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What's Holding Manufacturing Back in Industry 4.0?

Posted by Janie Ryan | November 29, 2018

Manufacturing is part of the supply chain complex that is being swept up by a digital revolution. Yet a deeply-rooted “if it’s not broke don’t fix it” mentality, and a lack of integration between operating and IT systems, are preventing manufacturing from reaping the benefits of Industry 4.0.

Digitizing is about mindset

Broadly, digitization refers to the union of physical and cyber technologies using artificial intelligence, improved data analytics, automation, robotics, and cloud-based technologies.

Many say manufacturing is ripe for this kind of disruption. Yet according to Industry Week, most of the experts doling out advice on how to do so “don’t fully comprehend the complexity of the challenge of going digital for manufacturers.” In short, while it’s easy to prescribe a digital strategy to help manufacturers become stronger assets to their supply chain partners, this prescription doesn’t always take into account the fact that manufacturers, themselves, might not think the immense effort of overhauling their operations is worth the potential gains.

Many manufacturers have been servicing a small amount of key partners in a single industry for years. They have scaled and got their processes down pat. Their order fulfilment may not be 100 percent, and they might struggle to juggle communication between suppliers and customers. But this is just part and parcel of working in supply chain and at the end of the day, they are good enough to keep their customers. And that’s what matters.

Of course, this mindset depends on the maintenance of the status quo and the absence of new competitors that can deliver a greater degree of efficiency to businesses. But the supply chain space is changing rapidly, and every industry is facing pressure to be better. With the benefits that a digitally-connected operation offer — faster issue resolution, better forecasting, etc — it’s not a stretch to think that digital-savvy competitors will seize an opportunity to shine.

The need to unify IT and OT

Digitization requires the unification of IT with Operational Technology (OT) — think systems that process electronics, telecommunications, computer systems, and other operational data, as well as controlling valves, conveyors, and other machinery. Gartner defines OT as “the hardware and software that detects or causes a change through the direct monitoring and/or control of physical devices, processes, and events in the enterprise." You can think of it as the backbone of modern-day smart factories — it powers the plants and infrastructure that enable factories to run. As more machines and their components become connected — in other words, as digitization occurs — the importance of OT grows.

In the past, IT and OT typically only came together to firefight. Too often, it was a problem, not an opportunity, that brought the two together. Whether it was a security incident or a system failure, those encounters did little to breed trust and collaboration between the two teams.

But the unification of both technology systems is a pillar of smart manufacturing. Machines need to talk to each other for the right data to be gathered that will power improved forecasting and responsiveness. But before this can happen, the teams running the machines need to be de-siloed to enable cross-departmental collaboration — and not just when there’s a need for firefighting.

To help manufacturing move into the digital era, some strategic and organizational challenges should be addressed. First, the strategies of IT and OT departments need to be aligned. IT and operations managers should share at least some common and overlapping goals and targets. A task force or department with joint governance and responsibility should execute projects, harmonize overlapping systems and processes, and promote the development of interdisciplinary skills across teams.

Harkening back to the idea of mindset, this reorganization isn’t a change that will happen overnight. According to Luigi De Bernardini, CEO of Autoware, “it’s a cultural shift that requires time, effort and a progressive plan.”

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