The Truth about Industry 4.0 from Manufacturing Insiders – Episode 1

  • January 1, 2020

In this blog, Amir Aloni, VP of Manufacturing at Magic Software, and Eli Peleg, Senior Manufacturing Consultant at Magic Software dish out the truth about Industry 4.0 and globalization.


The Compulsory, Tell Us A Bit About Yourselves
Amir: I started out in construction, developing quality control software for factories that made building material. From there, I moved to other local companies and then to international companies like Nestle and Black & Decker. Although I’m an IT guy, I spent much of my time on the shop floor, feeling and learning the pain points of manufacturing firsthand.

Eli: I started out working in IT for midsize factories, focusing on logistics processes. After a while, I moved to Intel. Let me tell you, chip making is extremely complex, using 25-30 types of machines, with over 200 processes. Besides Intel, I’ve been an advisor for companies like Siemens, L’Oreal, Teva, and HP.

What Are The Greatest Challenges Manufacturers Face Today?
Amir: Figuring out what Industry 4.0 is. Seriously, it’s hard to give one definition because Industry 4.0 and the challenges related to it, really does vary from nation to nation and industry to industry. There are actually two challenges involved: a new system, a new way of getting and analyzing data on the one hand, and on the other hand, learning about and then mastering a new set of tools which really are different than anything anyone, from the folks on the shop floor, to the executives on top floor, have ever used.

Eli: Exactly. Well, let me back up a second. Industry 4.0 will benefit everyone but it’s going to play out differently in every location and industry. Come to think of it, that’s not so different from what you said, Amir. I agree with you that manufacturers need to make changes related to both the new tools and the mindset behind them. You can see this in the semiconductor industry, of course, which thrives on new tools, but other industries as well. In the end, it’s all about supplying consumers goods in the most efficient way possible. Of course, globalization is intertwined in all this, but I’ll stick to Industry 4.0 per se for right now.

Will Industry 4.0 Benefit All Midsize Manufacturers?
Eli: Yes, though the magnitude of the benefits will vary. You know who got this whole thing going? Western European manufacturers are the driving force behind Industry 4.0. Even though they were already ahead of the game, they wanted to increase their edge. But that eventually, Industry 4.0 will benefit everyone.

Amir: If you ask me, the western European manufacturers were really trying to overcome low wages in developing countries. They upped their tech game to compensate for labor costs. That way, they could still hire local employees and make a decent profit.

But to get back to midsize manufacturers — they vary in their perceptions of Industry 4.0.

  • Some are pretty passive towards it; they think it’s only for the large manufacturing companies, but not for them.
  • Then you have those who get it, who understand that Industry 4.0 isn’t always about volume; in fact, it’s the smaller batches, the ones with very precise requirements, where Industry 4.0 really shines. And that’s perfect for midsize companies.

Eli: I’ve been working with Industry 4.0 for 20 years in the semiconductor industry. And yet, many midsize manufacturers don’t understand Industry 4.0– they’ve heard of it, of course, but they don’t know how it can solve their real-life problems — increase their flexibility without increasing their inventories, etc. So, one thing we have to do is bridge that knowledge gap; help executives see that Industry 4.0 really can solve key issues.

Pet Peeves in How Companies Implement Industry 4.0
Eli: What gets me are the people who use the latest technology in their daily lives but won’t advocate for it on their shop floor. Sure, they need to respect the budget and be risk-averse, but when they see how Industry 4.0 products make their lives better and read reports about how adding basic sensors cuts maintenance costs, etc., you’d think they’d be the ones pushing for change. After all, the disconnect just gets to me.

Amir: Well, people are afraid to take a risk in their careers. You and I rolled the dice, that’s not for everyone.

Eli: For sure. That’s why I think It’s important to explain to people that yes there is a risk, but you can make the transition gradually, integrate Industry 4.0 for process x, not process y, always with a backup and a way out.


We hope this chat with Eli and Amir got you thinking about Industry 4.0 and how it might make your business run better. We’ll be back soon with a new chat with Amir and Eli. In the meantime, if you have any questions, you know where to find us.


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