Now that we’re a few years into the fourth industrial revolution, there’s a lot to be learned from other people’s experiences in this area (both the successes and failures). Even more so because we’re emerging from several years of pandemic-related disruption.

Whether you’re new to exploring industry 4.0 strategy or you’ve been working on your smart factory transformation for a while, now is a good time to take a look at what’s going on in this space.

What’s working? What’s not? And what can you do differently to make the most of current opportunities and ensure the success of your own industry 4.0 transformation?

Defining Industry 4.0

Firstly, let’s take a look at how industry 4.0 is currently defined by key players:

  • PWC: ‘Industry 4.0 encompasses end-to-end digitisation and data integration of the value chain.’
  • Gartner: ‘Industrie 4.0 is about driving digital value chains, thus creating more agile and market focused competencies.’
  • Deloitte: ‘The term Industry 4.0 encompasses a promise of a new industrial revolution—one that marries advanced manufacturing techniques with the Internet of Things to create smart manufacturing systems that are not only interconnected, but communicate, analyze, and use information to drive further intelligent action back in the physical world.’
  • KPMG: ‘Industry 4.0 (i4.0) is a collective term used around the world to describe the convergence of IoT-driven technologies, augmented decision making and advanced automation.’
  • EY: ‘Made possible by the emergence of digital systems, networked communications, machine learning and large-scale data analysis, it refers to the increasing integration of these technologies into business and production processes in order to make them self-sustaining and more efficient.’

There seems to be general agreement that Industry 4.0 is centered on digitization, supported by data, analytics, IoT, connectivity, more advanced technologies, automation, and AI — driving efficiency, agility, value, and better decision-making.

What does industry 4.0 look like in 2022?

Google trends chart showing searches for ‘Industry 4.0’ from 2017 to 2022.
Google trends chart showing searches for ‘Industry 4.0’ from 2017 to 2022.

Interest in Industry 4.0 has remained consistently high over the past 5 years, with Google searches peaking in late 2019. It’s safe to say that Industry 4.0 is here to stay.

Here’s some recent stats on the current state of manufacturing and smart factories:

  • Operating cost competitiveness – According to Gartner, 36% of heavy manufacturing CIOs whose enterprise had recently experienced disruption said that operating cost competitiveness had fallen behind. 
  • ROI on IT spend 36% of manufacturing enterprises realize above-average business value from IT spending in digitalization at a reasonable cost (compared with peers).
  • Job recovery – Following a sharp dip in employment during early-mid 2020, manufacturing bounced back to pre-pandemic levels in mid-2022
  • Workforce changes – 38% of executives responding to a Deloitte survey reported attracting new workers as their top priority for the production workforce in 2022, followed by retention and reskilling
  • Increasing IoT investment – 45% of manufacturing executives surveyed by Deloitte expect further operational efficiency improvements in 2022 due to investments in IoT connected machines and automated processes

7 challenges for Industry 4.0 (and how to overcome them)

Although Industry 4.0 has come a long way in recent years, there’s still some challenges your organization may need to consider as part of your strategic approach. But it’s worth doing, because on the other side of these challenges, you can tap into a number of benefits and opportunities for your organization…

Technological obsolescence

There’s a myth that equipment in the manufacturing industry needs to realign with the pace of innovation in the tech industry. However, this couldn't be further from the truth. Equipment age is no barrier to implementing industry 4.0 solutions and there's no shortage of successful use cases to prove it. Most factory equipment is built to last for decades so it seems logical that industry 4.0 tech must be built to adapt to legacy gear.

When implementing Industry 4.0 tech it's important to consider what solutions might be required to future-proof your business. In practical terms, this might involve choosing technology that can be easily upgraded and scaled up, as well as platforms with flexible integration options. Start by considering what outcome you want to achieve from your Industry 4.0 implementation, who you’ll need to be part of the process, and how the changes might impact them. From there, you can explore technology that might help support your people to deliver the outcome.

Technology implementation

Many manufacturers often worry that there is also a long list of prerequisites for them to make the switch. The implementation of all base technologies (IoT, cloud services, big data, and analytics) tends to be a barrier for many companies to fully adopt and implement Industry 4.0. In particular, big data and analytics is often touted to be a gap for those in the manufacturing industry.

