementation costs, change management initiatives, and perceptions around worker skillsets with new technologies and operational models.

With all the hype surrounding Industry 4.0, many incorrectly believe it to be an “all-or-nothing” implementation. A complete digital overhaul isn’t advisable or necessary, especially for businesses with resource constraints. Incremental implementation options are preferred and certainly available.

Recommended first steps

Disclaimer: there is no sweeping solution or “one size fits all” roadmap to preparing a business to become a factory of the future. Areas of focus for Industry 4.0 implementation depend on a manufacturer’s unique situation: availability of resources, desired areas to address, timeline, etc.

The below are high-level recommendations for those businesses, largely SMBs, wondering where to start when evaluating areas of digitalization with the highest potential return.

Step 1: adopt a unifying, software-based framework. While implementation strategies will vary by business size, sector, and situation, it is almost universally agreed upon that adoption of a fit-for-purpose cloud software system is the first step. There are many solutions available, each with its own tradeoff. We encourage businesses to conduct careful due diligence on selecting software that is “future-proof.” Legacy, costly, or rigid software will strain the foundation of the business’s Industry 4.0 strategy and quickly become a bottleneck.

Step 2: implement sensors and controls. Combining hardware (sensors) with software establishes the interconnectivity to collect large amounts of production and process data. It goes without saying that what isn’t measured can’t be continually improved.

Step 3: establish and optimize the feedback loop. With the hardware-software connections in place, businesses can use the collected data to measure, analyze, improve, and repeat. As a business incrementally improves processes based on the data, it can, in turn, tweak the hardware-software integration to improve the availability of data.

Step 4: use the feedback loop to decide what’s next. The availability of solutions in the Industry 4.0 toolkit is growing by the day. We recommend 1) using the optimized data from the above to identify key areas for investment and 2) evaluate the Industry 4.0 tool best fit for purpose.

Closing thoughts

It bears repeating that there is no sweeping implementation solution as each situation is unique. However, the businesses that will better survive, compete, and profit in the new digital manufacturing economy are those willing to take the leap. Incremental adoption is critical.

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