The bumpy road to Industry 4.0

The old world is dead. Digitalization is everywhere. And companies have to strike out on their own digital path. For industrial companies, this means embracing Industry 4.0. But before diving into this new adventure, there are two lessons from the 3.0 era you mustn’t forget.

Unless you’ve been living in a cave for the past couple of years, you can’t have missed the new trend that has spread all over companies—from strategic boards, the net, press releases and LinkedIn profile updates to TED talks: the old world is dead. In the new one, digitalization is everywhere. And companies have to strike out on their own digital path. For industrial companies, this means embracing Industry 4.0.

In the ’80s, we had to be global. In the ’90s, we had to think global but act local. In the noughties, we had to be green. And now, we have to be disruptive. The new world to which industrial companies have to adapt was branded Industry 4.0 in 2011 by the German government.

Beyond the marketing buzz, there is a genuine trend here….

3.0 was about computers and automation. Let’s focus here on “computer-ization”—it was certainly not an easy ride.

1. We often forgot the groundwork: For those of you who can remember, we often used to rush into the last step without doing the groundwork first. For years, we burned cash and time on ERP/IT system implementation because we were focusing on IT solutions instead of on performance, process and then system, before eventually arriving at IT solutions. We spent months customizing standard systems instead of challenging our “back-then” way of operating.

2. Then, the challenge was cultural: If you discuss the process and system implementation with Lean, IT or Quality SMEs, you may get the same overwhelming response. Either there was no process or system defined. Or it was defined but not documented. Or it was defined and documented but then locked in a cupboard. When you asked most shop-floor employees what the purpose of such a document was, most of them would answer “for audit only.” From a data standpoint, when a piece of data was available, it was a struggle to transform it into information because of weaknesses in the data flow or—again—missing documentation regarding its true purpose. Initially, firefighter reactiveness and word-of-mouth knowledge transfer were valued, and we gradually moved toward a world driven by continuous improvement, best-practice sharing and data-based decision-making processes. In some organizations, this cultural movement is still going on.

Yes, Industry 4.0 is about technology, but it still has a lot to do with data or decision-making process design. This is especially true for vertical integration, horizontal networking and through-engineering.

To us, there are two key success factors:

1. Lean principles and process design remain major cornerstones of Industry 4.0.

We don’t talk about Lean programs on the shop floor or at the manufacturing plant level like we used to do. We need to move to a higher league.

• At a company level, by designing end-to-end processes that connect all the dots along the supply chain.
• At a multi-player level, by designing interconnected end-to-end processes between several organizations, either between horizontal partners or between different vertical stakeholders along the value chain (supplier, third party, customer, end-user).

At Bluecrux, we can help you to craft the new operating model via strategy and design workshops, business validation and hands-on implementation.

2. The cultural change.

What we initiated during the 3.0 revolution is still valid: performance, process and system thinking through lean and continuous improvement remain key. The rules of the game have changed, however. The playground is no longer the shop floor; it is the sum of interconnected shop floors. End-to-end integration requires you to embrace a more open and collaborative way of designing and then operating beyond the confines of a given facility or company.

At Bluecrux, we can help you to create a powerful change organization by coaching change agents on both the hard and the soft aspects of change.

In conclusion, we believe the technology for Industry 4.0 is indeed the new Holy Grail—but don’t underestimate the investment required in process design and change management. Don’t fall into the same trap twice! Both represent major opportunities and will be understood as complementary levers.

Eager to find out how you can turn the Industry 4.0 concept into a concrete, hands-on reality in your organization and boost your operational excellence? So are we!

For our approach to process and system design in manufacturing, contact Anouk Schoenmakers.