However, taking a phased approach means you don’t necessarily need all the base technologies to start seeing the benefits of new tech. Big data, for example, may not even apply to some smaller manufacturers. Taking a phased approach to the investment and roll-out means businesses can begin seeing the value almost immediately, helping to deliver that all important ROI. So, don't let the fact that you might not have all the base technologies deter you for adopting Industry 4.0 solutions.

Using best-in-breed vs. all-in-one solutions

In some cases, the excitement and hype surrounding industry 4.0 has led to manufacturers often adopting solutions that try to do everything at once rather than one thing really well.

You can read more about this in our article on Industry 4.0: Opportunities and risks for early adopters.

Fortunately, you can overcome this challenge by educating yourself on technology maturity and carefully trialing any new piece of technology before committing to it. You may also find that rather than finding the perfect all-in-one solution, it makes sense to use multiple technology solutions to solve specific problems or achieve specific goals.

Updating digital strategies and processes

Although some research looks at the technology barriers to Industry 4.0, it’s important to look at other issues at play. Manufacturers are increasingly concerned about data security and privacy issues, with 82% of surveyed manufacturing executives expecting to invest more budget into cybersecurity in 2022. To support their Industry 4.0 expansion, most manufacturers are spending more to bolster their existing cyber security processes and future-proofing themselves to become a smart factory.

Recruiting and training for new skills is not as hard as you think

The key to a successful Industry 4.0 implementation is always about involving the right people. However, today's best talent expects to have cutting-edge tools to give them every chance to succeed in their role. To remain competitive and position your business as an employer of choice, you'll need to invest in the tools required to help your workforce succeed. This will not only help you attract quality talent but also retain them as they succeed with the Industry 4.0 tools. If you are not investing in the latest real time insights and data analytics solutions, chances are you'll already be missing out on recruiting the best young talent.

Fortunately, most team members will quickly acquire the skills they need while on the job via easy-to-use software solutions — many of which offer user-friendly training. Plus, some manufacturers are incorporating conversational technologies, which can make it easier for operators to adopt new systems. This is an area that’s rapidly evolving and it’s likely that more operators will use voice-enabled assistants in the near future.

Reduced Complexity

The complexity to implementing Industry 4.0 was a challenge for many companies, but not anymore. It can be overwhelming to digitize and connect every part of your systems. You have to consider sensor data, control data, both old and new equipment, paper forms, various operational applications, office applications, data requirements, and how to keep it all secure and compliant. With the right support, you can break down the complexity so that it’s less overwhelming. And once you’re up and running, the right Industry 4.0 technology can actually help to simplify your work processes.

For example, automating steps based on events is a huge opportunity to reduce the complexity of Industry 4.0 right now. If [event] happens, this [process] must happen next < this simple instruction or workflow happens constantly in manufacturing environments. More manufacturers are relying on Industry 4.0 technology to automate based on events — increasingly linking different systems and processes together to eliminate manual steps.

Getting people onboard with change

Successful Industry 4.0 strategy always comes back to people. Not just your direct team, but all the people impacted by the potential change — and those who can also influence it. This includes your operators, quality control, maintenance engineers, schedulers, drivers, IT team, fellow management, and any external partners. Consider how their job may change, how the company structure itself may be impacted, and how each group may feel about the changes. Work with each stakeholder to communicate the situation, understand their concerns, and get their input on the process. 

This will have many benefits — not only are you more likely to overcome resistance and improve adoption, but you will find that team members will have valuable ideas to contribute that make your Industry 4.0 strategy more likely to succeed.

Plus, the best use of your Industry 4.0 tech capabilities will be to empower every team member to become more effective in their role. And it’s never too early to begin engaging with and empowering your team.

What’s needed: people-first strategy

It’s clear from the current barriers and opportunities that successful implementation of Industry 4.0 less of a focus on technology/solutions and more focus on people and strategy.

Hopefully we’ll see more research on this in the coming years. And more companies that adopt this approach in their smart factory strategy.

In the meantime, if you’re looking for an Industry 4.0 solution that’s designed to empower your people, why not try OFS? Take a look at our free 30 day trial or contact our team to discuss your specific requirements.