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Industry 4.0 on a Budget: Small Manufacturers Need Technology Too

 

This article originally appeared in the 2018 MFG Forum event program.

One advantage of my current role, which I did not get to experience while working full-time in manufacturing, is getting to take part in conferences for the new tools, technologies and techniques being used in the industry. As a result, I have witnessed many presentations from suppliers of Industry 4.0 products and processes, as well as heard from companies that have taken various steps to implement smart factories, Internet of Things, robotics and so on.

During these presentations I have watched small- to medium-sized manufacturers literally wilt as they hear of the huge demand for resources, expertise and investment. Most get discouraged by this and begin to think that perhaps the Fourth Industrial Revolution is not for them. Given the incredible benefits of employing Industry 4.0 tools and methodologies, this is a mistake. While implementing anything new in a small to medium business provides challenges and requires some rather specific activities, it is not impossible to accomplish.

Even if a company is not ready to take the plunge into Industry 4.0, there is no time like the present to test the waters. The following is a list of actions that small- to medium-sized manufacturers can take to begin capitalizing on the processes and capabilities available:

  1. Understand the Needs of the Business (aka Voice of Business). No company of any size should invest capital or resources until they are sure that the investment will align with their needs. It is critical for a company to understand their Key Performance Indicators (KPIs) and be able to tie performance to financial results to track their Return on Investment (ROI). For example, will the increased capacity from reducing downtime pay for sensors or condition- based maintenance? Figuring this out could help identify the funding required for further improvements. This is a process that has been well defined and used for more than 30 years. If needed, there are resources (such as The Center) that can help you through this.
  2. Become Educated on the Opportunities Available. Once the organization identifies areas of opportunity, they also will want to identify which technologies or processes are available. There are many groups building 4.0 environments where hands-on experience can be gained, along with conferences and networking groups that bring suppliers and customers together. Not only does this educate the company on what is available, but it provides invaluable information to suppliers on what still needs to be developed.
  3. Create the Vision. With the Voice of Business (VOB), awareness of 4.0 opportunities, and a decent idea of future products and services all in place, the leadership team can then envision the perfect future state for the company. It’s important that the champion tasked with creating the vision has a fair level of subject matter expertise. Many smaller businesses do not have a Chief Technology Officer (CTO) or Chief Intelligence Officer (CIO) available to them, so it may be necessary to seek outside support both here and in the following step.
  4. Build the Blueprint. Creating an implementation roadmap to achieve the future state is next. The order of implementation will be driven by the needs of the business matched with the ROI, availability and suitability of the products and processes required. It is possible that the initial steps will be preparatory. If a company wishes to use the Cloud for data storage or integrated manufacturing to connect with their suppliers and customers, they will need to consider whether the implementation of cyber security is needed prior to beginning that work (Hint: the answer here is yes).
  5. Start Small. Choosing to implement 4.0 technologies in stages makes perfect sense for small to medium-sized businesses, particularly if the savings of the initial endeavors will be used to fund the next ones. As each success adds to the bottom line, the struggle to identify funds or resources for the next opportunity is simplified. The most important benefit of this approach, however, is the importance of building momentum, as with any continuous improvement effort.
  6. Build on Success/Gain Buy In. The greatest advantage of starting small and focusing on one business need at a time is summed up nicely with the phrase, “Nothing succeeds like success.” As mentioned previously, the practice of identifying and implementing process improvements to drive better results in a business is hardly new. Of course, the belief that each new initiative is simply the “flavor of the month” isn’t new either. If a company wants its team to embrace change, it must be able to demonstrate the benefit of the change while mitigating the fear of the unknown. This can be accomplished with incremental changes, as they are easier to communicate, measure and control.

This article was originally published as a portion of a larger blog post by the The Center on 12/5/17. Check out the full post and other essential tech-related resources at blog.mmtc.org.

About the Author

Chuck WernerChuck Werner is a lean program manager for the Michigan Manufacturing Technology Center (The Center). He may be reached at 734-451-4244 or cwerner@the-center.org.

