The 2018 North American Manufacturing Excellence Summit (NAMES) is an annual event held in snow-should-be-almost-gone Chicago, solely focused on manufacturing (as opposed to other supply chain areas such as logistics or procurement). A great mix of verticals – including CPG, Life Sciences, Consumer, Construction Equipment, Toys, Appliances, Cosmetics, Automotive – were present, allowing for a more balanced perspective on the state of manufacturing in North America. About 50% of the general sessions were focused on technology (robotics, augmented reality, etc.), reaffirming the role of technology in manufacturing. Industry 4.0, also known as Smart Manufacturing colloquially, has been universally accepted as the future of manufacturing. Its definition has changed over time – to accommodate technologies that were not invented in the 1960s – including Cloud, Big Data, GPUs, and Blockchain – making it as relevant today as it was 40 years ago. With all the excitement of WHAT IS Industry 4.0, the conversation has lost focus on WHY Industry 4.0. In my recent talk at NAMES, the focus on what the technology can do seemed to have resonated. Here is an excerpt:
1. Industry 4.0 Allows Manufacturing Adapt To (Or Better Yet, Harness) Globalization
Brands and manufacturers alike have expanded or outsourced manufacturing to foreign sites to be closer to suppliers, markets, and cheaper talent. Global factories and its operations need to stay tightly connected in multiple manners: to share data, to pass goods, to process payments, to collaborate on ideas. Data exchange has shifted from email/XLS-> FTP-> EDI->REST to now Blockchain. Contract manufacturers now have crept up the manufacturing value chain – from OEM to ODM to JDM. Because these contract manufacturers are usually located in foreign sites, staying in synchronization is made more difficult due to time zones, culture, and agile product cycles. Manufacturers must embrace cloud – the platform for real time data and idea sharing, transaction visibility, speed of execution, one version of truth, and mobile.
2. Industry 4.0 Enables Manufacturing To Anticipate & React Quickly To Demand
Modern shoppers are not only finicky about WHAT they buy, they are also equally (if not more so) about HOW they buy it (omnichannel). Factories need to adapt to this paradigm. They need to anticipate buying habits – with social sentiment, product feedback, and crowd-design insights fed directly into the factories. Delay configuration until the very last step – perhaps pink is out and purple is in. Cloud can help, with single source of truth, connected ERP systems that take customer feedback directly into the design and manufacturing systems. Look around you – new businesses that are cloud native are helping get the right products and services to market at the right time. Legacy companies are less agile—and being outmaneuvered by Industry 4.0 factories.
3. Industry 4.0 Can Improve Operational Efficiency And Grow Revenue
The original promise of Industry 4.0 is found here – improve yield, increase throughput, reducing cost -requires a one panel real-time view of your all of your factories (global, 24/7). This will enable factories to react immediately to manufacturing lines down, product yield drop, or manage changes in configuration. Unpredictable factory maintenance directly impacts OEE. Industry 4.0 can provide the technology – sensors, BigData, machine learning – to prevent costly lines down. Yield systems, tied to MES systems, can help to adjust run-time recipes to save material cost while not impacting output or yield. Factories can also aid product agility to make just the right product, deferring customization to the very last possible step. Resources are limited, track everything – machine, people, tools, parts.
Industry 4.0 Is Already Here At Oracle
Oracle has expertise in industrial manufacturing, manufacturing solutions, Internet of Things, Adaptive Intelligence, Blockchain, and integration technologies to bring Industry 4.0 capabilities into your manufacturing system. England drove Industry 1.0. The USA drove Industry 2.0. Germany drove Industry 3.0. Who will drive Industry 4.0? Perhaps you!