Data is the new oil
Uber, Tesla, Airbnb, Google, Facebook; these companies have grown to become corporate giants through collecting and analysing data. A lot of industries have access to data but fail to harness this data to their advantage. However, many Consumer Products (C P) firms have started to realise the benefit of this. Johnson & Johnson recently worked with Capgemini to improve demand planning accuracy and enhance external manufacturing planning management. The team achieved this by enhancing the quality of data that is needed to ensure planning is done effectively, resulting in a more precise demand baseline forecast. By improving the demand baseline forecast they reduced the need to hold excess inventory, thus reducing their working capital.
What is the history behind this revolution?
The Industrial Revolution is split into 4 different segments. The first Industrial Revolution started in 1784 and was famous for producing the steam engine. The second Industrial Revolution started in 1870 and was about mass production, notably the Ford Model T production assembly line. The third revolution started in 1969 and is officially known as the digital revolution, where the use of PLC (Programmable Logic Controller) and IT was rolled out to speed up production and improve the quality of the finished product. A lot of industries are still in Industry 3.0.
Industry 4.0 is more than a technological revolution. It is essentially connecting different devices together for traceability and trackability. For example, if there is a problem in one of the manufacturing lines that causes a delay, this can be updated automatically on the system and adjust the production plan in real time without any human involvement. Humans should only interact for exception based scenarios.
If businesses do not take action soon, and start driving Industry 4.0 in their manufacturing division, they will risk falling behind their competition. External manufacturers may start to offer better efficiency and lower prices. The Capgemini Research Institute conducted a study recently that revealed 76% of manufacturers either have a digital factory initiative that is ongoing or are working towards formulating one.
Why is it important?
In this new digital age, businesses have evolved to improve their cost efficiency, become customer centric and drive agility within the organisation. Industry 4.0 will help to meet these objectives.
Cost efficiency – CXP Group recently conducted a study where they found that 90% of European manufacturers consider unplanned downtime and emergency maintenance caused by sudden failures a major challenge. This can worsen when there are scarce skills as engineers and technicians decide to leave or retire thus the factory is left with a shortage of experience. To resolve these issues, companies can install machine learning based monitoring that can continuously monitor assets and predict maintenance requirements before a major breakdown occurs on the line.
Customer centric – In the digital age, the consumer has become much more demanding in terms of levels of service and product customisation. The impact of this is that CP companies need to become much more responsive and agile in how they produce products and services for their consumers. Nike has already started to provide a service called Nike By You which allows customers to customise products bought from them.
Agility – To create an agile business will mean that factories need to invest in flexible production lines. New technologies need to be deployed such as robots and cobots to achieve this. A Cobot is a collaborative robot that can help remove the need of completing repetitive tasks that humans might otherwise do. This can reduce human error and increase the wellbeing of employees in the factory.
Is it as simple as implementing a new technology solution?
The simple answer is no. It is about how people interact with the technology and ensure that manufacturing lines become more efficient and responsive. There is a common misconception that installing technology in a factory will make all the problems go away. From my experience as a Process Engineer working for a large manufacturing company, the best way to solve a problem was not to look at the data behind each asset, it was by speaking to the shift teams running the line and understanding their problems. The best way for a business to tackle Industry 4.0 is by deep diving into the factory floor, understand the problems that are faced on the line and implement a solution that Solves the problem through use of Internet of Things, cloud-based software or robotic process engineering.
Industry 4.0 should not be about adding a process to the current environment but removing an existing process and achieving a higher quality outcome.
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Consultant, Operations Transformation