 

This article originally appeared in the 2018 MFG Forum event program.

One advantage of my current role, which I did not get to experience while working full-time in manufacturing, is getting to take part in conferences for the new tools, technologies and techniques being used in the industry. As a result, I have witnessed many presentations from suppliers of Industry 4.0 products and processes, as well as heard from companies that have taken various steps to implement smart factories, Internet of Things, robotics and so on.

During these presentations I have watched small- to medium-sized manufacturers literally wilt as they hear of the huge demand for resources, expertise and investment. Most get discouraged by this and begin to think that perhaps the Fourth Industrial Revolution is not for them. Given the incredible benefits of employing Industry 4.0 tools and methodologies, this is a mistake. While implementing anything new in a small to medium business provides challenges and requires some rather specific activities, it is not impossible to accomplish.

Even if a company is not ready to take the plunge into Industry 4.0, there is no time like the present to test the waters. The following is a list of actions that small- to medium-sized manufacturers can take to begin capitalizing on the processes and capabilities available:

  1. Understand the Needs of the Business (aka Voice of Business). No company of any size should invest capital or resources until they are sure that the investment will align with their needs. It is critical for a company to understand their Key Performance Indicators (KPIs) and be able to tie performance to financial results to track their Return on Investment (ROI). For example, will the increased capacity from reducing downtime pay for sensors or condition- based maintenance? Figuring this out could help identify the funding required for further improvements. This is a process that has been well defined and used for more than 30 years. If needed, there are resources (such as The Center) that can help you through this.
  2. Become Educated on the Opportunities Available. Once the organization identifies areas of opportunity, they also will want to identify which technologies or processes are available. There are many groups building 4.0 environments where hands-on experience can be gained, along with conferences and networking groups that bring suppliers and customers together. Not only does this educate the company on what is available, but it provides invaluable information to suppliers on what still needs to be developed.
  3. Create the Vision. With the Voice of Business (VOB), awareness of 4.0 opportunities, and a decent idea of future products and services all in place, the leadership team can then envision the perfect future state for the company. It’s important that the champion tasked with creating the vision has a fair level of subject matter expertise. Many smaller businesses do not have a Chief Technology Officer (CTO) or Chief Intelligence Officer (CIO) available to them, so it may be necessary to seek outside support both here and in the following step.
  4. Build the Blueprint. Creating an implementation roadmap to achieve the future state is next. The order of implementation will be driven by the needs of the business matched with the ROI, availability and suitability of the products and processes required. It is possible that the initial steps will be preparatory. If a company wishes to use the Cloud for data storage or integrated manufacturing to connect with their suppliers and customers, they will need to consider whether the implementation of cyber security is needed prior to beginning that work (Hint: the answer here is yes).
  5. Start Small. Choosing to implement 4.0 technologies in stages makes perfect sense for small to medium-sized businesses, particularly if the savings of the initial endeavors will be used to fund the next ones. As each success adds to the bottom line, the struggle to identify funds or resources for the next opportunity is simplified. The most important benefit of this approach, however, is the importance of building momentum, as with any continuous improvement effort.
  6. Build on Success/Gain Buy In. The greatest advantage of starting small and focusing on one business need at a time is summed up nicely with the phrase, “Nothing succeeds like success.” As mentioned previously, the practice of identifying and implementing process improvements to drive better results in a business is hardly new. Of course, the belief that each new initiative is simply the “flavor of the month” isn’t new either. If a company wants its team to embrace change, it must be able to demonstrate the benefit of the change while mitigating the fear of the unknown. This can be accomplished with incremental changes, as they are easier to communicate, measure and control.

This article was originally published as a portion of a larger blog post by the The Center on 12/5/17. Check out the full post and other essential tech-related resources at blog.mmtc.org.

About the Author

Chuck WernerChuck Werner is a lean program manager for the Michigan Manufacturing Technology Center (The Center). He may be reached at 734-451-4244 or cwerner@the-center.org.
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