Ten fundamentals for manufacturing leaders to accelerate Industry 4.0 in order to survive and thrive in the post-pandemic era
Throughout our discussion with the manufacturing industry leaders, different organization and technology aspects came out those are critical learning for both the aspirants and those who have already started their journey. Overall, enterprises need to relook at both the fundamentals (how they embrace the new way of working and new technologies) and outlook (how to define and measure success) for the Industry 4.0 initiatives. We outline the Ten (10) fundamentals for manufacturing leaders to accelerate Industry 4.0 in order to survive and thrive in the post-pandemic era.
1. Clarity and commitment
2. Customer-centric flexible manufacturing
3. Need for Speed
4. Business Resiliency
5. Transparency and visibility
6. Business first, technology second
7. Reimagine operations
8. Embrace emerging technologies
9. Sustainability
10. Human centric
Developing the post Covid-19 strategy requires a clear understanding of the changing client needs, an assessment of the existing infrastructure and operational requirements. Industry 4.0 is closely aligned with the overall organizational transformation not just operational efficiency, so the KPIs are becoming more strategic. Program execution is all about committing to the cause and working in a disciplined manner to achieve the set objectives. Be bold yet pragmatic.
Manufacturing needs to be hyper-personalized. Industry 4.0 can help to realize this dream by producing the product in small-batch manufacturing (ideally with a lot size of 1) in a cost-effective way and within a specified lead time. For example, two newly added manufacturing sites in the World Economic Forum’s Global Lighthouse Network is Alibaba’s pilot Xunxi factory and Groupe Renault's factory in Maubeuge. Leveraging Industry 4.0 technologies, Groupe Renault increased manufacturing flexibility to deal with different vehicle configurations and manufacturing cost reduction by 16%. Alibaba’s pilot Xunxi factory leveraged a digital manufacturing model to enable end-to-end, on-demand production based on consumer needs and shortened delivery time by 75% and reduced the inventory holding by 30% among others.
“The customer demands are constantly increasing and we need to be extremely good at what we do which means we have to constantly focus on improving our core engineering and processes and, we need to have a lot of ability to leverage the knowledge of very distributed teams.”
Mark Colwell VP, Vestas Wind Systems
As the product variants are increasing at a very fast pace, the product development lifecycle has decreased significantly. Enterprises are facing an uphill task to manage the entire cycle of “innovation to launch” with the increasing product complexity. Thus enterprises need a more integrated system to manage the end-to-end product design, development, testing and validation, and launch phases.
“It must help you to transform your processes so that you can deliver products faster and beat your competitors to market while delivering better value for the consumer."
Leonel Leal Global Director in Advanced Manufacturing Engineering, Whirlpool
COVID-19 came as a black swan. Supply chain disruption became a critical issue for the enterprises during COVID-19 and it became one of the major focus areas of the manufacturers to rethink their sourcing partners, contract manufacturing locations, etc. Overall, supply chain transparency, responsiveness, and risk management are new strategic focus areas for enterprises. Rigid linear processes are no longer relevant. Companies need an overarching security and resilience strategy, which means Chief Risk Officer should be part of the overall industry 4.0 program.
According to Leonel Leal, Global Director in Advanced Manufacturing Engineering, Whirlpool, supply chain visibility is the biggest requirement at present, and supply chain agility and resilience are more important than the structure (distributed or centralized) of the supply chain.
The majority of the manufacturing organizations operate in silos, increasing lack of visibility, delay in decision making, and inefficiencies in the overall value chain. With increasing product complexity and variants, competitions, shortening product development lifecycles, and complex supply chains, manufacturers need more collaboration among internal business functions and external stakeholders to smoothly run the business and cater to customer demands. Robust data management is critical.
Sudhakar Varshney from Hach mentioned that they created a centralized control center as the pandemic hit several countries and multiple countries went under lockdown. He calls it a crisis management center to monitor data, which played a critical role in ensuring the connectivity of the supply chain.
Shiny new emerging technologies attract attention but technology is an enabler to solve business problems. Using AI based decision making will mislead the organization if it does not have the right master data. As technology and business strategies are converging, enterprises should focus on customer value creation and business impact enabled by technology and not only on technology innovation.
“Oftentimes, the technology intuitively makes a lot of sense. There is a lot of inherent value in its implementation but what needs to be considered is, does the customer appreciate the value and is willing to pay for it?”
Scott Branum Senior Manager, Digital Transformation, Evoqua
The pandemic has made companies realize the need to recalibrate archaic processes. For example, leveraging digital twins to quickly reconfigure production lines to implement new policies on manufacturing products. Industry 4.0 is all about enabling change management and process enhancement. Manufacturers have to rethink their operations in the post-COVID-19 world due to variation in product demand, change in the manufacturing product portfolio, capacity management, workforce distribution across the shop-floor, and virtual collaboration among others.
”So, to be able to respond to these black swan events, whether they're in the industry as an unpredicted event or whether they're external to us, it requires that we be agile…stability doesn't mean quality. They're not the same. Stability in a lot of ways is a metric of success for some things, but it's not necessarily the cause of its own thing.”
Across the converging IT/OT landscape. The need for seamless connectivity, embedded intelligence across the systems, visibility into functioning of systems, frictionless and efficient processes has been driving the convergence of information technology (IT) and operational technology (OT). Emerging technologies play a pivotal role in enabling this.
“From my experience, working with leadership to help them think about how the business could evolve, and then how various technologies could be leveraged to help that evolution process, is key to forming a digital transformation strategy.”
Needs to be a big agenda for enterprises and many of them have already committed to reducing carbon emission over the years. Industry 4.0 can contribute to this agenda through waste reduction and less energy consumption. Some of these outcomes are also helpful for operational and cost efficiency perspectives.
A clean energy producer like Vestas has a strong commitment towards sustainability and also set an audacious goal to become a carbon neutral company by 2030 without using carbon offsets and producing zero-wase wind turbines by 2040.
No transformation is successful without the people's involvement. So, the workforce should be at the centre of Industry 4.0 initiatives. Focus on the people aspect amplifies the overall business outcome.
Whirlpool understands this cultural aspect of transformation and follows one of Industry 4.0 implementation best practices, “Be human and be sensitive.”
Industry 4.0 is not a one-time exercise rather a journey with no exact end date but an overall long term goal with short term milestones. The leadership and workforce should be aligned together in this journey.
“Digital Transformation is not a process it is a mindset.”
Amit Maini from The Kraft Heinz Company
