As companies leverage Industry 4.0 to create competitive advantage, today’s manufacturing leaders are in the midst of the most meaningful business transformation to occur in their lifetime. Industry 4.0 and its exponentially growing technologies accelerate not only the rate of change in manufacturing but perhaps most importantly, the scale of change. Early adopters have already realised significant benefits, including increased asset efficiency, improvements in cost reduction, and a more flexible supply chain. In particular, the enterprises with at-scale deployments are achieving double-digit improvements against KPIs like factory output, inventory levels, and lead time.
Results like these create a seismic shift in industry-wide operations and advance the competitive baseline. But while early movers drive significant benefits, many have yet to realise digital transformation’s full potential. Even the manufacturers running a variety of Industry 4.0 initiatives struggle to scale out of the pilot stage. Failure to drive change at scale jeopardises the enterprise’s position as an industry leader. So, what is causing this disconnect and how can manufacturers overcome it?
The chasm between initiating pilots and achieving value is a result of three interrelated challenge areas:
Many companies begin their digital transformation with a tactical, technology-focused approach that identifies, evaluates, and pilots technologies as a series of isolated projects. This approach excludes business impact, complicating the ability to scale and achieve ROI.
A technology-first approach fails to account for the resources needed to unlock value, creating a digital talent gap among existing personnel. Even when the initial pilot is deemed a success, this lack of skilled personnel complicates the enterprise rollout.
Without a focus on value, there is a lack of company-wide prioritisation of the most beneficial and repeatable use cases. Without a scaling plan in place, the pilot’s sponsors discover too late in the project that these operational challenges have become compounded.
Having reached the inflection point, manufacturers need a future-proof method of unlocking the double-digit impact of Industry 4.0. To achieve value at scale, InVMA provides strategic guidance and enabling technologies to help manufacturers align their pilot initiatives to drive cost-per-unit impact. From our deep experience and broad industry perspective, we generated a step-by-step framework to unlock value creation:
With a technology-first approach, digital transformation leaders often fail to socialise how their initiatives align with overall corporate goals. If pilot outcomes stay confined to the plant floor and aren’t articulated upwards, it creates an internal perception that executives cannot support or justify the initiatives at enterprise-scale. This impedes decision-making and leads to a longer delivery, causing the pilot to languish in purgatory and the firm to lose competitive advantage.
The goal is to establish the connection between financial outcomes and the operational improvements and create closed-loop, executive-level communications that put financial-impact at the center of digital transformation.
Utilising InVMA’s Discovery Workshop, companies can determine the greatest areas of opportunity by aligning their I4.0 initiatives to their top-level business priorities.
Enterprises eager to get digital transformation underway typically employ use cases with a technology-first approach rather than identifying digital solutions based on process constraints. On average, manufacturers end up running an average of eight transformation-related pilots across their operations that each takes up to six months but 75% fail to implement at scale. This rate of deployment makes it difficult to achieve the speed needed to execute and achieve value at the enterprise-scale.
The solution is to position the enterprise to achieve value rapidly by establishing a prioritisation model that develops each I4.0 initiative with a focus on constraints and deploy the projects in an agile, iterative manner.
Following a standard sequential deployment process, manufacturers typically apply a digital technology pilot on one line within a single plant, lasting between three and six months. If a plant with ten production lines maintains this deployment pace, manufacturers need three to five years to roll out pilots to the remaining nine lines. Implementing in a serial fashion would take decades to scale deployments across the global enterprise, making it impossible to sustain the momentum needed to achieve meaningful business impact.
You need to rxpedite value creation through enterprise-wide digital transformation by simultaneously rolling out capabilities across tens of plants and reducing the deployment time in subsequent sites from decades to 24-36 months.
At InVMA we deliver an iterative approach to scaling pilots, exploring additional use cases, and expanding geographically.
Where is your company on the path to transformation?
We are in the midst of a digital revolution that is disrupting businesses across all industries. Enterprise companies today need a clear strategy to drive better outcomes, achieve greater efficiency, and create better customer experiences.
This whitepaper covers: