Preparing your business for industry 4.0

Tips for realising the benefits of cyber-physical technology

A number of our clients are well in to the third year of their Industry 4.0 journey. In plants around the world, we’re helping our clients to harness the technologies enabling the fourth industrial revolution. Already, digital technologies that were once thought of as science fiction are becoming common place in industrial and manufacturing businesses, and other industries are fast catching up.

The benefits are compelling. But let’s be clear: Industry 4.0 is not about the technology. It’s about applying technology to drive a step change in your industrial, manufacturing or agricultural output through: 

• Information creation – We can now measure more, capture more data, derive greater insights and digitalise physical information that was previously not accessible to the average business.
• Information transparency – We can make this information accessible to everyone in the organisation, regardless of whether the data comes from: sensors, plant and equipment, business systems or a digital engineering model.
• Improved decision making – We can use this information to enable humans, machines or Artificial Intelligence to identify problems in real time, make better decisions and solve problems.
• Autonomous operations – Eventually, machine learning / Artificial Intelligence will use the connected data to make decisions, control plant and equipment, and head towards autonomous operations – completing the ‘cyber physical system’.

The result is higher plant efficiency, fewer people, fewer breakdowns, more uptime, lower stock levels, lower capital costs, higher yield and a better health and safety performance.

Where do you start?

There’s a lot of advice around on how to get started with Industry 4.0 – just start, test things out, talk to other people, fail fast – some of which is good advice. But, in my experience, before you can extract real business value from Industry 4.0 projects you need to get your ducks in a row. This means:

1. Define your future business

When each tiny element of your operation can report on its status, how will you use that data to improve productivity? Will you have a lights out facility that barely needs human intervention? How long will it take you to get there? Perhaps, at three years you’ll still have a similar set up but with better information driving efficiency. At five years, you’ll be down to a skeleton crew. At ten years, the plant will be human-free.

In this future, what assets will you need to own or lease? How will you operate, maintain and upgrade them? What people will you employ? How will you employ them? Where will they need to be and what skills will they need?

Look beyond your operations. How will you interact differently with your clients and suppliers? What will your products or services look like. What is their value proposition? How will you deliver them?

2. Start with cross-functional solutions

It’s tempting to get some quick wins with point solutions, but this creates major issues down the track. Unless they are part of a bigger, integrated plan, each point solution adds another layer of cost, inefficiency and complexity. Almost every Industry 4.0 project throws off data that can create value in another part of your business. But it can only do so if other functions can access that data.

This means:

Projects need to be run and owned by the business – not by any one business function. Don’t flick projects to engineering or IT – and don’t let people run off and do their own thing. Unless it is chaos you want, you need to make sure all your digital systems and data feed into an architecture deliberately designed based on what your business needs the system to do.

When you’re defining the scaled-up version of each technology application consider: its benefits; its capex and opex implications; how it will integrate with other business systems; and what business transformation it may enable. Think first about what information you need – across the business – and whether it will provide real value. Decide centrally on the information, platforms and technologies you’re going to standardise around.

The business case looks different. Your health and safety folks probably can’t justify the expense of building a digital engineering model to feed into virtual reality (VR) headsets to reduce accidents on the plant floor. But what if you also shared the data with engineering, operations and maintenance? Then, the business case becomes considerably more attractive.

For example, we recently mapped out how digital engineering could enhance a client’s business, looking at how each operational function would use and benefit from digital engineering information. A test we undertook on an existing site supports returns across design, construction and operations in line with the Boston Consulting Group’s forecast as noted in current EU BIM Task Group documentation.

Your starting point should integrate the new technology with capital projects. Don’t waste time retrofitting into existing plants. Build the digital engineering information first and use it to benefit new builds and future operations. Otherwise, you’ll end up with capital projects teams continuing to provide deliverables on paper. You can then focus on digitalising your existing plants.

You need multi-disciplinary skills. Defining, managing and integrating a 4.0 project is likely to require a diverse range of capabilities including: business advisory, data science, IT, systems integration, digital engineering, software engineering, gaming engineering and technology project management.

You need digital standards. Integrated solutions require digital information, system integration, data storage and security standards so you can share, exchange and understand data. Without digital standards, you’ll struggle with data veracity down the track.

3. Start with technologies that pass the ROI tests

Look at the maturity of the technologies that will enable your future state. When will they be cost effective? Generally, we’re finding that process simulation technologies, IoT, big data, digitalising systems (MES/MOM/ BIS), digitalising engineering deliverables and VR have viable application right now. The business case for artificial intelligence, augmented reality can also stack up in certain applications.

And, now what?

Now you’re ready to consider the best technology suppliers for the application that will deliver your business benefits and start your Industry 4.0 implementation in earnest. Remember to treat these projects like any other. The technology may be revolutionary, but the rules of business remain the same. Develop a business case. Map out the costs and risks. Test, implement and monitor rigorously for benefits realisation. 

No matter what the hype going around the industry, buying new software and deploying lots of sensors won’t automatically translate into better plant or factory performance. Business value only emerges when you get the right information to the right person at the right time – at a cost lower than the benefit it delivers.

Read more about IoT in the first of our Industry 4.0 series – What every business needs to know about IoT, or read about the real examples of how we are leveraging digital technology for our clients in the article Digital Technology: More than just shiny toys.

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