I also made the point that the key to successfully achieving these goals was not technology but collaboration, and stressed the need to break down traditional silos.

In this second article I will discuss these topics in more detail and explain why I believe they are critical to success.

The Advice Of Henry Ford

There is a quote attributed to Henry Ford that I believe holds the key to the future success of manufacturing.

It can be used to change our thinking during the current crisis and provides the basis for successful recovery, and the adoption of Industry 4.0.

Even more interestingly, it also has the potential to unlock significant value from an organisation鈥檚 legacy investments.

These are bold and potentially career ending statements. So, before I tell you which quote I am referring to, I need to provide the context and the rationale behind such a claim.

To understand where we are today, we first need to look back to see where we came from.

Historic Trends In Manufacturing Pre Industry 4.0

Over the past 30 to 40 years, global manufacturers have followed four major trends in parallel that have been aimed at improving their manufacturing performance:

1. Strategy

In its simplest form, manufacturing strategy is essentially what to make, how to make it and where to make it. Strategy is influenced by a huge range of internal and external factors. Pre 2020, the typical examples I used to illustrate strategic influences were sustainability, the circular economy, Brexit, changing consumer behaviour, disruptive business models, trade wars, emerging markets, workforce skills, labour, energy and material costs.

Strategic factors drive mergers, acquisitions and divestments, new market entry, new product development and capital investment in manufacturing facilities.

The objective is to gain a competitive advantage from manufacturing operations in whatever form that takes for the organisation in question, such as increased market share, cost reduction, product quality, shorter time to market and product innovation.

A look at any global manufacturer鈥檚 history will provide an example of this trend. Clearly, the current crisis will have the biggest impact on manufacturing strategy we have ever witnessed.

2. Operational Excellence

The second major trend has been the introduction of Operational Excellence programs. Most major manufacturers have their own internally branded methodology but the core principles can be traced back to the fundamentals of Taylor, Ford, Shingo, Toyota Production System, LEAN, Six Sigma and Theory of Constraints.

Examples of these tools and techniques can be seen in action during a walk around most production facilities.

3. IT (Information Technology)

The third major trend aimed at improving manufacturing performance has been the investments made in information technology. In this definition I am referring to the solutions that typically fall into the domain of the CIO and the 鈥業T鈥� department. ERP, CRM and SCM applications, IT infrastructure, networks and platform standards to name just a few. These enterprise level IT systems have a huge impact on manufacturing performance because they are the solutions that run the supply chain outside of the 鈥榤ake鈥� activities. They capture demand, plan production, procure raw material, manage WIP, store finished product and transport it.

4. OT (Operational Technology)

The fourth major trend has been the investments made in Operational Technology. Operational Technologies are the solutions that perform the 鈥榤ake鈥� activities inside the four walls of the factory and this is normally the domain of the engineering department. OT includes instrumentation, measurement & control, automation, PLC鈥檚, HMI, SCADA, DCS, historians, APC, batch control, , LIMS and OEM equipment. These investments were centred around capacity increases, quality improvements, process optimisation, labour savings and waste reduction.

The Results – Falling Short Of Expectations

Most organisations can see clear improvements in manufacturing performance that are directly attributable to each of the four investment areas. Manufacturing has made huge strides during this time period and is clearly far more efficient and effective than it was.

However, the overwhelming feedback is that none of the four investment areas have fully delivered on their potential. The manufacturers didn鈥檛 quite achieve the level of manufacturing performance improvement they expected and their current KPI鈥檚 still show that there is room for improvement.

Why Is This The Case?

In a word – silos. Not just internal departmental silos in the manufacturer鈥檚 own organisation but silos in the external ecosystem of suppliers.

Internal Dynamics

Let鈥檚 begin by looking at the internal dynamics inside a typical manufacturer.

Strategy

The strategic manufacturing goals and objectives are cascaded down from CXO level to Plant Directors and manufacturing teams.

Operational excellence

The operational excellence program provides the principles, tools, and methodologies for manufacturing to utilise in the pursuit of performance improvement.

The business looks internally to the IT and engineering functions for solutions that will provide both the information and processes needed to support manufacturing鈥檚 objectives.

IT

As mentioned previously, IT provides many of the core Level 4 solutions in the classic ISA95 model. On a typical manufacturing site, it is IT solutions that provide the production planning, warehousing, logistics and financial reporting systems. The choice of technology, vendor and implementation partner together with the budget normally rest with IT.

OT

OT is the domain of engineering. Process, chemical, mechanical, electrical, and automation engineers to name just a few. These are the people that design and build new production facilities. Whether that is a car production line, soft drinks, chemicals or pharmaceuticals. As with IT, the choice of technology vendor, implementation partner and budget normally rest with engineering.

In my thirty years of experience, IT and engineering have not collaborated particularly well. In many cases they appear to be in 鈥榗ompetition鈥� as they champion different solutions to solve the same business problem. At times there also appears to be a lack of understanding of their respective domains. This is understandable as the roles within each domain have their own full-time education and career paths. The example I often use to illustrate this point is their respective interpretations of the term 鈥榬eal-time鈥�. Real time in the world of IT is a transaction. Something has moved from A to B and has a different value (e.g. WIP). In the world of engineering, real-time is usually millisecond scans on a process to ensure it is in control.

