Industry 4.0 or the fourth industrial revolution, are terms used for the current trend of automation and data exchange in Manufacturing Technologies. This revolution includes Cyber-Physical systems, the Internet of Things and Network Connectivity, together with a culmination of process, systems and people to form a “smart factory”.
People will form the most important role in this fourth industrial revolution because information, analytics and automation will become the norm, and human intelligence will be the deciding factor in leveraging this information to create a differentiation in the marketplace.
Imagine a scenario in which key information from every aspect of production is captured and shared — from suppliers to engineering, from machines running on the production floor to workers performing inspections and maintenance.
Bringing together factories, supply chain members, quality control, data management and customer service under one communication umbrella affords the opportunity to spot problems earlier, implement cost savings at all levels, improve customer satisfaction and increase profitability.
To connect efficiently affects the ability to compete effectively
That’s the promise of the Industrial Internet of Things and it will revolutionise manufacturing.
To be able to take advantage of this Value Chain and gain the benefits of IIoT “things” need to be connected, data needs to be filtered and analysed, and organisations need a robust network coupled with Big Data.
Hardware costs have decreased dramatically, we now have pervasive connectivity, increased network speeds and development tools are fast and easy. This is the time for the fourth industrial revolution because the technology chasm is closing and will provides a greater expanse to support the digital revolution.
A significant percentage of industrial factories still have silos of software and data, operating autonomously from one another e.g. the production and quality may not talk early in the cycle in order to identify and avoid quality issues, which affects the product delivered to the customer. Or Operations is not alerting Maintenance to the cause of a persistent downtime issue, which could cause severe disruption to production. A high percentage of factories still have homegrown solutions or point solutions that connect pieces of the factory, but the information is fractured and can only address one element of efficiency.
Actions need to be taken at each step of the process, with the ultimate goal of connectivity in mind. Manufacturers can look at current equipment, equipment purchases, supplier contracts and customer service communications, with an eye toward unification and open standards.
IIoT will revolutionise manufacturing operations, but such a significant shift in infrastructure and methods carries risk, but it will bring incredible advantages to those willing to get on board this journey train early.
When thinking forward to a software solution, to match the vast data of IIoT, it should include the following features and functions to properly connect a factory: production planning, scheduling, performance management, workflow and labour management, work-in-process, inventory management, sustainability/energy management, and material management, to name a few. These are the features and functions found in a typical Manufacturing Execution System (MES). With an MES software solution managing data, assets, and processes in an IIoT-based system, managers will have a comprehensive view of operations rather than juggling the complexities of daily operations. Managers can spot trends and patterns, and use those insights together with proven methods such as Lean and Continuous Improvement. Imagine the benefits if when an order was placed there was a seamless transition to production – information was transmitted to packaging, machine communication was invoked and all these components flowed through to Transportation Logistics. Each components operating independently yet connected by an information network.
Several companies are already reaping the benefit of Industry 4.0 such as Caterpillar, Airbus, Mercedes-Benz, Volkswagen, Bosch, and many other prominent industrial brands.
Where should you start?
You could identify a business problem and start to connect a few devices. Once data is being collected you can start to analyse and visualise this data, including the machine data. This should lead to actionable insights and operational efficiencies. By taking this small step you will be on your way to establishing an IIOT competitive advantage for your business.
"Companies that want to make better use of the data they gather should focus on two things: training workers to increase their data literacy and more efficiently incorporate information into decision making, and giving those workers the right tools.” – Harvard Business Review
This statement is easier said than done! In the current Internet of Things (IOT) how do organisations break new ground? Connectivity and mobility are more affordable, people have the opportunity to ask questions and provide feedback, and through this connected society organisations are left vulnerable. These complexities demand a new business model that requires innovation to stay ahead of the pack by creating the right image and providing consumers with a level of service that ingrains loyalty. The very technologies created to help make life more fun and manageable, now threatens to overwhelm business. Organisations are asking themselves “how do they cope with this level of complexity and take advantage of this connected society?”
Companies that forge deep connections with their markets and consumers can outpace both change and competition. The rapidly escalating data created by connected consumers should help generate valuable insights. But sorting it for market and consumer trends is a daunting challenge.
