“Before, during, and long after COVID-19. You’re not going to get anywhere without a plan.” How to build an Industry 4.0 implementation strategy

  • Eli Pelleg
  • June 3, 2020

In this third blog in the Confessions of a Manufacturer series, Eli Pelleg, Senior Manufacturing Consultant at Magic Software, discusses the common pitfalls and best practices manufacturers need to adapt to ensure that their Industry 4.0 implementation strategy is a success, during and beyond the COVID-19 crisis.

What do Manufacturers need to do to ensure their Industry 4.0 Implementation is a Success?

If there’s one thing I’ve seen too much of when factories try to move to Industry 4.0, it’s “missing the forest for the trees”.

Manufacturers should  always start with the big picture of their business in mind, not the technical issues they’re trying to solve right now. Often, manufacturers are scrambling to find a solution to specific issues rather than building a long-term roadmap. My take is that the right strategy that ensures long-term success is to link the manufacturing process technology into the business strategy in order to integrate them in a synergetic way.

Then the second step is to split the Industry 4.0 implementation strategy into smaller steps. 

First, create a roadmap and prioritize based on two dimensions. The first is the business impact. Start with projects that will have a bigger impact than others. 

The second is risk. Understanding the risks will help you to prioritize. What happens if you fail? Will your equipment go out for a while? Are you going to lose important data? 

You need to assess your projects along these two dimensions in order to prioritize those with the biggest business impact and lower risk. 

Understand which problems you can solve with which specific technologies.

I’ve noticed an unfortunate tendency sometimes not to evaluate the pros and cons of the first Industry 4.0 deployment correctly. The question that needs to be asked is not what the technology is capable of, but what does the business actually need to get ahead? 

Don’t forget that different problems can be solved with different technologies. Some can be solved by robotics, some by information, connectivity, and some by AI and BI. Only after understanding business needs can you prioritize what technology to implement, in what order, and when.

Digitization is a long term strategy, not a quick fix.

Once you decide where to start, which is a challenge by itself, you need to go through the whole lifecycle of that specific implementation and lessons learned. What was good? What went bad? What were the lessons learned, and how can you improve upon the results?

You need to keep re-evaluating your plan on an ongoing basis for two main reasons. One is that your business is constantly changing. The other is that technology is changing too. 

In terms of Industry 4.0, the strategic deployment and the priority evaluation needs to be monitored on an annual basis. Manufacturing is a very fast and evolving industry, and you need to keep track. 

Understand cost and ways to maximize ROI 

And of course, the third element is the cost. Too often, companies are not getting the maximum return on investment from their Industry 4.0 implementation strategies because they fail to see what is possible—often settling for minimal ROI instead of trying to maximize the returns.

For example, just by automating the data collection and data processing from the production flow a you can achieve a positive ROI. But with the same investment you can get much more in terms of quality, efficiency, and costs. All this comes down to planning ahead and understanding the full potential of technology and its implications on the business.

Choose your champion carefully.

For good or bad, a lot of the sponsors for Industry 4.0 deployments are the CIOs, and the IT heads. This is understandable as they are closer to the technology side of the business than anybody else. 

I think this is the wrong approach –  that the most effective sponsors come from the business. Yes, the tech teams will enjoy having processes digitized and automated. But the real value of Industry 4.0 is that it makes your business more profitable .

The CIO is a project sponsor. The technological advisor is maybe the project lead, but from a strategic point of view, you’re going to want buy in from the CEO or COO. This isn’t to say that CIOs can’t lead the project – it all depends on the personalities and your organization. 

The Importance of Having a Plan

If you come out of this blog with just one takeaway it should be this: plan ahead. You need to look further ahead from where you want to go initially and regularly update your Industry 4.0 implementation strategy to adjust for evolving business needs. To take your Industry 4.0 implementation strategy to the next level, you need people who understand both the business needs and the technology capabilities.

Many small and medium-sized manufacturers don’t have the internal capabilities to maximize the benefit of technology on Industry 4.0 and their own operational needs. 

That’s who we’re trying to help – Magic Software is uniquely positioned because it does not offer simply the technology part of the solution. FactoryEye, Magic’s Industry 4.0 platform, is the solution to the challenges described above. Not only is implementation fast, but with 360 degree visibility, FactoryEye connects your production floor data  with your business analytics platforms, ERP systems, and more. Even legacy systems can be connected to help you measure factory operations and improve performance.

But Magic goes beyond  just providing the system and integration capabilities. We also provide  expert advice on how to get the most out of the technology that you invested in. 

With COVID-19 disrupting supply chains and manufacturing worldwide, now is the time to prepare for the days after the crisis by having your factory-ready, with better business performance and improvement.  

Our manufacturing experts can help

Request an Industry 4.0 Consultation

Eli Pelleg is a manufacturing veteran with decades of experience. He started out working in IT for midsize factories, focusing on logistics processes. After a while, he moved to Intel, where he first-hand experienced the complexity of managing chip-making processes, deploying 25-30 types of machines, with over 200 processes. Following Intel, he served as an advisor for companies like Siemens, L’Oreal, Teva, and HP.

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