Georgio Stergiou MBA BEng
Industry 4.0 paradigm change - Simple and easy insights in 4 areas for a successful transition
Recently I attended an industrial cluster meeting. The place was packed, and I mean there were people standing on the staircase. The topic was Industry 4.0. The panel included three representatives of the biggest global manufacturers of industrial software solutions. During the meeting, the heads of IT off two of the country’ industry leaders presented. Never before have I seen a more honest and to the point presentation of the challenges that those companies are facing right now. They were asking for help and were looking for Industry 4.0 solutions. However, none of the industrial software giants were able to address the challenges mentioned.
Looking at Germany, the leader of industry 4.0, statistically 9 out of 10 German industrial companies believed that digitization offers more opportunities than risks. So if more businesses see digitization as a winning proposition, with potential value add-ons why is it such a challenge to move into the new industrial revolution?
What is Industry 4.0
Industry 4.0 focuses on the end-to-end digitization of EVERYTHING, connecting and integrating digital environments with value chain partners. It focuses on industrial purposes (vs Internet of Things – IoT, which is for consumer purposes) and networks a wide range of new technologies. It creates value by generating, analysing and communicating data seamlessly. This interaction of hardware, software, and humans is very important. Especially the human machine interaction.
The Industrial Internet of Things (another name for Industry 4.0) is a different mind-set, a philosophy supported by technology, allowing total transparency, efficiency, and empowerment of people and companies.
The new industrial revolution will bring 4 big disruptions.
1) The rise of data volumes, Big – Data,
2) Computational power and connectivity increase,
3) Analytics and Business-Intelligence of Big-Data and
4) New forms of human-machine interactions and a transfer of digital instructions to the physical world.
Those disruptions require alternative styles of thinking. A paradigm change.
The concept of paradigm change
A paradigm shift is not only about what we experience and how we feel. It is about facts and the changes our experiences create within us, altering the way we feel and interact with the world. This has a direct effect in our decision that we take. Decisions that impact performance, sustainability and growth, both on a personal and a company level.
When we talk of a paradigm change in technology, like Industry 4.0, the tendency is to look at scientific and technological trends that involve new thinking. However, a paradigm change does not always represent a change in science and technology. It mostly represents a change in humans’ mentality. New information engages the mind, events engage the emotions and emotional shifts force people to expand or contract.
As with the optical illusion picture of the duck of “Rabbit and Duck” from the 1892 issue of Fliegende Blätter, it can be both a rabbit and a duck. It all depends what you choose to see. If you want to soar the skies, probably you will first see the duck. If you want to hop across the fields, then the rabbit is the first you will see.
Normal practices do not mean at all a practice guided by a coherent system of rules, on the contrary, the rules can be derived from the paradigms, but the paradigms can guide the investigation also in the absence of rules.
Why is a paradigm change so much needed for a successful Industry 4.0 transition?
Successful Industry 4.0 transition requires flexible tools. Agile smart software solutions empower you with optimal interoperability and transparency, in real-time (instantly). Most classical software solutions, (ERP, MES for example) do not offer those capabilities. Thus the challenge for most companies who want to transit to the new industrial revolution. They must look and think outside the box, change their paradigm, examine a new generation of software.
This new generation of smart and agile software solutions of which some are known as Enterprise Management Solution (EMS) operate differently. They help companies overcome communication and data quality limitations which classical ERM and MES systems have. Only then companies will be lead to:
1. Digitization and integration of value chains
Vertically across entire organization, from product development and purchasing, through manufacturing, logistics, and service. Horizontally from suppliers to customers and all key value chain partners.
2. Digitization of product and service offerings
Expansion of existing products, as well as, creation of new digitized products, which focus on completely integrated solutions. Integrating new methods of data collection and analysis, to refine products in order to meet the increasing needs of end-customers.
3. Digital business processes and customer access
Disruptive digital solutions where business models generate additional revenues while optimizing customer interaction and access. Digital products and services look to serve customers with complete solutions in a distinct digital ecosystem.