In the world which is “always on” connected consumers are using the power of information to drive prices down and service up and their expectations for an outstanding experience only increases along with their choices. To keep up with this connected world, organisations must transform unprecedented data complexity into operational simplicity, whilst generating rich insights.
General Electric CEO Jack Welch once said “If change is happening on the outside faster than on the inside, the end is in sight”.
Few corporate executives believe their organisations are equal to this race. Most organisations are structured for stability not change. This new connected society is giving way to a new consumer centred world in which companies will prosper by developing relationships with their consumers by listening to them, while adapting and responding to their wants and needs. Knowing what your consumers want can create meaningful experiences. Standing out in what some call the ‘sea of sameness’ becomes more critical as local expands to global.
To stand out executives are recognising that their organisations must become as connected as their consumers. Most admit their organisations are not equal to the challenge and trying to understand how they can adapt to doing business in this age of experience by connecting people, ideas and data; these will become an organisation's three pillars for growth and prosperity in this connected world.
Future success for Retailers is going to be defined by their ability to adopt and adapt technology to effectively manage the changing landscape of Retail. Those Retailers that will emerge as high performers recognise their need to evolve by adapting their environment to cater for multi-channel; while providing their consumers a seamless experience regardless of channel or touch-point.
New channels can provide a number of challenges around technology refresh, capability and an understanding of what needs to be accomplished; while adapting to consumer preferences. A deeper understanding of how consumers evaluate, communicate and transact, can assist in this transition, and technology can be leveraged to achieve profit sustaining results.
Successful retailers will be characterised by their ability to become agile and adapt their 'go-to-market' through insightful information on consumer preferences, brand perception and competition. The ability to architect technology and business processes to cater for continuous change, while achieving fast time to value will feel like jumping through hoops, but has become a retail reality.
Insight and Innovation will be the key to designing and testing concepts without the need to physically create them. Gaining consumer insights through virtual concepts before money is invested to understand the uptake of the market will provide a positive impact. This new era of consumer centric retailing will need to look at the best way to engage consumers in store; while testing and verifying decisions that have been made much earlier in the planning process.
Collaboration between brand, design, product, planning, sourcing, merchandising and coupling that with consumer engagement through social innovation, visual planning and virtual showrooms; becomes critical to protecting brand, because brand is the ‘King Pin’ to sustaining results. Brand is built over a long period of time, but can enter a free-fall if components like quality, speed to market, product cost and other moving components are perceived negatively by the consumer. A recent ground-swell that influences consumer perception is an organisation's image around social responsibility and being seen as an ethically aware organisation.
‘Empower consumers’ when it is viewed from that perspective, it opens up a lot more opportunities in the market.
An experience is a memorable event that engages your consumer in a personal way and creates a connection.
Joseph Pine, co-author of the experience economy says “If you sell the end, rather than the means, you gain more economic value. And the end is helping your consumers achieve their aspirations”. This is connecting with the consumer not only at a product level but at a lifestyle level, that triggers an experience.
How can today’s technology transform this experience of connecting with the consumer, in order to differentiate products? 3D modelling and visualisation can provide realistic views of retail aisles including shelves, fixtures, products, lighting, etc., to help build an experience through creating the experience and allowing the consumers to connect with the 'design to shelf' process.
By modelling virtual shelves and stocking them with realistic 3D product representations built from 2D pictures, brands and retailers can efficiently design shelf layouts, experience them with the eyes of consumers, and augment shelves with real-time business indicators to make informed decisions.
Category Management and Space Planning such as new packaging introductions can be presented to consumers in a simulated environment, gaining insights and preferences in order to perfect the launch well before the products hit the shelves.
Both Consumer Goods Manufacturers and Retailers want to ensure that every consumer, in every store can find what they want, when they want it quickly and easily. Delighting consumers keeps happy consumers coming back again and again and connecting with those consumers provides brand loyalty.
Creating “stickiness” is critical, where consumers know instinctively that “They want that” and they “Don’t want that”, when it comes to product selection.
Creating the right experience for your consumer can enhance your brand and in turn the retailer’s category revenue, providing greater leverage within product categories.