The net result is that these internal frictions and challenges often leave manufacturing operations without the solutions they need to hit their goals and overall results tend to plateau below expectations.

External Dynamics

Let us now look at the dynamics of the external ecosystem of suppliers.

Strategy

The dominant players advising on strategy in the C-Suite are the 鈥榩ure鈥� consulting firms such McKinsey, BCG, Bain, AT Kearney and Bearing Point. In addition, there are the advisory arms of the 鈥榖ig four鈥� and the consulting arms of the large system integration companies.

IT

In the traditional IT ecosystem you will find the major enterprise software application vendors, their integration partners and a wide range of hardware and platform providers.

OT

In the OT ecosystem we find a very different set of hardware and software vendors. The implementation partners differ and OT is also where we find the OEM鈥檚.

Operational Excellence

The Operational Excellence ecosystem is largely populated by consultancies who provide professional services that specialise in teaching and implementing Operational Excellence techniques and programs.

In many respects, the external ecosystem of suppliers is a mirror image of the silos found inside manufacturing. Again, my experience leads me to believe that there are very few manufacturers who have fully broken down both the internal and external silos and optimised their investments in these four areas.

The point to emphasise here however is that what we are still discussing is Industry 3.0.

In recent years, the picture has become more complicated by the advent of a fifth global trend – Industry 4.0.

The Emergence Of Industry 4.0

The past decade has seen the emergence of a range of disruptive technologies such as AR/VR, AI/ML, IoT, 3D printing and several others. When grouped together and applied in a manufacturing context we have the basis of Industry 4.0.

The Industry 4.0 market however is emerging and immature. The Industry 4.0 鈥榳hite space鈥� is being entered by most of the established strategic consultancies as well as the traditional IT and OT ecosystem players. This area has seen the emergence of the hyperscalers together with a large number of start-ups. Acquisitions, mergers and failures are a regular occurrence and this will continue to be the case until the market consolidates.

This is an exciting area to be involved in and I genuinely believe that the potential value Industry 4.0 offers manufacturers is enormous.

My prediction however is that on our current path, investments in Industry 4.0 will also fall short of expectations. They will be investments that again underdeliver against both their potential and promise.

Why Do I Think That?

Silos – nothing has fundamentally changed as the pre-Industry 4.0 internal and external silos are still largely intact.

The players are still grouped into their traditional domains and following their established business models. We now have the added complication of Industry 4.0 which is blurring the lines but in many ways it is also making things more difficult for manufacturers.

An audit of a typical manufacturing facility today will illustrate the large number of players who currently have an influence on manufacturing performance.

The facts are that each supplier has significant value to bring to the equation. Clearly there are some areas of overlap but once the competitive process is completed, there is no reason not to co-operate as that is in both the manufacturers and supplier鈥檚 best interests.

Achieving this goal is challenging but not impossible.

The Future

Most articles currently being published during the crisis recognise that a major rethink of global manufacturing supply chains will be required in what is being termed 鈥榯he new normal鈥�.

It is my contention that radical change and 鈥榯he new normal鈥� should not just apply to manufacturers. It should go much further and apply to the entire ecosystem of suppliers. We must break down the competency silos and the competitive 鈥榓rms-length鈥� way of working.

To me, it seems totally illogical to expect manufacturing to successfully execute a paradigm shift while the ecosystem of suppliers remains fundamentally unchanged. My firm belief is that the successful recovery we all need can only be delivered through a major change of approach in the supplier ecosystem. It should be an approach based on collaboration and co-opetition.

In this article I have discussed the internal external dynamics and advocated a major change of approach.

So, what was the quote from Henry Ford that encapsulates the entire message I am trying to convey to manufacturers and suppliers alike?

鈥淚f you always do what you鈥檝e always done, you鈥檒l always get what you always got鈥�

This crisis will require us all to do things differently in the future and we have to perform better than we did before.

Identifying the problem was the easy bit, the more difficult part is making it happen. That is what comes next.

*In this time of uncertainty, we are opening that can help employees, companies, communities, and governments continue to move forward.

This article first appeared on The Future Factory

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The post The Key To Manufacturing Recovery And Industry 4.0 Adoption: The Advice Of Henry Ford appeared first on 51风流UK News Center.

Prior to the crisis, was an area of great interest to many . It was an exciting topic with huge potential benefits and was seen by many as a 鈥榩ositive鈥� and future thinking topic.

Today, many of us are focussed on the here and now. Our health and the health of our family, friends and colleagues. The ability to access the food and supplies we need. Our job security. The financial impact on our employers, our clients and our partners. Beyond that we also have to consider the wider economic impact and the unknown amount of time it will take for things to return to some level of normality.

At this point in time it seems insensitive and inappropriate to discuss in the way it was discussed pre crisis. The business drivers of Industry 4.0 pre crisis were focussed on competitive advantage, cost reduction, productivity, sustainability and innovation.

