Unlocking Value in Digital Manufacturing projects
Inspite of the immense potential of Industry 4.0 and the ambient noise created around it, there has been very slow adoption of its technologies and digital manufacturing applications. Let’s make an effort to analyse, why? Post Covid executives have engaged in protecting their cash positions, rather than committing to significant fresh investments in new technologies. The trend suggests that they continue to focus even more on ensuring a direct link between the expected value and such investments.Every consultant talks about RoI but are unable to demonstrate RoI beyond Proof of Concept (PoC) stage. This paradox can be explained through a “cause-effect” concept. Poor Adoption of Digital Technologies in Manufacturing can be attributed to three distinct actors of the Digital Ecosystem including technology specialists, top management, and end users. Let us look at each actor individually, with regard to the lack of adoption of industry 4.0.
Technology specialists are unable to communicate value to end users effectively, so that the justification of investments are cleared at every stage of the progress. An “integrated” approach of all technologies both at “horizontal” and “vertical” system integration is grossly lacking with IoT experts pushing IoT technologies, AR experts pushing AR technologies, Dashboard experts pushing Data Analytics and so on.“Platform” developers claim to have many “solutions” packaged without clear understanding of the “problems” in the first place; as a result, end users criticise the lack of sectoral understanding in such platforms. Technology staff lack business experience in the various operational functions and hence are unable to understand the pain points of the customer. They are often too quick to send formats to get equipment details filled up for a OEE (Overall Equipment Effectiveness) improvement project, without going into the depth of which is the bottleneck equipment in a cell, work-center, or line that affects the overall capacity.Add to that the industry not having carefully hired and trained experts to deploy “appropriate” technology for different applications and the inability to calculate “cost- benefit” equations. It is a pity that today, only a few manufactures have the end-to-end perspective to handle digital technologies across the value chain using a holistic Product Lifecycle Management (PLM) approach.
Top management’s understanding and conviction about the benefits of the investment and the resources required to be developed for a successful implementation of Industry 4.0 is another dampener to its implementation. Industry 4.0 awareness has been more at a jargon level with no in depth understanding by decision makers and functional leaders about how it will benefit manufacturing. CTOs often confuse Industry 4.0 for just another IT project like in the ERP/SAP/MES, and focus more on the RoIand IT security aspects. Additionally ,CFOs have not had adequate training to understand operational benefits such as Overall Equipment Effectiveness (OEE), Cost of Quality (CoQ) etc and hence are heavily dependent on operational managers to calculate the “Value”.
The significant gap between Digitisation, Digitalisation and Digital Transformation must be bridged to make the Digital Manufacturing projects meaningful and sustainable
The third and most important factor in this ecosystem who affect the seamless implementation of Industry 4.0 is the End Users, who do not have the ability to implement the technology beyond POC. The main reason for this is that most projects are conceived in silos as “point solutions” within the various functions or departments with no organisation wide visibility.Many departments conduct their own initiatives of Industrial Internet of Things (IIoT), with limited communication with other departments. PoC is based on measurements of the benefits within the ambit of the department and does not capture the challenges of scaling up especially with regard to cultural transformations, measurements of benefits, and the varying levels of automation in the manufacturing value chain. Lack of Lean practices make the improvements that can result from implementation of Industry 4.0 murky as the “process waste” is only amplified rather than eliminated. Another issue is that End Users measure mainly manpower productivity gains but miss out bigger impacts on Asset Downtime, Material Traceability and Cost of poor quality and are unable to get the top management’s support to scale up across the machines or across the shop floors or across the plants due to their in ability to project the gross impact in financial terms.
From a technology perspective, everything is doable. The only questions are what it costs and what does it bring. Consequently, manufacturers looking at IIoT solutions must focus on first, why it should be done, and next, how it should be done. This relates to a single word, value.Adopting a value-based model to decide on digital investments is an emerging approach to the new normal. It has proven, even prior to the pandemic, to be the most effective way to drive innovation in complex industrial scenarios.The significant gap between Digitisation, Digitalisation and Digital Transformation must be bridged to make the Digital Manufacturing projects meaningful and sustainable. Creating a tight connection between the expected outcomes of the solution and the business objectives of the organization helps to qualify each step as valuable to the company's long-term goals.
(The author AN Chandramouli, is the Chairman of Industry 4.0 Committee of Bangalore Chamber of Industry & Commerce, Strategic Advisor of Advanced Manufacturing Systems for Tata Indian Institute of Skills and Industry 4.0 member of Capital Enhancement Committee of Department of Heavy Industries).
Mr. AN Chandramouli, Chairman of Industry 4.0 Committee of Bangalore Chamber of Industry & Commerce, Strategic Advisor of Advanced Manufacturing Systems for Tata Indian Institute of Skills and Industry 4.0 member of Capital Enhancement Committee of Department of Heavy Industries, has a demonstrated history of over 36 years working in multiple Industry domains including Consumer Durables, Electrical Switchgear, Industrial Refrigeration and Machine tools. AN Chandramouli is a highly networked professional with several Industry bodies such as IMTMA, CII, BCIC & QCFI qualified with a Master of Business Administration (M.B.A.) from Indian Institute of Management, Calcutta and Mechanical Engineering from NIT Tiruchirapalli.