Roadmap to Industry 4.0

Author: Lauri Antalainen

In manufacturing, the foundation of digital transformation is data, more precisely – how data is created and used for decision making. While it is clear that suitable equipment is a necessity in order to apply Industry 4.0, it’s important to understand that just having suitable hardware and software is not nearly enough. Thus, in order to develop a roadmap to Industry 4.0, it is essential to have data creation and usage in operational decision making prioritized and analyzed. The road to Industry 4.0 can be thought of as depicted in the following figure.

At first, everything is simple

(1) At the most basic level, there is no digital data; therefore, all the decisions made are based on intuition. The CEO spends most of their working hours in the production hall, working with equipment, and monitoring the production.

(2) As the company grows and the CEO can’t be on the production floor all the time, a spreadsheet-based solution will usually be introduced. At first, the spreadsheets are mainly used for planning the short-term production pipeline. The decisions are more often than not still based on intuition.

Complexity creates the need for more thorough resource planning

(3) As the complexity in the company grows, so do the spreadsheets. Now there are many of them, for different planning and analysis purposes. The data in the spreadsheets are used to calculate product manufacturing costs and create simple BoM-s. The decisions are influenced by the data and statistics in the spreadsheets.

(4) At a certain point, the spreadsheet system limits begin to manifest in quality problems – deadlines are repeatedly missed and the number of scrap increases. There is no effective overview of what is going on in the work centers and when one or another product will be finished. Therefore, processes are optimized and an ERP/MRP system is implemented. A correctly implemented ERP system gives a good overview of things happening on the production floor and helps in estimating delivery times. In addition, ERP starts suggesting when to order raw materials or when to produce certain products.

Integration and automation

(5) The company continues to grow and while the production planning and manufacturing functions reasonably well, problems appear in other areas. These problems can manifest in different aspects of the business, such as warehouse management – finding the right products or semi-finished products from the warehouse starts taking more and more time and effort. The quantities in the customer orders have grown and mistakes on order assembly result in customer complaints. Therefore, additional solutions to digitalize warehouse management and other parts of the business are implemented. These systems are now integrated with each other and ERP, enabling automation in several aspects of the business. All actions are taken by human operators, but decision support tools present options and influence decision making.

(6) Additional solutions are implemented to gather and use real-time data. The data gathered from various sources is all real-time and, based on this data, AI-based solutions are developed and implemented to automate even more parts of the business. Several decisions (e.g. production plan) and actions are performed autonomously with human supervision and authorization.

The Factory is now Industry 4.0 ready

(7) All of the systems are integrated into one data realm where all the data is created and used in real-time. AI is implemented for making all the important decisions. Decisions and actions are performed autonomously with human supervision. High-impact decisions allow human operators to intervene and override.

It takes time and effort to apply Industry 4.0 principles and it is usually difficult to skip steps in this process. As mentioned earlier, the advances in data creation and usage need to be accompanied by investments into suitable equipment and hardware. Approaching this journey as described above gives good guidelines on prioritizing potential investments in the pursuit of Industry 4.0.

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