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By Öykü Ilgar, SAP


There will be $210 billion worth of investment in Industry 4.0 in the next 5 years, according to the recent „Building Intelligent Factories with Industry 4.0“ report. While 8 out of 10 manufacturers agree intelligent automation will help their business growth, 70% of manufacturers in “pilot purgatory” are still indecisive about intelligent factory innovations.

The interesting fact is that 88% of manufacturers believe an increase in smart devices and embedded technologies within their production processes in the next 2 years, despite only 46% of company executives have full access to the data they need for Industry 4.0 analytics and planning.

For sure Industry 4.0 is shaping the future of the manufacturing industry, yet there are challenges businesses face for making this transformation happen. According to the report, the biggest challenge for organizations is identifying the business opportunities and benefits that Industry 4.0 brings.

Let’s discuss how intelligent factories help manufacturers to maximize the efficiency in the time of disruption by sowing the seeds of Industry 4.0.


Build up agility to overcome unforeseen disruptions

The COVID-19 pandemic has been one of the most eye-opening experiences for supply chains ever. While some industries got irreparably affected by the disruption, some are already in the healing process.

The solution is intelligent factories“ says Mike Lackey, Global VP of Solution Management for Digital Manufacturing at SAP; and explains „As the factory is producing more intelligent products, and as it incorporates more intelligent assets, you’re able to collect more data than ever before.“

Continuous data collection helps organizations to utilize advanced capabilities such as predictive and preventative maintenance, analysis of non-conformance reports to the changing regulations, and real-time monitoring to improve overall effectiveness. But what’s more important than collecting a sufficient quantity of data is being able to analyze this vast amount of data in order to make resolute decisions when an undesired surprise occurs. Being able to harmonize this data enables organizations to see the bigger picture and consolidate the entire global manufacturing operations.


Shape your consumer habits

COVID-19 has changed our shopping behavior as consumers, and we are all shopping online more than ever. Think about your parents or elder family members who like to touch the product before buying – I myself was also one of them as a millennial -, their behavior had to shift to doing more research online to find the best product possible. Having more data at our fingertips, we, the intelligent consumer, is a major disruptor for the manufacturing industry.

Demand for customized products for consumers as well as configured solutions for big enterprises is increasing, with the expectation of environmentally friendly production and the right time delivery. As consumers are gaining more consciousness about the sustainability topic and governments giving more attention to protecting the environment, organizations are being pushed from all directions.

“They’re willing to pay for that level of customization,” said Lackey and continued And the companies that are offering that level of customer service, that are customer driven and are making decisions based on data-driven information, are the ones that are going to succeed. When you start going from mass production to mass customization, though, you still have to hit volumes. There’s still a production plan to adhere to, and high-quality standards - all of which must be delivered with the resources on hand. Bringing intelligence to the process allows manufacturers to respond faster and achieve these outcomes.”

Controlling the product quality at each step of the manufacturing process enables organizations to create a closed feedback loop. With the usage of artificial intelligence and machine learning, organizations can eliminate errors and missteps; which helps companies to save human power for value-add tasks. As you produce better quality products from design to operate, you demand better quality from the suppliers, and enforce integrated and harmonized planning. At the end of the day, the quality of what you offer for your customers increases exponentially.


Keep machines run at 99.9% uptime and efficiency

According to Building Intelligent Factories with Industry 4.0, 59% of manufacturers foresee that Industry 4.0 will have a “significant impact” on the industry by 2026.

During the lockdown, government restrictions lead many manufacturing plants to suspend their production. But the ones with fully automated production lines succeed well while the others struggling with the rules and various complications. This leads organizations to reconsider implementing environment, health, and safety management within their operations.

The cost of intelligent factories may seem a solid excuse for starting the transformation journey. However, it is also a crucial step to eliminate the potential risks or crises like COVID-19. While the human workers step in for troubleshooting and supervision, the rest of the intelligent factory can autonomously continue the production.

Lackey further explained, „SAP is bringing in the environmental and sustainability concerns, ensuring we know if the materials are sustainably sourced and processed, the carbon footprint of the factory, and what that means to corporate compliance reporting. And then there’s health and safety, guaranteeing workers are operating safely. And SAP brings that all together.”

To safeguard the operational continuity, it is a significant measure to integrate environment, health, and safety management. Think about IoT solutions helping employees to meet the social distancing policies, as well as measuring the temperature and particulates in the air that potentially create the foundation of virus transmission. Having this visibility over your EHS data, you can see how much compliant your manufacturing plant to the policies or how to improve it better. Also, applying machine algorithms helps with identifying the patterns that the human eye can oversee. This enables organizations to proactively identify, analyze and mitigate risks before they impact the operations’ efficiency.

So, here is the bottom line: in today’s connected, informed, and disruptive marketplace, intelligent factories are helping manufacturers drive future growth and innovation. Listening to your customers and your employees, intelligent factories enable organizations to deliver market expectations and utilize the opportunities as well as mitigate the risks to improve business outcomes.

Would you like to learn more about how organizations utilize Industry 4.0 to improve manufacturing processes? Check out the “Building Intelligent Factories with Industry 4.0”.