The goal was to make well run businesses run better.

The focus for many manufacturers now is survival first and foremost and then beyond that, damage limitation.

The immediate financial impact on manufacturers is already resulting in a huge reduction in non-essential spending and investments. Many Industry 4.0 solutions currently being considered or being deployed fall into the category of non-essential business activities.

This raises a few challenging questions that I have asked myself as someone dedicated to manufacturing and Industry 4.0:

Is Industry 4.0 even a topic manufacturers should be thinking about?

Is Industry 4.0 relevant anymore?

If it is relevant, why is it relevant and what role does it have to play moving forward?

The short answer is yes, I believe Industry 4.0 is not only as relevant as it was before, I believe it is actually far more relevant moving forward and I would like to explain why.

The priorities for most manufacturers today fall into three distinct phases:

• Phase 1 Survival
• Phase 2 Recovery
• Phase 3 Business as Usual in the new post crisis paradigm

The goal for all manufacturers will be to get to Phase 3 as soon as possible and at the lowest cost. In defining the operating model for Phase 3 they will factor in lessons learned from the crisis and try to build a more resilient and agile business. They will be asking themselves some fundamental questions such as:

• Where were the weaknesses?
• Where did they make costly decisions and why?
• What would have helped?

I believe that the key finding will be that the systems and processes in place were not fit for purpose. It is too early to say for certain, but it seems clear from events unfolding before us that one of the major weaknesses is a lack of real time visibility across the business. Visibility that is essential to support critical business decisions. Examples are:

• What is the demand for products and where can we manufacture them?
• What are our current raw material, WIP and finished goods inventory levels?
• What is our manufacturing capacity, both in terms of human resources and asset availability?
• What is our spare part inventory and where are they?
• Where are our raw material shipments and what alternatives do we have?
• How is our finished goods distribution network operating?

Most system architectures currently consist of a heterogenous mix of applications and data silos. This architecture results in latency of information and a lack of a single real-time view of the business status. As soon as this architecture was tested beyond its normal operating conditions it failed, and this is why it is not fit for purpose.

I believe that another key learning from the crisis will be driven by manufacturers鈥� reliance on human capital and the impacts of social distancing. If we go one level deeper than the supply chain view then manufacturing in particular will be highlighted as a big area for improvement.

During the crisis, production plans will have been changing on a much higher frequency as a result of changing demands, availability of raw materials, availability of key staff and availability of assets. Manufacturing has a much higher volume and frequency of 鈥榯ransaction鈥� than the supply chain. Manufacturing is real-time, not near real-time.

As I write this today, the recovery phase is still an unknown amount of time away on the horizon.

When manufacturers do begin to move into the recovery phase, they will still be asking the same questions they are asking during the crisis highlighted above.

Eventually, we will reach the new normality and manufacturers will be keen to make sure this cannot happen again.

The role of Industry 4.0 in the future

has a different role from today onwards. Its role should be:

1. Help to make sure that more companies survive
2. Shorten the recovery phase and help return businesses to normal operations as soon as possible
3. Provide the platform to develop new, more resilient businesses in the medium to long term

Industry 4.0 can achieve this because many of the capabilities it offers could have greatly reduced the impact of this crisis on us all. Just a few examples are:

• Real-time visibility into the availability of raw materials, finished goods, WIP, people and assets
• Use of Artificial Intelligence and Machine Learning to constantly reassess and re-plan activities
• Robotic Process Automation to support nonvalue add labour intensive activities
• The use of mobile technology, Augmented Reality and Virtual Reality to enable workers to perform tasks they were not trained for more easily. This could have assisted with skills shortages due to self-isolation or repurposing of manufacturing
• The same technologies together with digital twins and remote support from OEM鈥檚 would improve availability of assets
• The same technologies could also have enabled more remote working and virtual working to help with the issue of lockdown and social distancing
• 3D printing of spare parts that were stuck in the supply chain
• Use of AGV鈥檚, autonomous electric vehicles and drones to again reduce the reliance on people and to further assist with social distancing.

Many of these technologies and solutions were seen as a nice to have. Many were waiting to 鈥榗ross the chasm鈥� into mainstream adoption.

Rather than retreating away from them, I believe we should be thinking about how we can use these technologies now and in the future.

Can any be deployed to help deal with the crisis?

Beyond that, how can they be used to help us recover more quickly and develop more resilient and robust businesses that are better equipped to deal with this level of disruption in the future?

There is one other critical factor in navigating our way out of this. I have felt for a very long time that the key to successful digital transformation was not technology but collaboration.

We need to break down the traditional silos both within organisations and in the external supplier ecosystem. I don鈥檛 think this has ever been truer than it is today and the fact that I can see it happening in so many different areas gives me a lot of hope.

I do not have all of the answers, none of us do. What I do have are lots of ideas, a desire to make a difference and a willingness to listen.

*In this time of uncertainty, we are that can help employees, companies, communities, and governments continue to move forward.

This article first appeared in The Manufacturer

The post What Is The Future For Industry 4.0 In The Post Covid-19 Paradigm? appeared first on 51风流UK News Center.