CEO of Apiko, an all-around software engineering and digital transformation consulting company that digitizes businesses worldwide.
The fourth industrial revolution, industry 4.0 in short, was initially triggered by the rapid technological progress and the benefits it introduced. In manufacturing, it got catalyzed during the Covid pandemic as the broader use of the internet of things (IoT), including sensors, robotics and respective software allowed limiting direct human interactions.
Such digitalization has allowed enterprises to stay competitive in the market by offering better value propositions for the clients and safer, more comfortable working environments for employees. Besides workflow optimization, proper data management can provide you with valuable insights regarding future manufacturing strategies and business opportunities.
However, a startling number of about 70% of digital transformation initiatives fail, according to research by McKinsey. In order to be successful and not become a part of this statistic, I’d like to share a few insights on how to approach manufacturing 4.0 constructively before you make any investments in it.
Set clear business and digitalization goals and KPIs.
Assuming that you’ve been running your company for some time, it should not be too difficult to define your business goals and KPIs. The challenge here lies in obtaining a clear understanding of how the implementation of new technologies will help you with reaching those goals.
Analyze your manufacturing processes to find their weakest spots (e.g., the operations with a high risk of disruptions, inconsistencies or a high percentage of manually completed tasks). Those are the first things that should get digitally transformed in order to stop them from holding back further business development.
Invest your time to plan the transformation strategy.
In general, your efforts can be applied in three main directions:
1. Necessary fixes to get rid of current dysfunctions.
2. Automation to optimize the manufacturing processes.
3. Data management and analysis to monitor the current processes and spot future business development opportunities.
Having agreed upon the long-term business goals with the company’s top management executives, conduct in-depth research and consult with the employees who are directly engaged in the investigated business processes. It will give you a deeper understanding of things like what changes need to take place, priorities, the final aim, ways to establish KPIs to track and measure progress and which skills are required to implement the changes. It will also help you see if you have the needed specialists among your staff.
Keep in mind the expenses required for introducing any kind of innovation. Pay attention to building the financial strategy as well.
Industry 4.0 may look overwhelming at first, but as long as you have a detailed plan, long-term strategic vision and gradual approach, you should have an overall straightforward journey.
Some Digitalization Benefits To Strive For
While digitizing your process, make sure that these potential benefits are being realized:
Safety. Prevention is the first and the most crucial step of staying safe. Ensure that the work environment and processes constitute no physical threat to employees. Consider as well cyber security to stay protected from unauthorized access to data and equipment, which can lead to manufacturing disruptions.
Data-driven decision-making. Structure and automate the collection, calculation and partial analysis of the KPIs that project your company’s performance. Use the timely obtained data to spot the tendencies and business opportunities they open. Gain insights on how to stay flexible, For example, you can use this data to modify your products to provide more value to your customers.
Increased quality and productivity, along with cost reduction. Automation of business processes has the potential to streamline the workflow and reduce the time and efforts required for task completion. Successful implementation should result in improved productivity and quality control.
Integrity of business processes. Get rid of any lag and miscommunication between different functional units of your company. With a properly organized integration of the respective software modules, your manufacturing enterprise can function more like a single organism.
Adjust the software to your needs, not vice versa.
There are several types of software solutions for the manufacturing industry that aim at automating various work processes. However, I find that incorporating them all at once is not a good idea. Usually, the areas which should be covered first and prioritized include:
• Work management and communications
• Customer relationships management (CRM)
• Supply chain management (SCM)
• Human resources (HR) management
• Data management and analytics
• Enterprise resource planning (ERP)
The functionality of respective SaaS solutions will somewhat overlap. Defining your exact needs will prevent you from dealing with unnecessary tools and the resulting ambiguity, complexity and often higher monthly subscription cost.
In the case where you have a clear vision of which functionality will still be useful for your enterprise within the next 5 to ten years, consider custom software development. This is when it certainly makes sense to get all the benefits of the technical solution tailored precisely to your business processes.
Software Architecture And IT Infrastructure Matter
Pay attention not only to what functionality you need but also to how it’s implemented. A manufacturing enterprise features a broad variety of business processes—from administering and recruitment to engineering and warehousing. Besides developing different software user roles, think of providing some independence to the corresponding application modules.
For instance, separate databases will increase the data access control while making the app more simple and convenient for your staff. A microservice architecture may be just the right way to implement such a solution.
With the business growth in mind, you need to make sure that the software is reliable and easy to support and scale while staying cost-effective. Proper setup of cloud infrastructure for your application will help to achieve these objectives as well as ensure high app availability and fast recovery from any downtimes.
One More Thing To Sum Up
Although it may seem that industry 4.0 is chasing the manufacturing companies threatening their market fit if they stay aside, I advise you not to boldly rush into digitalization. In-depth analysis, detailed planning and strategic thinking are your true companions on your road to success.