What does the Fourth Industrial Revolution have to do with the Small Manufacturer? Everything!

Pete DiSante, Automation Alley
January 18, 2022
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Most small manufacturers struggle with finding the time to get started and knowing where to start. This article is packed with information to help you identify areas where they can utilize Industry 4.0, as well as some of the best ways to implement it.

What does the Fourth Industrial Revolution have to do with the Small Manufacturer? Everything! 

Are you a manufacturer? Are you familiar with Industry 4.0 technologies? Have you successfully implemented Industry 4.0 technologies into your operations? If your answer to the second question is ‘no,’ then your answer to the first question will probably be ‘no’ before you know it! And if your answer to the third question is ‘no,’ then answer this question: What are you waiting for? 

Most small manufacturers struggle with finding the time to get started and knowing where to start. From Automation Alley’s research, the Industry4.0 adoption roadblocks mentioned most often by manufacturers are: 

  • Lack of technology knowledge and expertise 
  • Lack of financial resources 
  • Lack of awareness of the need and/or relationship to bottom line 
  • Lack of visionary leadership and/or cultural appetite for adoption

According to the MEDC Economic Development Research Partners Report of 2019, 82% of U.S. manufacturers have fewer than 50 employees. And workforce issues are their immediate concern. They are acutely focused on near-term profitability, at the expense of creativity and outside-the-box thinking. To think clearly, you needto keep your head above water. And lately that’s been hard to do. 

However, if you want to remain competitive and, frankly, stay in business, now is the time to do what’s right to be where you need to be tomorrow. 

In the fall of 2020, Automation Alley and Lawrence Technological University’s Centrepolis Accelerator, in partnership with the Michigan Economic Development Corporation(MEDC), developed a comprehensive Industry 4.0 asset map. The purpose was to get a pulse of the Michigan manufacturing community’s sentiment surrounding Industry 4.0 technology and its projected trends, and to provide recommendations for future strategic planning efforts. They learned that some of the primary difficulties in adopting Industry 4.0 technologies include: 

  • Testing of Industry 4.0 technology in a production environment requires disrupting existing manufacturing operations. 
  • Deciding who assumes the “risk” for adopting Industry 4.0 technology if things don’t goas smoothly as hoped. 
  • Need for immediate payback before manufacturers will consider adopting Industry 4.0technology. 
  • Michigan manufacturing firms are too busy firefighting to focus on evaluating Industry4.0 technologies and implementing pilots. 
  • Capital budgets that might have gone to Industry 4.0 tech improvements are being delayed due to cybersecurity spending, especially during the pandemic, to enable remote work without compromise. 

In addition to these issues, many manufacturers don’t know where to start. They may not even know what it is they should be looking for. And if an Industry 4.0tech company knocks on their door, how can they know if this provider can give them what they need and do it for a price that will improve their ROI? This fear of the unknown extends to the worry that the new technology may lead to negative disruption rather than process improvement. 

But the dangers of the “do nothing” approach are real. Markets are changing at an increasingly rapid pace. Having a customer today does not guarantee success tomorrow. If a customer’s demands force a manufacturer into a corner where it can no longer meet the needs or make a profit, then they are forced to find an alternative without much preparation. Many companies do not understand their value proposition and their customers. They leave out time for strategic decision-making, to include recognizing how technology can improve their revenue-making decisions. 

