Companies in most industries have been on a digital transformation path for several years, seeking to optimize their operations, reduce cost, improve customers’ satisfaction, and grow revenue. This trend has accelerated over the past few months as companies realized the shortcomings of their existing operational frameworks in dealing with the sudden and pervasive market disruptions, as new business models start to emerge in many industries that are rooted in their reliance on digital enablement, and as the enabling technologies start to mature and be market tested.
Industry 4.0 & inflection points
The inflection point of a curve is the point where the curve takes a considerable change in trajectory. The change can be either upward or downward.
While Industry 4.0 technologies proved critical to early adopters in their crisis responses, the pandemic has also forced companies to reevaluate the progress of their own digital transformations. Compared to last year, our research reveals a significant drop in respondents’ assessment of their organization’s maturity. The number saying they had successfully scaled some or many Industry 4.0 use cases was down by more than 40 percent
Industry 4.0 at ACG, a case in point
Industry 4.0 refers to a new phase in the Industrial Revolution that focuses heavily on interconnectivity, automation, machine learning, and real-time data. Industry 4.0, also sometimes referred to as IIoT or smart manufacturing, marries physical production and operations with smart digital technology, machine learning, and big data to create a more holistic and better connected ecosystem for companies that focus on manufacturing and supply chain management. While every company and organization operating today is different, they all face a common challenge—the need for connectedness and access to real-time insights across processes, partners, products, and people.
It was a busy day at ACG’s capsule manufacturing facility. The maintenance team received an email and SMS alert on the increasing trend in the energy consumption in capsule manufacturing machines in one of the production halls. The machine learning algorithm had analysed and detected an anomaly in energy consumption, considering the machine operating data, production data, energy consumption data, local weather data, benchmark data from similar machines and SKUs (stock keeping units).As soon as the anomaly was detected, auto root cause analysis was triggered to give clear and actionable insights to the end user. In this case, the root cause was the malfunctioning of heating coils. These heating coils were drawing more than normal current in the context of the SKU under production.
People and change management
Industry 4.0 is a huge change initiative encompassing technology, process, and people. Effective people and change management practices have helped us steer our Industry 4.0 journey in the right direction. Our change management is focussed on five Cs – Clarity, Consistency, Commitment, Capabilities, and Consequences.
To bring in clarity and consistency, we conducted several training sessions and workshops to create awareness about industry 4.0 and its relevance for our business. To drive commitment and accountability, a ‘hub and spoke’ organisation was created with clear ownership and goals aligned with our annual performance appraisal process. Review and governance mechanisms were set up with the top leadership of the organisation. Our rewards and recognition programme helped further improve motivation and commitment.
Benefits of Adopting an Industry 4.0 Model
Industry 4.0 spans the entire product life cycle and supply chain— design, sales, inventory, scheduling, quality, engineering, and customer and field service. Everyone shares informed, up-to-date, relevant views of production and business processes—and much richer and more timely analytics.
It makes you more competitive, especially against disruptors like Amazon.
It makes you more attractive to the younger workforce
It allows you to address potential issues before they become big problems.
It allows you to trim costs, boost profits, and fuel growth.
The way forward
So far, our Industry 4.0 journey has yielded significant benefits in reducing downtime, enhancing OEE, reducing lead time, optimising energy consumption, enhancing capacity, reducing defects, improving first pass yield, reducing set-up times, and much more.While the current focus is on transforming operations, ACG is expanding into building smart connected products and services, developing delightful customer experiences, and creating digital led business models. The future is bright. The future is digital.
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