Industry 4.0: What Manufacturers Need to Know

Industry 4.0 has been around for several years already, but movement within it has accelerated drastically over the last two years, thanks in part to pandemic-related challenges. You’ve likely made some changes along the way to incorporate new technology into your manufacturing operations, but it can be hard to keep up. How prepared are you for a digital transformation?

What is Industry 4.0?

You’ve heard the term and you’ve likely heard a variety of descriptions, but what is Industry 4.0? At its core, Industry 4.0 encapsulates one thing: technology-driven change. But that covers a broad range of topics itself.

According to Gartner, “Digital transformation can refer to anything from IT modernization (for example, cloud computing), to digital optimization, to the invention of new digital business models.”

There are opportunities for you in each of those categories. Effective change puts people and processes first. Streamlined processes help your employees be more productive, allowing you to provide better customer service and more efficient operations overall.

Trends in Technology

Specific examples of technology tools that can help you transform your business into an Industry 4.0 organization include:

• Customer relationship management (CRM)
• Enterprise resource planning (ERP)
• Preventative maintenance sensors
• Automated workflows
• Data analysis

This list is far from exhaustive, and adoption of new platforms and processes in manufacturing is as varied as the tools available.

Many manufacturers are in the process of implementing an Industry 4.0 strategy, but still in the early stages. That means there’s still a lot of opportunity to take advantage of.

The tools available aren’t necessarily all internally focused, either. For example, technology can give you better visibility across your supply chain, which can strengthen your relationships with partners and make those tough conversations about order status much easier.

This is even more important when your supply chain is upended, like we’ve seen over the past few years. According to a survey from the Manufacturing Leadership Council, this problem is not likely to go away anytime soon.

What it doesn’t mean is abandoning everything you already do best. Incorporating Industry 4.0 ideas should enhance your operations and help you identify how to operate better.

There is a lot to consider and by engaging an experienced manufacturing consultant, can help you assess where your best return on investment is now and help you build your roadmap to the future.

Wherever you are in your technology journey, we can help you determine the best tools and steps along the way.

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Building an Industry 4.0 Workforce

Choosing the technology is only one part of launching a digital transformation. Success also requires you to have the right people in the right positions at the right time.

Nearly two-thirds of manufacturer respondents to the Oxford Economics survey said they’ve started training their workers on the new processes. Slightly less (61%) have done the same for new technologies.

Your workforce can also help you determine areas within your operations that could benefit from optimizing technology. Gathering a cross-functional group of people in a room provides an opportunity to identify how processes really work and outline inefficiencies that you can immediately improve.

If your digital transformation is going to work, you also need to have management and executives who understand the value of change and are willing to help build a manufacturer of the future. Only one-third of manufacturer respondents to the Oxford Economics survey said they made changes at the leadership level to align with a digital strategy.

Changes don’t necessarily require replacement, but it does require a keen focus on providing training to people at all levels of your organization to keep everyone moving in the same direction: forward.

How Technology Drives You Forward

Your digital transformation should keep a focus on your customers’ and offering them a better experience. If you make it easier for your customers to do business with you, odds are they’ll come back more often – and they’ll be harder to lure away.

Use technology, such as a CRM, to get better data on your customers and to track their journey. Apply an analytical eye to see how you can be serving them better at every step of the buying process.

Marketing automation options like email campaigns, adding chat bots or lead forms to capture information on your website can help you streamline those touchpoints and help unify your customer messaging across the board.

Technology can also level the playing field for smaller manufacturers trying to compete with the giants. It helps support an agile supply chain, while fostering innovation throughout an organization.

Another critical element in digital transformation is building a more efficient operation, from the factory floor to the human resources office.

Business Process Automation (BPA) can help streamline processes such as hiring new employees, which includes many steps and many departments within your organization. One Eide Bailly client was able to set up automated notifications to flow the process to the next step once the current step was completed.

BPA can also automate functions such as:

• Invoice approval
• Tracking equipment details and flagging routine maintenance or replacement needs
• Order tracking

Next Steps Toward Industry 4.0

Today’s manufacturing environment requires a digital focus, so to help keep you moving forward, here are important steps to begin.

1. Assess your current technology climate. What tools do you already have that can serve you even better? For example, if you already use an ERP, does it have additional modules that would make sense to implement in your organization.
2. Talk to your team. Your employees know where inefficiencies already exist in the workplace or areas that create excessive mental tolls during the workday. Find out what tools they could use or processes that could change to make jobs easier and more productive.
3. Engage with your supply chain partners. In today’s environment, with extreme supply chain disruptions continuing to plague the industry, talking to your partners can help you identify gaps in processes. Use this to help guide your assessment.
4. Don’t get discouraged if you can’t do it all at once. Digital transformation is not a destination, it’s a journey. The first step is to start; the second step is to continue. Identify the necessary action for quick wins that can get you started on the path to success.

What’s your digital transformation maturity level? All organizations fall somewhere on the digital transformation maturity scale. Learn more where you are and steps you can take to increase your digital efforts. We’ve created a Digital Transformation guide to help you do just that.

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