Industry 4.0 - The Benefits Of A Connected Manufacturing Model

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Industry 4.0 is now underway and it’s already bringing radical change to the manufacturing value chain. One of the key enablers is connected manufacturing which is today helping to link all the components – from the supplier to the production line, reseller or distributor, and finally end customer.

*Fabrizio Battaglia, Head of Manufacturing HSO*

Manufacturers are already accessing information about the supply chain and their products through the Internet of Things (IoT). The new paradigm is enabling them to extend the connection to the end customer and start to feed back information assembled there to production to adapt the value chain.

Reaping the Rewards of Industry 4.0

This new connectivity enables manufacturers to find out more about how their customers are using their products. And these developments are likely to have a profound influence on the way that goods and solutions are made in the future.

Thanks to the change unleashed by Industry 4.0, manufacturers are already designing and developing products based not just on their own vision and expertise but also on customer feedback and an analysis of customer usage.

Moving a further step forward, manufacturers can use that information to improve the product but embed it with services that both align with customer needs and deliver incremental revenue streams. It is an evolution of the whole design concept and it requires a complete mind-shift.

Manufacturers no longer simply have to consider the shape, form and build of the product but they now also have to think about how best to embed services into the product too.

Customer usage can increasingly be tracked and this knowledge shapes the ongoing development of the product. If a particular function is not being used at all, it can be removed.

On the other hand, if a function is being used intensively, its capabilities can be developed further in the next release. In a sense, the customer is in charge, driving the evolution of the product based on the way they are using it.

It’s also critical to have a feedback loop in place so that customer complaints can be fed back into the design and development process. If customers are complaining to customer service that a valve has broken, for example, then the design team also needs to be aware of it so that they can adjust the product accordingly.

Industry 4.0 – Heralding a New Era

The concept of connected manufacturing represents not just a big change but also a major challenge to manufacturers. Their focus is no longer on simply creating a product and then selling it. Instead, they need to gather together and leverage information about how the product can be used and serviced. Doing this successfully necessitates cross-department collaboration. Working in silos is no longer an option.

Moving to a connected manufacturing model is not easy. There needs to be a process of education put in place around the requirement for businesses to adopt a more service-led approach.

Some manufacturers see this in fairly limited terms as being primarily concerned with putting a service contract in place and then tracking any assets that have been sold – often by employing approaches based on sensors and the broader Internet of Things (IoT).

They may have developed a new customer service team or they may have extended their existing one. But often this team works in isolation, disconnected from the rest of the company and its partner ecosystem.

Manufacturers need to ask themselves the key question: is their customer service team working as a siloed department, or is it really open to the customer and linked back to production, design and the wider supply chain?

Many companies are not yet putting all of these key connections in place and coupled with this, many are not yet grasping all the opportunities that exist around the feedback loop referenced earlier and the ability to evolve the design with service in mind.

This is at the very heart of the concept of connected manufacturing. Manufacturers need to first understand and accept this reality and then start modifying their processes and procedures to accommodate it.

After all, it will be those businesses that understand the new connected manufacturing model and tackle the challenges outlined above that will succeed in the future and be best placed to take advantage of the opportunity to develop new solutions, upgrade existing ones and build sustainable new revenue streams that change the after-market process from cost to profit centre.

Having an understanding of the challenge and a determination to tackle it is, however, not sufficient in itself. Manufacturers also need a clear view of the broader context.

They need to know what their ultimate goal is – what they are looking to achieve – before they switch to the new model. They need to understand, for example, what markets they want to target, what demand is likely to be and what KPIs are they going to put in place to measure achievement.

And they need to have a talented team of people in post who can read and analyse information coming from the customer and then kick-start the development of new products and services that address this new insight into behaviours and preferences.

And remember – all of this has to be part of an evolutionary process. A big bang approach simply will not work because the risk involved will be too high. If an organisation moves too early, they are likely to find that in fact they can’t change sufficiently quickly because they haven’t tested their plans properly and they don’t have a fully thought-through strategy in place.

The capabilities enabled by this new connected manufacturing paradigm are today enabling manufacturers to transform not only the way they engage with customers but also their entire business model and approach. The days of the traditional ‘sell it and forget about it’ manufacturing approach look to be increasingly numbered.

Shifting Targets

Manufacturers today can’t afford to adopt a purely sales-focused approach. Instead, they need to go further than that to draw on the data resources they have across the organisation and beyond in order to understand clearly how the customer is using the product and what they are looking to get out of that usage.

They also need to develop a strategy to collect data and analyse it as well as putting in place of team of people capable of carrying that process out. And of course, it also means bringing in the right technology, typically including enterprise resource planning (ERP) to enable this vision to happen.

With all of that implemented, manufacturers have a solid foundation to enable the delivery of value added services that allow them to build a long-term relationship post-sale, improve the user experience and tap into incremental revenue streams.

It amounts to a transformation of the whole manufacturing landscape – and ultimately that is likely to be one of the greatest legacies of the new connected world that Industry 4.0 has ushered in.