8 December 2020

Industry 4.0 - The 4th Industrial Revolution?

Which of these forty-year-old IT predictions have become universally true?

• One-per-desk computer terminals? -
  Yes
• Paperless offices? -
  Rarely
• Lights-out-factories (i.e. no operators)? -
  Very few
• Work finishing on Thursday afternoon because there would be so much less work to do? -
  Sadly, not in my experience!

With Industry 4.0 these predictions (except finishing Thursday afternoon) could become reality. Industry 4.0 is described as the "4^th Industrial revolution" and sometimes referred to as "Smart Factory" was initiated by a German government sponsored working group, including well-known IT and industrial control companies.  

With the 3^rd industrial revolution we have seen Just in Time, Total Quality, Total Productive Maintenance, Lean-Six Sigma and other concepts, although the roots of these ideas have been around much longer and will continue to evolve.

Until now, ambitious expectations that MRP, MRPII and then ERP management information systems could co-ordinate manufacturing activity has been frustrated by slow, inaccurate and usually manual data collection and by underpowered computer systems that were unable to sense and respond quickly to rapidly changing customer demand, material supply problems and shop floor performance. 

Technology has removed these limitations. Internet of Things (IoT) enables detailed, up to the minute communication between machines and computers using inexpensive wireless and sensor technology.  Computers are powerful, small and inexpensive enough to process large amounts of data in almost real-time and model production systems in virtual-reality.  Artificial Intelligence allows programs to be self-learning and select the optimum plans from multiple alternatives. These technical advances underpin four design principles in Industry 4.0:

Interoperability - interconnection of machines, equipment, people and systems

Information Transparency - virtual reality modelling of physical systems with real-time information of what's happening in the physical world

Technical Assistance -  visualisation of situations and information to enable humans to solve problems and automate boring, unpleasant and unsafe tasks.

Decentralised Decisions - decision making automatically and as low down in the system as possible.

Will it work?

Spending money on Industry 4.0 technology without implementing basic good manufacturing practices is like giving an unskilled driver a Ferrari.  The results are likely to be disappointing. 

To benefit from Industry 4.0, companies need to first get the basic manufacturing conditions right.  Implementing these practices significantly improves business performance, even without Industry 4.0:

• Ensure senior management understand how Industry 4.0 will benefit their business and is committed and supportive to its implementation. Simply signing orders for kit and systems without senior management understanding and leadership is the biggest cause of failure.
• Identify the most important product groups and organise production by value stream instead of process.
• Use existing information and IT to measure and compare customer demand against production capacity.
• Engage, train and motivate employees to confidently perform their roles and contribute to continuous improvement.
• Identify and fix production processes that are unreliable or not capable of producing product to within acceptable tolerances.
• Implement workplace organisation so that only necessary equipment and materials are on the shop floor, everything has a place and it is easy to see if something is missing or not required.
• Identify critical quality, cost, delivery and human performance factors and implement meaningful Key Performance Indicators (KPIs). Ensure KPIs are regularly reviewed and employees are involved to drive improvement. Don't use KPIs as a tool for blame.

Companies who have successfully implemented Lean will recognise this advice.  Almost all these Industry 4.0 prerequisites can be implemented without large capital expenditure but it's hard for companies without management discipline and commitment.

So far, most Industry 4.0 applications have been in advanced manufacturing companies with strong financial and technical resources and commitment such as pharmaceutical, automotive and defence. IT and sensor systems for implementing Industry 4.0 has been expensive and supplied by large international companies.

Industry 4.0 is complicated, so it makes sense to implement gradually starting with automated data collection which can progressively be fed to sophisticated planning and co-ordination systems. Until recently data transparency has been restricted, making cross system integration difficult. But systems are now becoming available which are opening the way for well-organised smaller companies to implement and benefit Industry 4.0 in progressive stages.

About Matthew Peacock

Matthew was Lead Consultant with Vision in Print and previously a senior operations manager and MD in manufacturing companies.  He is a founder-director for Active Data Metrics Ltd, specialising in developing cost-effective productivity data collection and analysis systems.  He continues to provide practical process improvement support in manufacturing companies by training and engaging people to make continuous improvement.