So why does Industry 4.0 require a paradigm shift? Can “normal” (pre-existing/defined”) practices help us comply with new situations and needs, for example Industry 4.0?”
It is important to keep in mind the say that goes along the lines… if nothing changes, nothing changes. The old “safe”, has low value, while the new paradigm can lead to a competitive advantage. What if challenges are opportunities in disguise?
What does a company require from Industry 4.0?
Companies want added value support, which result in reduced complexity, maximum transparency, digital empowerment, interoperability between different software solutions and efficiency.
Industry 4.0 requires a new way of thinking. This leads to new actions, interactive leadership styles, empowering companies with new strategies, innovation and problem-solving capabilities.
How can a paradigm change help with Industry 4.0
I will examine 4 separate parts of the support a company might need for successful and efficient Industry 4.0 transition.
1. Industry 4.0 transition support
2. Industry 4.0 consulting
3. Smart software solutions and
4. Services (augmented).
Let’s look at each one of them separate
1. Industry 4.0 Transitions Support
Educating your people on how Industry 4.0 adds value, is a challenge. People do not like changes. Many concepts about the new industrial revolution are misunderstood. Industry 4.0 transition affects employees, customers, suppliers, assets, and management. The key is to help everyone understand the benefits of new, innovative and improved business processes and how those will help their lives long term, changing their workload and opening up new career growth possibilities. It will also require a different type of expertise.
To help you with this, have a focus point, for example, what is the added value to your people. They are of outmost importance when realizing a sustainable transformation into industry 4.0.
How? Focus on mind-sets and paradigm shifts, including the conceptual awareness of your team, in optimizing your processes, at every level in your company. Some of the packages that you should consider are:
· Initial Workshops - What is Industry 4.0, the paradigm change.
· Cultural Readiness Surveys – Does your culture fit to Industry 4.0?
· Industry 4.0 Assessment – What are your transformational capabilities?
2. Consulting Support
For the transition into Industry 4.0 companies require more added value from service partners, inducing consulting. This can be achieved by using smarter methodologies, processes, software & hardware or a combination of those. Focus from day one on people and processes, prior to implementation of any software or additional IT solutions. The right recommendations should be based on ¨Best Practices¨.
An example on how you can look at it this can be:
· Customer Value Assessment – What do your customers value most?
· Strategy – How to become a smart factory?
· Change Management – Human support in meeting Industry 4.0 objectives,
· Process Consulting – Creation of process concepts.
Seek for support from consulting companies which specialise in new ways of thinking and actions that lead to interactive leadership styles, allowing new possibilities, strategies, innovation and problem-solving capabilities. Here you need to be aware that many of the classical solutions are tied to consulting. This is not efficient. Choose your specific needs and be supported with what gives you maximum and direct value, quick ROI, measuring benefits from the beginning of your support relationship.
3. Smart Software solutions
Utilize a new category of agile, German made solutions, known as Enterprise Management Solution (EMS). By combining the best of ERP and MES capabilities, those smart solutions define Industry 4.0 standards, values and drivers and aligns those with your management, organization and processes, depending on the level of values you want to create.
With a client and simplicity focus, using real-time data, EMS systems empowers you with information, which creates value innovation (reducing costs while increasing direct value).
Some capabilities of smart process solutions are:
· Intuitive Developed with the end users in mind. Using intuitive structures and interfaces, they enable quick independence of operators. Minimum training and support is required, reducing HR costs and challenges. Quick training and transition.
· Interoperable Can be connected with almost every machines, assembly lines, team, department, location, business processes, client, supplier, etc., using different languages.
· Instantaneous Access in real-time data (instantaneous), from any location, displayed in any smart device, anywhere in the world, allowing total vertical and horizontal transparency. Bridge network blackouts with real-time interaction and access to live information.
· Flexible Quick installation, at a fraction of the time of classical software solutions, with no operational disturbances. Possible customization can include software access, interfaces, layouts, reports, simulations and many more. Adapted by configuration instead of programming and can be used as a:
o Stand-alone solution and/or
o Part of an existing network of ERP, MES or company own IT systems, spreadsheets, etc. interconnecting all in one platform, giving immediate added value, through harmonization of complete IT infrastructure.
