Smart Machines & Factories
Building a solid business case for the digital transition
Published:  30 October, 2019

Industry 4.0 promises to deliver a broad range of business benefits, but the majority of industrial companies are still at the digital starting gates and few can claim to have created real business value. But, by adopting robust, scalable and flexible IoT platforms, manufacturing enterprises can build a solid business case for the digital transition and secure the vital first breakthroughs on a journey to the digital world. Dave Pickles, managing director, Capula Ltd, reports.

Recognising the potential benefits associated with the advent of new digital technologies, many manufacturing companies are now accelerating their efforts to exploit the tremendous surge of new tools and the smarter digital approaches that are available to today’s businesses. Technologies like the industrial internet of things, advanced analytics and virtual and augmented reality are already transforming enterprises. However, while many companies recognise the potential for value creation, far fewer are effectively realising that value for company benefit.

A significant barrier to the uptake of Industry 4.0 approaches is the belief that the risks associated with adopting this new model will outweigh any potential benefits. Typically, manufacturing and industrial plant assets represent a significant long-term investment and owners and operators are inevitably concerned that introducing new technologies could prove costly. For instance, manufacturers may be afraid that adopting digital technologies could make existing assets obsolete or could perhaps even have adverse impacts on reliability. Given the dramatically accelerated trajectory to maturity though, today the bulk of Industry 4.0 technologies represent a robust, well-proven and secure tool kit. Digital technologies are thus already available for implementation, working alongside existing instrumentation, control (I&C) and other IT systems. Nonetheless, there are a number of fallacies surrounding the adoption of new digital technologies that go some way to explaining the slow uptake.

Myth busting Industry 4.0

One common perception is that the move towards an Industry 4.0 footing requires significant front-end investment. However, rather than major investments, often the most important steps concern changing the mindset to embrace digitalisation right across the enterprise.

Certainly, Industry 4.0 implies new interconnections between systems, networks, data and users. It means the application of advanced analytical techniques to deliver timely, data-led insights. But the bulk of the core technologies needed to implement Industry 4.0 are already in place in many manufacturing environments. Systems like PLCs, I&C and, increasingly, individual machines are connected to communications networks and transmit huge volumes of data. Even where some necessary data is not available, existing equipment can easily be upgraded by fitting, say, a vibration or temperature sensor quickly and cheaply using modern digital technologies.

Companies are also often able to achieve significant benefits by simply harnessing the data that is available in existing, though commonly siloed, repositories. Indeed, many companies only use a fraction of the available data that they are already collecting. In the modern digital world, this unused data may be among the most underexploited and valuable resources in a company’s inventory.

Concerns that the introduction of digital technologies will potentially disrupt operations are also easily dismissed. Industry 4.0 initiatives are largely non-invasive and instead focus on exploiting existing data streams with little by way of negative implications for production. Existing I&C systems can be run alongside more advanced tools that make better use of existing data without any need for shutdowns or breaks in production.

Lack of available manpower is another commonly cited reason for tardiness in developing Industry 4.0 solutions. Modern analytical tools and machine learning technologies are often able to extract business insights more quickly and easily than anticipated and with much less requirement for human resources.

But, even accepting that, in reality, adopting Industry 4.0 is less of a technical and economic challenge and instead represents a major business opportunity. Manufacturers still need to know where to start on the digital journey.

Making the leap to digitalisation

One of the primary requirements to realise value from the digital transition is to get a solid buy-in from across the organisation. Ultimately, delivering the benefits of digital technologies rests on the ability to engage every individual within an enterprise. Everyone is welcome in the digital world and from C-suite executives to frontline staff, new insights into digital ways of working will make their roles more effective, productive and enjoyable. However, convincing senior managers of the benefits can be challenging.

Because many companies already have all the data they require, heavy investment in new equipment or expensive and long-winded software development programmes is not needed. Instead, the latest generation of ‘plug and play’ cloud-based analytical tools typically allows the value of existing data streams to be realised in a matter of weeks. Furthermore, with the correct approach to digital engagement, a solid business case for Industry 4.0 can be rapidly assembled.

In order to control costs, accelerate payback and maximise the long-term value of Industry 4.0 developments, it is important that any business case addresses a specific existing problem or bottleneck. Effective Industry 4.0 implementation begins with a clear business objective rather than investing in technology for its own sake. The digital effort should be linked to clear objectives with specific KPIs, such as cost, plant availability or process throughput.

It is also important to extract value from existing resources wherever possible. Modern, commercially available IoT platforms offer seamless integration with existing systems and mean less time setting up and integrating platforms and more focusing on core business objectives.

With a range of digital options typically available, evaluating each solution and selecting the most promising for further development is a critical stage. Enterprises that successfully manage the digital transition typically start from a high level perspective before zeroing in on approaches that deliver the best ROI performance. Developing digital initiatives can also serve as the basis of a roadmap for more ambitious long-term plans.

Using data to build value

Typically, as businesses begin their digital journey and learn how to combine their data and use new analytical tools, other opportunities and novel methods to improve processes or asset performance are also quickly discovered. Building the digital platform on robust technologies offers a solid foundation for further development at scale. For instance, many Industry 4.0 approaches share the same broad requirements as they securely combine data from multiple sources to enable more sophisticated analytical approaches. Users also share the same general requirements for intuitive and clear interfaces. By adopting consistent standards alongside tried and tested tools from the start, organisations are able to avoid the need for future work to realign platforms and practices as their digital wave grows.

Using commercially available digital tooling suites that are able automate, simplify and optimise processes - as well as accelerate troubleshooting and develop timely solutions as problems emerge - is one approach that is becoming increasingly attractive. Indeed, manufacturers are able to commission dedicated cloud-based Industry 4.0 innovation platforms that are delivered as a service, for example. Tailored platforms are also allowing companies to apply enterprise-wide technology quickly and at a scale that suits their needs to improve processes, extract new insights from historical data or support decision making.

It is clear that Industry 4.0 allows companies to take control of their processes and optimise performance. Digital technologies can make industrial processes like manufacturing more predictable, transparent and efficient, improving production and the work environment while also reducing corporate costs and risks. Building momentum from projects that are visible, compelling and scalable is a vital first step for any enterprise hoping to generate value from digital transformation.