6 steps for implementing Industry 4.0

Author : Steve Sands, Head of Product Management at Festo

06 August 2018

Credit: Shutterstock
Credit: Shutterstock

Those tasked with implementing the new technologies for industrial digitalisation may struggle with where to begin the transformation. This piece from Festo reflects on the company's experiences and offers insights into the practical application of Industry 4.0.

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Tip 1: Get your definition right

Firstly, it’s important that all stakeholders understand precisely what they are seeking to achieve. There are so many buzzwords used to describe the increasing digitalisation of production: Industrial Internet of Things (IIoT) and Smart Factory are commonly used terms – but there is also a risk that the current, at times feverish, interest tempts manufacturers to piggy-back on the trend and confuse the audience by claiming products and solutions are Industry 4.0, when they’re not.

Confusion can arise because Industry 4.0 is a precisely defined roadmap and strategy, originating from the ‘Industrie Platform 4.0’ initiative, driven originally by the German government in 2009. Since then, the project has become a global one – but has retained a clear strategy.

Digitalisation, on the other hand, is a broader ‘umbrella term’ that describes all of the associated technologies, from the rudimentary use of digital controllers to the use of Big Data through cloud connected, ‘smart’ equipment. There is a whole lexicon of terminology being expanded as many countries are driving their own digital productivity initiatives. In the UK, the Made Smarter government-backed review coined the phrase Fourth Industrial Revolution (4IR).

Therefore, establishing a common understanding of precisely what is meant is needed to ensure all stakeholders are on the same page and working towards the same objective.

Tip 2: Don’t take on too much at once

Digitalisation has the potential to transform every aspect of production – and it will create disruptive products that make the most of new-found connectivity. It’s important to start the digitalisation process with proof of concepts or pilots, easily-understood projects that can be scaled up into larger projects when ready. Taking a step-by-step approach ensures factors such as networking, machine-to-machine (M2M) communications and integration with legacy systems can all be considered and addressed in a timely and cost-effective way.

Digitalisation is a journey that can best be achieved when the organisation has the right level of knowledge, confidence and experience – and these are acquired in a timely way, ensuring all elements are in place before over-committing resources.

Tip 3: Know what you want to achieve

Setting clear objectives for digitalisation and having a full understanding of what the end goal looks like helps align team members and overcome any potential barriers at an early stage, meaning digitalisation can be introduced efficiently.

Connecting devices and machines to each other and integrating them with business process software is nothing new – but unless there’s a clear vision and strategy for implementation, it can soon become a resources (time and money) drain. Are you trying to solve a problem? Or make the most of new opportunities? And who is driving the project? Is it a bottom-up or a top-down process? One of the best ways to prepare for implementation is to appoint an Industry 4.0 ‘champion’ within the company – someone who manages the cross-functional strategy and team, bringing together the relevant technical and business skills. From this starting point, a clear path can be laid towards design, build and integration.

Tip 4: Make sure you have buy-in from the whole team – and ensure they are equipped for change

Business transformation means change, and all stakeholders need to be on board. They should understand and accept the need for that change, and know how they are contributing to it. A clear communication strategy and inclusion of all stakeholders (including IT, human resources, production, and so on) is imperative to achieve buy-in from the start.

Internal stakeholders will have varying skill levels and experience, and different objectives regarding the outcomes. For example, IT departments will have embarked on their own digital journey, through activities such as accessing services from the cloud, but these may not be aligned with production teams – and be at an entirely different level of readiness. Internal stakeholders need to be completely engaged and cross-functional teams established.

It is quite normal for employees to be nervous about change. Reasons include: fear of the unknown; belief that there is no personal reward or a clash of KPIs; an existing climate of distrust; fear of failure; and worries about job security. The challenge for leadership is to make sure these concerns are addressed, and that appropriate support and training is available so that all employees are equipped for the journey ahead.

Tip 5: Establish the business model

Industry 4.0 not only means a change in technologies, it also provides an opportunity to consider and create new business models. Whether this change is optional or crucial will depend on the competitive environment – disrupt or be disrupted. A clear business model acts as a primary means of analysis, and provides clear gateways for progress.

For stakeholders, including employees, customers and suppliers, the use of a business model helps to drive understanding of the process, what is important and why.

The development of digitalisation-based business models impacts organisations across three key areas:

Early adopters are starting with small steps, putting pilot projects in place and learning their lessons before re-applying techniques on a broader basis
Early adopters are starting with small steps, putting pilot projects in place and learning their lessons before re-applying techniques on a broader basis

A. Optimisation – digitalisation can be used to enhance an existing business model. For example, the use of RFID/GPS to track the real-time status of components throughout the whole supply chain.

B. Transfer – taking a successful business model from one industry and applying it to another, where it was not used before. For example, load sharing resources between factories/businesses, in a similar fashion to the way in which car sharing works.

C. New model development – bringing together or developing new business models provides the opportunity for truly disruptive change.

Tip 6: Assess technical readiness and maturity

What’s the current state in the plant and how connected are existing products? There are two aspects to consider and it’s important to establish how your new project will overlap in these areas.

Firstly, digital infrastructure can underpin a wide range of manufacturing activities, including data processing on the shop floor, machine-to-machine interfaces and company-wide networking within production. In each case, there can be distinct levels of maturity, for example machine-to-machine communication can vary from fieldbus interfaces, to machines that access the internet, and web services with M2M software.

The second area of maturity relates to products. Again, digitalisation touches upon many areas, including integrating sensors, connectivity, functionalities for data storage and exchange, and monitoring for performance assessment.

There are assessment tools and consultancy services available to assess and understand current levels, and help set readiness and maturity targets for the future. Digitalisation should be an evolution, not a revolution.

Industrial digitalisation will undoubtedly have a positive impact on UK electronics manufacturing, and Industry 4.0 practices in electronics manufacture, design and test will revolutionise the way work is currently carried out. For electronics manufacturers to remain competitive, and at the forefront of their industry, it’s important to fully embrace the digital transformation journey – and understand that implementation doesn’t have be a burden.

Early adopters are starting with small steps, putting pilot projects in place and learning their lessons before re-applying techniques on a broader basis. As the understanding of the opportunities being created through technological developments, agreements to standards and reduction in costs take hold, most practical implementation discussions then turn to the topic of skills.

For further advice on putting Industry 4.0 into practice, download Festo’s whitepaper Practical Tips for Industry 4.0 implementation from www.festo.co.uk/I4practicaltips.

For electronics manufacturers to remain competitive, and at the forefront of their industry, it’s important to fully embrace the digital transformation journey.

Footnote: In brief, six steps to adopting Industry 4.0 principles effectively

1. Don’t let digitalisation jargon get in the way: define what you are doing using familiar terms your team will understand.

2. Digitalisation is a multi-year journey: pick quick wins that enable your organisation to gain knowledge and confidence.

3. Set clear objectives for digitalisation: it will help to identify and prioritise any potential barriers at an early stage.

4. Effective leadership and teamworking are crucial enablers of change management: establish clear responsibilities and communication lines, be inclusive and open from the start.

5. Think outside the box: digitalisation provides an ideal opportunity to consider totally new business models based on disruptive concepts, such as servitisation.

6. Break things down: the use of technological and sequential development stages can provide a real insight into digital expertise.

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