For decades the cost of computer hardware and software put small and medium businesses (SMBs) at a competitive disadvantage as they sought to expand globally. With the adoption of cloud computing, there is now a platform which allows SMBs to access hardware and software on a pay-as-you-go basis, which is leveling the playing field and providing opportunities for SMBs to complete on a global stage, while providing companies a strong rate of return on their investment. This has now provided the power to differentiate SMBs in the marketplace without a significant upfront cost and is altering the business world’s established order. These companies can now tap into new markets, being able to turn things on and off, as demands fluctuate. They also have access to collaboration tools that enable them to operate across national and international boundaries in ways that only large companies could afford. Software as a Service (SaaS) provides a high level of system availability and the opportunity to try the environment without too much time, investment and effort.
Being able to expand a company’s IT infrastructure quickly and create agility through tapping into precisely what functions are needed, allows CEOs of smaller companies to take risks on a global stage, they might not have contemplated in the past.
The United States and Western Europe have been at the forefront of SMB’s adoption of cloud technology, but Asia is still catching up. Many Asian companies are suppliers to large Western companies and these companies insist on the businesses within their Supply Chain operating via the cloud. Asian subsidiaries are also creating locally based cloud operations that link to their parent company’s global cloud-based systems. These smaller operations may not justify the infrastructure due to lack of complexity or scale of requirements, and Cloud can be a cost effective solution for these satellite locations.
Operational efficiency can also drive rapid adoption of Infrastructure as a Service (IaaS), providing virtualised computing resources over the Internet, alongside Software as a Service (SaaS) as discussed earlier, and Platform as a Service (PaaS) providing a platform for the development of the applications and pre-configured features that a company can subscribe to, providing the flexibility to include the features that meet requirements while discarding those that do not. An example is a textile and apparel supplier that spends a lot of time and money in sending samples of fabrics back and forth from their factories in Asia to customers in the West. Their quality control inspectors also spent a great deal of time travelling from factory to factory. These types of companies can find a competitive advantage by leveraging cloud and conferencing technologies to cut costs and accelerate time to market.
There is still doubt about the cost of the service over time and the sensitivity of data being held in a 3rd party facility, but the vast majority of SMB CEOs must overcome short-term challenges, because if they fail to seize opportunities quickly, they may lose business to more agile small rivals or larger companies with deeper pockets.
For Consumer Good and Retail companies priorities are shifting to e-commerce, omni-channel, big data and security. Some companies are further along the maturity curve of adopting these technologies and others may be postponing it due to competing priorities. Brands and vertical retailers experiencing prolonged periods of growth and profitability may not pursue digital technologies as part of their strategy for continued expansion and innovation, but as a consequence they lose sight of opportunities in the market.
3D prototyping has many innovative applications such as testing new store concepts, understanding consumer behaviour and assisting with the launch of new products or promotions. 3D prototyping can be leveraged as a potential collaboration tool in order to produce an optimal balance of style and quality; as well as balancing what price consumers will pay and who in your market is the target. 3D prototyping has gained attention from the fact that it can cut product development and production costs and supports collaboration between pre-production teams through a visual process. Designers and merchant teams no longer need to wait weeks or months to see what products have been produced and evaluate what the potential gains will be from their designs. This can significantly improve the financial benefits to retail, apparel and fashion companies.
A development cycle can be organised chaos for designers, rangers, planners and product managers. People work very long hours at a speed than can cause burn-out and contribute to mistakes during this period. Anyone that has worked closely with these teams appreciates there is never a recovery moment during the rush to market.
Unlocking innovations is a consequence of freeing up the teams. For design and product development, a 3D prototype frees them from the traditional budget and time constraints associated with physical sample development. Faster time to market contributes to more product options and these options can be used to extend product assortments or create entirely new product lines.
We now operate in a global market and e-commence continues to push consumer demand for fresh, innovate products that match your market, and being able to be precise through consumer insight information can be a real benefit.
Consider the reduction in excess inventories, markdowns and clearance stock if companies had predictive feedback from consumers prior to products hitting the shelves. Product Managers could leverage this feedback within a cycle to edit or scrap designs that didn’t resinate with their consumers through pre-launch digital campaigns.
The old adage that consumers vote with their wallets rings true. Companies spend millions of dollars and invest up to 12 months to create ranges to secure that vote. Technology can open the possibility for consumers to vote online with minimal company investment in time and cost.