For Manufacturers, Industry 4.0 is Still a Work in Progress
For years, manufacturers have touted the benefits of Industry 4.0, the threshold past which talent and technology form a symbiotic partnership to generate optimized outcomes.
Crossing this threshold means achieving digitalization, whose benefits include superior record keeping, minimized downtime, reduced waste, greener operations, smarter inventory management and organizational data proficiency. But such an undertaking is not without its challenges, which may explain why so many manufacturers have yet to actualize on their digitalization ambitions.
Parsec Automation’s 2024 research found that just 32% of North American manufacturers have completed their digitalization initiatives.
Let’s explore manufacturers’ progress toward Industry 4.0, the challenges standing in the way, and what it all means for the industry.
What does digitalization look like?
As a whole, manufacturers have been making their way toward Industry 4.0 since the late twentieth century, when Industry 3.0—marked by the integration of computers into manufacturing processes—was widely achieved.
Now, businesses are tasked with moving beyond mere usage of technology and embracing a true partnership where humans work side-by-side with machines to achieve unprecedented levels of efficiency. This is, of course, easier said than done, and it doesn’t happen overnight.
It must also be said that digitalization isn’t a discrete task to be completed by checking a certain number of boxes. It is a process and, as with most processes, it will mean different things to different companies. Still, there exists a baseline characterized by solutions like digital record keeping, connected systems, and data capture and contextualization. This is what manufacturers should aim for.
Half of North American manufacturers are in the thick of this process, building the frameworks that will open the door for key technology like automation and real-time data capture and analysis. Artificial intelligence (AI) has a big role to play in digitalization, too, from predictive analytics to algorithmic production scheduling. Nearly two-thirds (65%) of manufacturers report being just “somewhat” prepared to adopt and leverage AI effectively.
To move the needle on AI in industrial automation and other advanced technology, manufacturing leaders will need to work closely with their teams to identify use cases, vet appropriate solutions and train workers. Getting this right is an absolute must for working toward digitalization; leaders should take their time as they guide their teams forward.
What will it take to get to digitalization?
At the highest level, digitalization requires obtaining, maintaining, and aligning two key variables: people and technology. It’s deceptively complex for manufacturers of any size and sector.
Manufacturing workers need to be trained and comfortable with whatever tools and technology are on the shop floor. Otherwise, the facility could experience delays, downtime, errors and even safety hazards. In the long term, a lack of training can stall manufacturers’ growth at an organizational level. For instance, 30% of manufacturers say a lack of skilled talent is preventing them from adopting AI.
As they pursue Industry 4.0, manufacturing leaders will in all likelihood need to both train existing teams and hire new, skilled talent. These initiatives require continued, concerted efforts up and down the “org” chart and often come with speed bumps along the way. Indeed, 38% of manufacturers say training is a top staffing challenge, and 43% cite finding qualified candidates as such. Patience, persistence, and proactive communication are key here. Change management is a never-ending process, but it’s always worth the lift.
Of course, researching and implementing the technology is no small feat either. Even if manufacturing leaders have executive buy-in and a team eager to learn, they’ll need to make countless impactful decisions about the future of their facility.
Developing a data-driven strategy (like 56% of manufacturers) is a great place to start and will help leaders ground their technology aspirations in real business needs. Plus, it will give businesses an anchor to fall back on when they meet challenges in their digitalization endeavors.
With a methodical approach and the expert counsel of technology partners, manufacturers can begin to move their organizations forward. It just takes time.
A Rising Tide Lifts All Boats
Nearly one-third (32%) of manufacturers are already in Industry 4.0, serving as an inspiration to those still making their way toward digitalization. This vanguard within the industry is operating with higher efficiency than ever before, experiencing the transformative benefits that come from connected platforms, IIoT-enabled equipment, and digitalized operations. Indeed, of those who have completed their digital transformations, 83% rate their results as “good” or “excellent.”
Every manufacturer to cross the 4.0 threshold can help set the pace for those that follow, leading by example and showcasing what it means to be digitalized. As more and more businesses make the leap, the industry will become more efficient, sustainable and adaptable. Customers, consumers and the planet will be better for it.
