Industry 4.0 is the future of manufacturing. Digital connectedness, both vertical and horizontal, is the way forward.
Core trends of manufacturing
Automation, including industrial robots, Industrial Internet of Things, cloud computing and Artificial Intelligence (AI) with seamless Operations Tech & Information Tech (OTIT) integration, form the core of the digital manufacturing landscape. There is a huge scope for evolving/niche technologies, such as 5G, 3D Printing, AR/VR, digital twin, drones and image analytics, in manufacturing. For distributed manufacturing, authenticity requirements & circular economy and blockchain are evolving as compelling propositions.
Key factors for impactful transformation
Digital transformation needs to be contextualised for each organisation. The leadership commitment, tech & digital maturity, business priorities, surrounding ecosystem, risk appetite and cultural dimensions determine the path of each journey.
The big-bang approach can be risky, especially if it has many exploratory threads. A balanced approach with a quick proof-of-concept is strongly recommended with a ‘fail fast-scale fast’ mindset. Focus on digitalisation of what (domain or function) one is good at, especially if one does something that is not time-tested. Many digital initiatives fail because ‘change’ is assumed; ‘change’ must be planned for and facilitated. Celebrate not only the successes but also the failures to create an atmosphere of digital entrepreneurship in the organisation.
Scaling during volatile times
Every crisis is a catalyst for innovation. Digital investments in safety & sustainability will occupy a significant wallet-share of the CEO’s/CDO’s budget allocation. Organisations need to invest in technologies to reduce reliance on human power wherever possible. ‘Light-out factories’ will become strategic to tackle future situations like this.
Strengthen investments in communication & collaboration disproportionately and be creative in people-related processes. Any organisation’s future skill requirements will have a strong bias towards cognitive competencies. The fact is that you cannot hire these skillsets from outside. One needs to invest in their people to fill the gap and utilise the time now and be ahead of the curve. Data is the backbone of any digital transformation. Companies need ‘data experts’ at different levels – technical, domain, governance, security, architecture, etc. Identifying the ‘data value chain’ from its origin to consumption and often beyond is very critical. Many a time, non-availability of good/clean/useful data is an issue. It calls for a data strategy – it will include understanding the purpose & use of data, identifying the use cases, designing seamless data processes to avoid redundancy & duplication, designing the architecture for scalability & security and establishing governance (a data board for example) for data policy & review for continual improvement.
Positives and recommendations
The pros of digital transformation in manufacturing are well evidenced, from cost reduction, productivity improvement, flexibility and throughput increase to enhancement in safety and sustainability that influence the intangibles about people & brand. Unfortunately, only about 5% of digital initiatives have been termed truly successful. Only half of the technology initiatives have fetched the targeted results. The main reason narrows down to people and digital adoption, from leadership to the operating team. A human-centric digital strategy is crucial for success. The fuzzy definition of digital will create confusion. Companies need to carve out their digital journey and play to their strengths. Digital often has an exploratory angle, and it demands a super-agile delivery model against classical technology programs. Lastly, one cannot do everything by themselves; it is important to build partnerships and tap into the larger ecosystem for complementarity and to share the ransformational load, the risk and of course, the returns.