The Fourth Industrial Revolution is upon us. It will not be going away. Consider some of the key problems Industry 4.0 can solve: 

  • Operational resiliency, “lights out” manufacturing 
  • Reducing need for unreliable manual inspection workers  
  • Avoiding returns/rework/warranty issues through automated quality inspection 
  • Replacing unsafe work procedures or challenging ergonomics of workers 
  • Reducing operating costs and improving throughout 
  • Protecting against cyberattacks to Information Technology (IT) and Operating Technology(OT) 
  • Allowing new levels of customized one-off ordering of products, despite variations in products, enabling more competitive domestic manufacturing 

So you say, I’m game. But how can companies learn more about Industry 4.0 and what it can do for them? Here are some pointers: 

  • Attend conferences and trade shows to find new Industry 4.0 technologies  
  • Follow Industry 4.0 Accelerators and other Accelerators (IIOT, robotics) 
  • Participate in Industrial Trade Groups (ITG) – a group of non-competitive industrial distribution firms that meet to share new technologies  
  • Look to Pitchbooks, VC investments 
  • Research online innovation platforms (e.g., F6S, Gust) 
  • Follow the studies of NGO’s (Non-Governmental Organizations) supporting Industry 4.0tech hub regions in EU, Asia, Silicon Valley, Israel (e.g., Start Up Nation Central in Israel) 
  • Discover the findings of tech scouts combing Industry 4.0 tech hotbeds, including West Coast (Silicon Valley) and East Coast (MIT), Israel, and EU 
  • Participate in Automation Alley programs like Integr8 and Technology in Industry Report 
  • Discover how Industry 4.0 technology is improving quality, throughput, machine downtime, and reducing capital & operating expenses by reviewing actual case studies  
  • Learn about the benefits of Industry 4.0 technology from an existing supplier, and not just the actual source of the technology. 

Be prepared. This move to adoption of Industry 4.0 for your company requires a cultural shift. It requires buy-in from all employees. It will require plant decision-makers and influencers to bless and approve testing and use of I4.0technology. The plant managers must have a separate budget for implementing it. And more importantly, they must be convinced that the inevitable disruptions and extra work needed to implement the new technology will be worth the effort. Equally important is to help the plant managers overcome the fear that transparency of data in their plants will expose existing problems and inefficiencies, and to encourage them to seek and understand these problems and inefficiencies to better identify the proper technologies needed to eliminate them. Once implemented, they must allow for the time needed to evaluate the technologies to ensure reliability and efficacy before instituting it enterprise wide. 

Recognizing that I 4.0 technology implementation is the way to protect the future of any manufacturing entity requires support and understanding at every level of the company. An enterprise-wide vision, from management to manufacturing engineer, to machinist to maintenance, must be adopted and understood. C-Suite upper management needs to be educated on the value of adopting I4.0 technology and the investment it requires. Ambitious employees that will promote the advantages of I4.0 technologies and take ownership of adopting the solutions need to be fostered. All employees must be convinced that adopting a culture of promoting I4.0 enhancements will positively impact people’s jobs, especially in union environments. 

Manufacturers that understand the vision, goals, and other indicators of good communication all do much better than manufacturers who do not. This understanding is shared at all levels, not just the CEO or leadership team. They generate more cashflow, profit and revenue and they have more adoption in Industry 4.0. The size of the company doesn't matter much. What matters is having leaders within the organization driving the company forward. 

The bottom line is that without resolving the issues that block repeatability, manufacturers feel obligated to meet customer demands that are sometimes difficult and not as profitable. Over time, this creates an environment of stress and short-term thinking, in which companies become reactive to the market instead of proactive. A reactive company typically does poorly in times of poor economic conditions and does great in times of great economic conditions. They are not as resilient in times of stress unless they increase repeatability of sales and decrease complexity. Adopting Industry 4.0technologies can put you in the proactive position of finding potential customers, knowing what the customer wants, convincing the customer that you are the right supplier, and providing it in a quick and cost-effective manner. And most importantly, being able to anticipate and make informed adjustments when the market changes. 

So, as you can see, NOW is the best time to put I 4.0 technology to work for improving your business – no question about it! 

Pete DiSante, Automation Alley
Pete DiSante, Automation Alley

Pete DiSante serves as a project manager at Automation Alley. He started as a Controls Engineer at ANR Pipeline before moving to the US Army-TARDEC, where he was a member of the External Business Office. He retired from TARDEC in 2018.

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