Manufacturing digitalization and automation – Industry 4.0

It was apparent at the CeMAT fair in Germany in the fall how actively Industry 4.0 is discussed internationally. Its benefits are seen as highly significant and a lot of investments are being made in it. Industry 4.0 is a vision on how manufacturing in the future will be more customer-oriented, automated, flexible and faster. The intelligence of the systems manages automation and people digitally. I am very concerned on how little manufacturing digitalization or Industry 4.0 is discussed in Finland.

The expectations from Industry 4.0 are really high: different studies repeatedly talk about ‘quantum leaps’ (Here you can review one study from a Finnish perspective). The studies often discuss 30 % cost savings. Leanware has experience on how LeanwareMES at different sites has eliminated, 25 % of unnecessary work, increased flow by 100 %, reduced scrap by 20 % and improved throughput by 30 %. Manufacturing digitalization is not hype, as it is generating excellent results already today.

Digitalization does not mean eliminating printouts from manufacturing. A weak process is not improved by using a tablet instead a sheet of paper. Industry 4.0 and digitalization allow building new, much more efficient processes. Therefore, Industry 4.0 applies to all of the processes in a company: sales – purchasing – logistics – different manufacturing phases.

Personally, I divide Industry 4.0 into two parts. The first, the ‘practical part’ is already here and the technologies are well-known and already in use. Good examples include the Agco Power engine plant in Linnavuori and certain ABB units. Manufacturing is managed digitally in these instances and batch sizes are one or very small, manufacturing transparency and the ability to react is excellent. Instead of several systems, the process generates traceability and process data using a single MES while performing other functions.  Automation is integrated as a seamless part of manufacturing. People and automation work effectively side-by-side. The other part of Industry 4.0 could be called the ‘hype’. This is associated with technologies that are not yet sufficiently cost-effective or tested (e.g. self-organizing manufacturing equipment or hyper-flexible automated storage units). The lesson is that there is no need to wait for Industry 4.0. It’s already here.

What is stopping us Finns? According to studies and my personal experience, we are hindered by lack of either expertise or vision. One must have the courage to create the digitalization roadmap. According to my experience, I would estimate that only 10 % of companies have clear goals on developing manufacturing via digital means. The other 90 % have manufacturing problems that they are seeking to resolve. The first group engages in persistent and systematic development work. They take the first, controlled step by designing an intact data architecture to support digitization. This results in several important things starting to occur for the future: the master data starts to improve and become more rich, credible data is received from manufacturing for analysis and the first accomplishments in the arena of real-time operations are recognized.

Another factor preventing adoption is culture. Very many factories operate the way they do, because ‘ERP works that way’. When you want to move toward the Industry 4.0 vision, manufacturing has to envision streamlined ways of manufacturing products. The rigid features of ERP can no longer hinder progress. The Industry 4.0 vision often requires MES and WMS software to integrate manufacturing with material automation, for example.

Where should one start manufacturing digitalization? There isn’t actually a single right way of deciding where to start, but usually the starting point is either digitizing the work queues and instructions or material management. Leanware has very good experiences from both starting points. Starting with work queues is justified, for example, by short phase times, customized mass-production, and quality problems in manufacturing. Starting with material logistics may be justified due to a large number of SKUs, moving to picking for manufacturing, material automation and problems with material sourcing.

Studies indicate a 30 % increase in efficiency, speed, quality and flexibility. We would gladly come see what Industry 4.0 could mean for your company and what you should use as your starting point.

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