How To Present A Foolproof Business Case To Start Your Industry 4.0 Journey
How to convince your boss it's time to start your Industry 4.0 journey.
Industry 4.0, Industrial IoT and digitisation are movements currently influencing the decisions of manufacturers across industries and countries. The applications of Industry 4.0 and Industrial IoT technologies are substantial. These span from data collection and instrumentation through to smart automation of equipment for greater efficiencies, improving product quality and yield.
Facteon’s Industry 4.0 and Industrial IoT experts work with manufacturers across the globe to implement their smart manufacturing programs. It can be a daunting process from technology selection through to implementation. Often, manufacturers don’t know where to begin. Starting is arguably the most difficult part of an Industry 4.0 journey.
At Facteon, we work with a range of manufacturers to implement their smart manufacturing programs. We also provide clarity on technology selection and establish how these solutions can be applied for maximum business impact. So, we help manufacturers understand the competitive advantage behind the buzz words. Then, we turn boardroom talk into action on the manufacturing floor.
In this article, we’ll look at how to consider your investments in Industry 4.0 and Industrial IoT. Also, we’ll cover how to measure the impact of these technologies on your manufacturing operations and wider business.
There are no Industry 4.0 strategies, only business strategies. It sounds obvious but all Industry 4.0 investments and initiatives need to align with your business goals and strategic needs.
If you can’t answer: “Why are we doing this?”, you need to ask: “Should we really be pursuing this project?”
The credibility of Industry 4. 0 technologies inside your organisation relies on the project owner being able to articulate the value proposition and win results for the entire business. If this can’t be done, you’ll struggle to get momentum behind the project.
Every business has a level of comfort when it comes to technical and business risk.
At the two extremes, we have laggard and early adopter. Carefully consider where on this spectrum your business needs to sit. Some companies need to move quickly to avoid disruption (even if that might be uncomfortable). Regardless of what position you choose, there will be advantages and risks to each approach, which you’ll need to weigh up.
Do you need to fail quickly and pivot often?
Would you rather bet on things paying off but move at a slower pace?
Do you prefer to be a fast follower that optimises and improves, or operate at the bleeding edge?
Technology is too often seen as a panacea for a business’ problems. Real progress relies on the considered application of the right technologies to the right pain points. This all needs to happen at the right time and pace for an organisation and its customers.
Many companies are caught between the need to reduce the risk of the process and fear of missing out. A happy (and cost-effective) medium is often a pilot program or the development of a proof of concept in an iterative fashion. This lets you test the technology in your business environment.
When running a pilot, be prepared to strongly define what the minimum viable solution or product will be. Often, teams develop a spec with a laundry list of wants and needs. The key is to ruthlessly scale back to only what is needed. This allows the solution to be deployed quickly, collect user feedback and be iterated.
Data is the fuel of all Industry 4.0 and Smart Manufacturing initiatives. From artificial intelligence to machine learning, manufacturers are rapidly working to clean and grow their databases to capitalise on new technologies.
The same approach needs to be taken when it comes to assessing the impact of and building the business case for Industry 4.0 and Industrial IoT solutions.
Some of the key areas to consider are:
Time savings and efficiency gains: What is my measurement of output per worker per hour and what will the increase be?
Scrap rates: What are our current scrap rates? What specific defects can be identified and then reduced or eliminated?
Business metrics: What are the metrics in the wider organisation which will be positively impacted by this program?
Before you jump into implementing Industry 4.0 technology, know your current operational performance stats. To measure performance improvements (or lack of) post-Industry 4.0 technology implementation, you need a clear, reliable picture of factory operations prior to starting. Before embracing your new tech, make sure you know your factory’s baseline. This will allow you to evaluate the efficiency gains, improvements in product quality and Overall Equipment Effectiveness (OEE) that comes with the implementation of the right technology. Even if you’re measuring via a paper-based system to start, you will at least know where you’re coming from.
By contrast, such measurements are also key to preventing the waste of time and money if the technologies are not delivering the expected performance gains. You can also easily identify any measurement gaps. Visibility is a commonality across all aspects of the Industry 4.0 and Industrial IoT movement. As a manufacturer operating in the Internet Age, information drawn from good data is power.
Remember (especially during your pilot phase), that no measure is perfect. Each measure needs to be taken (with a pinch of salt) in the context of your wider operation. If your factory is currently running below capacity, it may not make sense to measure against a theoretical maximum of production when it comes to OEE.
Likewise, if your product input is highly variable and affects the quality of output or efficiency, you may want to set different performance metrics for different batches. The age and variety of equipment between lines can be another factor. So, by defining performance for each area, rather than using a blanket measure, you can more accurately track baseline performance and improvements.
According to McKinsey, less than 30% of business transformation programs are successful. The results are similarly dismal for Industrial IoT transformations with Cisco reporting that 75% of Industrial IoT projects couldn’t succeed due to lack of skills or engagement.
With this in mind, it’s critical to engage people across the organisation to make your investment a success. Some businesses use Industrial IoT in combination with a Lean management program, this is a tool to foster thinking around operational improvement, measurement and reduction of waste. These are all things that Industrial IoT can inform through data gathering and measurement.
Furthermore, ensure the skills you need all exist in your organisation. Then, have these people put their heads together. This is central to a manufacturer’s success on this journey. Process knowledge, experience and technology mastery may not exist in the same person. Instead of tirelessly working to hire someone who may not exist, create cross-functional teams to collaborate on your Industrial IoT project. There’s great value to be gained in understanding end-to-end processes while breaking down organisational silos.
Very few organisations, even scaled ones, have all the resources at their disposal when it comes to Industrial IoT implementation. In fact, a recent McKinsey survey showed that smaller organisations were far more likely - 2.7 times - to report success of their transformation efforts than much larger businesses, due to their ability to move fast and bring in external skills.
Here at Facteon, we help organisations of all sizes to successfully deploy and unlock the benefits of Industrial IoT solutions. For smaller organisations, we provide the resources needed to scale up their Industrial IoT initiatives. For larger companies, we breakdown organisational inertia that can sap progress and waste resources.
It’s with this flexible approach that we can quickly engage our customers and help them on their smart manufacturing journey.
To learn more about our Industrial IoT and Industry 4.0 offerings, you can download this information pack or you can contact the team direct here.