Your Industry 4.0 Journey: Managing Cost To Maximise Return

You're convinced you need to start your Industry 4.0 journey. You've also convinced key business stakeholders that the time is right. Here's where the hard (but rewarding) work begins.

You've overcome Roadblock 1: Where to start (if you haven't just yet, click here to learn how). The next roadblock you're likely to face is cost.

Concerns around cost is one of the most common roadblocks for businesses seeking to implement Industry 4.0 technologies. It can be particularly hard for businesses that have little experience with digital technologies on the production line to evaluate the required investment in IT, IIoT and networks.

Even without experience in digital transformation, many businesses are aware of the reputation for IT projects to run over both budget and time. That is, of course, one of the key reasons behind running a pilot project. An effective pilot project will measure actual versus projected performance gains, real versus budgeted costs and identify issues that could lead to project overspends on a larger scale. Having a clearly defined business case where costs are measured against projected gains changes the conversation from a cost-based one to a tangible ROI discussion.

There are three main categories of costs:
  • Capex – the upfront costs of physical sensors, software, and consultancy for the pilot project
  • Opex – the ongoing costs of running the project
  • Opportunity costs – the down time and potential time spent elsewhere.
Let’s look at these roadblocks in more detail and see how they can be avoided or overcome:

Modern wireless sensors are reliable and a cost-effective choice for many manufactures. Many machinery designers and integrators now deliver machinery with operational and informational sensors installed.

Software, such as an MES, includes the upfront cost and ongoing licensing fees but many providers are now offering it via a SaaS engagement model, thereby moving the cost from capex to opex, making it more palatable for the finance team and resultant budget approval.

Finally, consultancy fees associated with these projects need not be excessive. By using small projects like the ones stated above, value can be easily proven and translated to ROI calculations for a pilot project. 


As noted, opex costs are minimal, especially when couched in terms of improvements in quality, up-time and decrease in waste. 

Opportunity cost

The down time for retrofitting sensors to equipment is minimal. It’s essential to take a long-term view. Downtime in the present is an investment in the future state of your operations. In implementing Industry 4.0 and IIoT technologies in the present, your business will be better equipped to meet demand in an ever-changing manufacturing environment.


Before starting your Industry 4.0 journey, download our Handbook.

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