Industry 4.0 and digitalisation are the key words regarding manufacturing and supply chain evolution. An increasingly number of companies is allocating an important part of their budgets to Industry 4.0 related projects. Each manufacturing plant, regardless of the sector, knows that something shall be done on this topic and the management is daily pushed to identify improvement rooms to invest on.
But what’s the meaning of “Industry 4.0” and what does it include?
All the technical changes in information, processing, data collection, logistic co-ordination, Virtual Reality, Machine Learning, Artificial Intelligence (AI), Internet of Things (IoT) and Additive Manufacturing combine to modify the way that entire industries interact with each other and the way they deploy and manage resources. In 2015 the term Industry 4.0 was first used in DAVOS to describe the start of a new industrial revolution and our role in it. This revolution will redefine industry into a new model over the coming decades. It is predicted that this will be as profound as the three industrial revolutions that preceded it, including: the shift from agriculture to industrialization; the progression from the artisan producer to the organized factories; and the shift from hierarchical co-ordination of workers via paper memo to computerization. The manufacturing sites of the future will leverage advanced technologies across all functions. The most interesting trends are:
Digitalisation and shared “Big data”
The classic supply chain is a series of largely discrete and solid steps taken through marketing, product development, manufacturing and distribution and finally into the hands of the customer. Thanks to digitalisation the chain becomes an integrated ecosystem that is fully transparent to all the players involved — from the suppliers of raw materials, components and parts, to the transporters of those supplies and finished goods, and finally to the customers. This ecosystem will depend on a number of key technologies such as: integrated planning and execution systems, logistics visibility, autonomous logistics, smart procurement and warehousing, etc., generating optimisation and insights through advanced analytics.
Machine learning and Artificial Intelligence (AI)
Access to stores of large amounts of accurate historical and real-time data enables the training of automatic algorithms that learn to recognise opportunities for optimisation that can be overlooked by humans and enable automated responses to situations based on predicted outcomes. This may be employed to optimise sourcing, transportation, stock-levels and pricing decisions as well as to predict future demand patterns.
Additive Manufacturing (AM)
It describes the technologies that build 3D objects by adding layer-upon-layer of material. AM encompasses many technologies, including subsets like 3D Printing, Rapid Prototyping (RP), Direct Digital Manufacturing (DDM), layered manufacturing and additive fabrication. AM application is limitless. Early use of AM in the form of Rapid Prototyping focused on pre-production visualization models. More recently, AM is being used to obtain end-use products in aircraft, dental restorations, medical implants, automobiles, and even fashion products.
Internet of Things (IoT)
Real-time information sensed about the physical world is becoming increasingly common. Temperature, pressure, vibration and atmospheric conditions can all affect performance and, over time, lead to replacement. Equipment is increasingly connected to central monitoring systems via the “Internet of Things” where performance data is continually recorded so that smart software can predict equipment failures and maintenance/replacement requirements. Moreover, access to in-service data may enable predictive stocking of supply chains to reduce price volatility and customer asset utilisation.
Along these aspects some industrial sectors (e.g. Automotive, Aerospace, Consumer Electronics, etc.) are going faster than others, as for example Pharma and Healthcare. Nevertheless, something is moving also in that industry, and the coming years will experience a strong competition based on the capacity to exploit Industry 4.0 potentialities.
Given that, especially in a sector like Pharma and Healthcare, almost in its infancy concerning Industry 4.0, it is not easy to get out of the copious opportunities offered. Furthermore, it is even more difficult to identify the areas within manufacturing sites that will benefit more by implementing new solutions.
How to get out?
First of all, it is crucial to figure out the digital maturity level of the overall organisation in general and of the single areas in particular. Once a clear picture of the starting situation is defined, the moment to select the most fitting solution comes next.
Lots of Manufacturing Companies are experiencing different methods to understand where they are from an Industry 4.0 perspective. Among those, one of the most interesting is the “Digi Walk”.
The Digi Walk is a path inside the organisation allows to assess the current level of the company, as well as to shortly define a strategy towards the future. Its effectiveness lies in the ability to create awareness at all organisational levels and to involve both operational and managerial people in the innovative process.
Thanks to that, as an example, some multinational manufacturing companies realised to have great improvement possibilities in their Quality Control processes and introduced a digital defect detection and real time investigation system to support the classic root cause analysis, decreasing their manual labour effort by 20% and, at the same time, obtaining a defects reduction of 50%. This new way of work includes, among others, alerts in case of specific defects that exceed certain tolerance or the capacity to visualize the position of defects and their frequency of occurrence via Heatmaps.
On the other hand, along all the supply chain, many companies have introduced a retrofitting and condition monitoring system, allows them to reduce repair and maintenance costs by 30-40%, as well as decrease equipment downtimes by 60%, thanks to predictive maintenance and a better management of the machine service lifecycle.
Although a strong strategy is a central driver towards the evolution, an Industry 4.0 path forward cannot be a stand alone process, to be fertile it shall be accompanied by a cultural and organisational change. The traditional value chain is changing in an integrated network, involving increasingly suppliers and customers, making collaboration more important than negotiation, in an iterative agile approach, where individuals and interactions replace processes and tools. These aspects are perfectly symbolised by the concept “Team of teams”, representing the organisation of the future, where the relationships between teams follow the personal closeness and the trust between individuals and their teams, leaving the old traditional top-down structure, in which the only connection that counts is the one between supervisor and employee.
Finally, Industry 4.0 is a treasure trove of opportunities. Grabbing them before competitors would mean creating a strong advantage, in an era where the competitive game is played on efficiency, quality and time to market.
For further information please contact:
Antonio FOIS
a.fois@eurogroupconsulting.it
Riccardo LAURENZA
r.laurenza@eurogroupconsulting.it
