Industry 4.0, also referred to as the fourth industrial revolution, is a convergence of technologies that promises remarkable outcomes, including better use of resources, less nonproductive time and lower overall operating costs. It includes wide networks of connected devices via the Internet of Things (IoT) that capture data to sense, predict and interact with the physical world and help make decisions that support operations in real time. It also includes other cutting-edge technology like robotics, augmented and virtual reality, digital twins, blockchain and more.
But after 10 years of run time, is Industry 4.0 all hype? Are organizations having trouble moving the needle of Industry 4.0? Is there still reason to be hopeful?
The promise of Industry 4.0
It’s hard to imagine business leaders who aren’t smitten with the promises of Industry 4.0. It represents a mother lode of technology that promises sensible benefits and will provide descriptive and predictive analytics via automation and controls. It also will apply advanced algorithms, use artificial intelligence and machine learning, and provide ways to accurately and objectively predict supply, demand and buyer behavior.
In some ways, the promises of Industry 4.0 have been delivered. Many organizations have set up smart factories and agile supply chains where important data is captured, analyzed and fed into dashboards to allow humans to make objective and informed decisions in real time, thereby increasing uptime, process efficiency and operational fortitude.
But for many organizations, Industry 4.0 and all that it can deliver may not be a panacea of operational excellence – not yet.
What are some of the bumps in the road in adopting Industry 4.0?
Many obstacles to adopting Industry 4.0 have been due to common growing pains that tend to inhibit progress with technology adoption. The challenges we see fit within three categories: cultural, data and investment.
Cultural problems. IoT strategies and full adoption of Industry 4.0 initiatives do not always make it into the front court of corporate strategy. They may be part of longer five-year plans and are unquestionably on the radar of initiatives, but the corporate culture has lingering legacy technologies and processes that keep hanging on. Fear of change, apprehension to new technology or a culture of stagnation within the organization can also contribute to delayed or lack of adoption.
One component of the cultural problem is a sluggish reinvention of the role of the chief information officer (CIO), which must be redefined with a greater focus on strategy. Often the CIO remains the IT implementer-in-chief, consumed with integrations, upgrades, and keeping pace with hiring, cybersecurity and preserving the enterprise IT landscape. Instead, the CIO must have a ready hand in how information technology strategically leads to improved business results.
Many organizations struggle to redefine the CIO role as a strategic thinker with a delegation of personnel who can take the lead with robust cybersecurity plans and policies, interface with operational technology (OT) professionals within the production lines and share the vision of the digital transformations that strategically are essential. As a resolution, some businesses have formed a chief digital officer (CDO) role and given that person the duty of shepherding the digital journey while the day-to-day tasks of running IT operations are left with the CIO.
Data problems. Getting your arms around all the data so it can be used smartly is a common challenge. Often the volume of data is so great that it’s hard to know where and how to begin. At other times, the data may be plentiful but so unstructured that scrubbing it and getting it ready to compute is overwhelming, impeding or stopping progress. The data also may be nonrelevant or the wrong data needed for a specific application, or it may be inaccessible or unusable by the people or systems that need it.
To pick the finest fruits of Industry 4.0, it’s important to find the right data and put them to work to produce smart analytics that drive decisions. Data governance needs to be discerning and shrewd. This is where having a team of data architects proves invaluable, as they scrub and fix the data to make it usable.
Investment problems. The shift from a legacy operational environment into a digitally transformed environment that is well-wired and provides the pathways of promise for Industry 4.0 requires an investment. But a lengthy delay in return on investment (ROI) can cause initiatives to fail as leadership watches and waits to see value materialize. A better strategy is to focus on shorter use cases that can provide quick wins relative to time.
Putting Industry 4.0 back on track: What can be done to right the ship?
- Build a strategic renaissance. Industry 4.0 must be at the forefront of corporate strategy and shared by all. This means solidifying buy-in and ownership at the highest levels of leadership. It also means budgeting for digital transformations and data governance and redefining the roles of the CIO and others to help the overall implementation effort. Use past ROI successes of technology investment as guides to substantiate future investments.
- Combine other initiatives with Industry 4.0 to move forward. Make Industry 4.0 a pathway for other corporate initiatives and opportunities such as environmental, social and governance (ESG) factors. At the same time, let it work in tandem with improved cybersecurity plans to safeguard the OT and IT landscape together while capitalizing on 5G networks where and when available for the best latency and reliability.
- Think incremental wins for progress. Everything all at once isn’t smart for Industry 4.0 implementation. Progress with incremental use cases where appropriate to show progress and build confidence. Find the lowest-hanging fruit of opportunity to implement technology transformations. This will help build not only confidence in all stakeholders throughout the enterprise but also momentum to keep the progress moving forward.
While some organizations have not yet prospered from the myriad benefits Industry 4.0 can bring, taking steps to address the cultural, data and investment issues while putting Industry 4.0 at the forefront of corporate strategy and looking for short, fast wins can help companies get on the right path for success.