Companies crave for different services that add more value, while requiring less time investment. However, most companies are not aware that those kinds of services exist as they need to change their paradigm first.
For companies to maximize their Industry 4.0 benefits, services have to be adjusted. In the new world and new industrial revolution, services lead to value innovation and are customizable to fit specific needs. Those augmented services support a lot more efficiently best practices development and will empower companies with:
· Core Competencies focus,
· Added Value Maximization,
· Intelligent Analysis of Information,
· Operational Predictability & Efficiency maximization.
Industry 4.0 services are created to optimise EMS systems by combining with aspects of strategy, processes, hardware and software. Services are synchronized to specific needs, including technical, remote and on-site support, and system upgrades. Customizable trainings at all levels, as well as workshops, will empower teams with new ways of thinking.
Below are some examples of service changes and opportunities you can develop.
· One-stop Service. Technicians will diagnose problems remotely and will have parts available when they arrive at the site. Moreover, they will have supporting information for executing the repairs. Only one visit will be necessary, and efficiency rates will rise.
· Remote Service. Smart, connected products make delivering service via connectivity increasingly feasible. Products will be repaired remotely. Service technicians will access just as much information about a machine when they are off-site as when they are on-site. As a result, service costs, equipment downtime, and customer satisfaction will be improved dramatically.
· Preventive Service. Using predictive analytics, problems will be anticipated in smart, connected products and action will be taken. Vast amounts of data which smart, connected products gather, will create new ways for service personnel to cooperate with colleagues and work with customers together. Information about a product’s service needs and step-by-step repair instructions, will increase dramatically service efficiency and effectiveness.
· Low Tech Services. Even low-tech services will incorporate smart, connected devices. A cleaning company will place sensors in washroom doors or meeting rooms in order to focus on just the spaces that need cleaning. A parking garage will install sensors in individual parking spaces. A smartphone app will guide drivers to open spaces, reducing congestion and improving space utilization. The app will enable ticketless, barrier-free payment, while allowing dynamic pricing that reflects minute-by-minute demand patterns.
· New Services. The data, connectivity and analytics available through smart, connected products are expanding the traditional role of the service function and will create new offerings. The service organization will become a major source of business innovation in manufacturing, driving increased revenue and profit through new value-added services such as extended warranties and comparative benchmarking across a customer’s equipment, fleet, or industry. Entirely new services will be created. The range of potential new services enabled by smart, connected products is limited only by the imagination.
Digital transformation of an enterprise will be a must. Digital data will influence and impact everything, from employees, customers, suppliers, assets, and management.
Human factors are the main factors in realizing a sustainable transformation of manufacturing and organization into the digital world. When people are not directly involved, results take longer and the risk of failure becomes higher.
Achieving a paradigm change in Industry 4.0 will result in maximizing added value services, processes, and systems alignments. It will come by adjusting smart solution to specific strengths and needs, leading to added profitability, efficiency, and innovation.
Creating specific solutions, for specific needs, will only be accepted and supported by your people, if and when they feel involved and empowered. Utilizing agile smart solutions will lead to optimal, new, innovative and effective business processes and create new business models. As your people know the problems, your best bet is to provide them with the tools, coaching, and support to find the best solutions.
In my years of experience within Industry 4.0 I have seen the lack of paradigm change and the refusal of people, mostly in key positions to adapt/adjust. Going for what they consider “safer” options, limits risking career, for example spending millions on the “safe software” option by looking at what the competitor has chosen. Or by focusing on what was done up to now, including processes. At the end of the day, the decision maker might be in this position for a couple more years before moving to a new one. So why change?
To conclude, a paradigm change is needed for a successful industry 4.0 transition. There is no option. Companies who fail to adapt, will be phased out as they will not be able to compete. Thus, focus on the challenge, look “outside the box”, change the paradigm and remember: "If nothing changes, nothing changes".