Over the last few years, we have had the opportunity to observe both innovative best practices and regrettable assumptions in Industry 4.0 initiatives. In this post we will share a few lessons learned.
1. Start the business case when you start the project
The classic approach to IT projects has been to prepare the business case just prior to advancing to the approval and procurement stages. Yet in many instances we have seen organizations struggle to determine the business value generated by Industry 4.0 projects. For example, can an IoT innovation truly reduce unscheduled downtime and if so, what is a fair assumption for the percentage decrease to assign to it? Or if an AGV can improve its runtime with improved connectivity, how much more run time can be assumed and what is the economic value of that increased efficiency? These types of questions will often require collaboration among multiple departments. This challenge is further complicated because there is a scarcity of widely available Industry 4.0 metrics that provide a foundation for making critical assumptions, thereby leaving the enterprise to figure it out independently. This uncertainty introduces delays and elevates risk considerations. The solution, or at least part of it, is to start the business case concurrent with other work tracks such as the early use case definition, functional requirements development and technical alignment discussions.
2. Deploy multiple use cases for higher impact
Industry 4.0 and IoT projects are becoming as well known for pilot purgatory as for success stories. We see far too many proofs of concept projects ending in disappointment and disillusionment. In many cases, the focus was on functionality and technical alignment rather than business impact – or the scope was so narrowly defined and limited that it was impossible to assess the scalability of the initiative. Though the causes of these results may vary, they typically share some or all of these characteristics – the company sought to test a single use case since it required fewer resources, introduced less risk, had lower organizational visibility (in case something went wrong) and came in at a lower price point.
With most of our manufacturing customers we are not seeing a single Industry 4.0 use case that is so compelling all by itself that it can generate the business value necessary to justify the technology investment. Those customers that opt for multiple use cases are more often able to aggregate the collective business value while also hedging their bets in case one or more use cases does not pan out as expected.
3. Notes on how to create commitment
There is no shortage of ideas and priorities in most enterprise environments. Yet there is a corresponding shortage of time and resources to bring those new projects to life. We find that many organizations only dip their toe in the water when it comes to Industry 4.0 and IoT programs. They can easily be seen as science experiments with low risk, low visibility project scope that can make it hard to convince a core group of people that not only is the project worthwhile, but it is also worth prioritizing. Changing hearts and minds necessary to creating commitment is a real challenge, perhaps the biggest obstacle to digital transformation.
One way to socialize an Industry 4.0 project is the aforementioned early business case initiation. Clearly identifying expected business impact early is a great way to generate support. Another is an unexpected byproduct of designing and deploying multiple use cases. The expansion of use cases often means that more functional groups and departments are getting involved in the industry 4.0 project. As more people and groups get exposed to the possible benefits and business impact, more word of mouth and buzz about the project is generated – and more consensus is often the result.
We are also seeing manufacturers create acceptance and excitement with internal events like showcases that demonstrate the use cases and supporting solutions. It is one thing to have a vendor describe a solution – it is a whole level of additional value when it is an employee describing their specific business problem to their peers and how the company is addressing it with an innovative solution.
4. Document the vision
We frequently ask manufacturers if they have some form of shared document that captures their collective vision of Industry 4.0. In the vast majority of cases there is no artifact or shared “sheet of music” for their factory of the future that describes where the organization is going and what that road map looks like. So, in a typical scenario, an individual group or tiger team takes on a small IoT project with predictably lukewarm results; or in a worst-case scenario, nothing truly innovative occurs, as Industry 4.0 becomes the victim of delays, inertia and the prevailing dominance of other priorities. Once the vision is documented, it can be shared; once it is shared, it can be improved; once it is improved, it can create excitement; once there is excitement, it can inspire action.
5. Start small and scale
Digital transformation technologies can be a significant investment considering all potential use cases, devices, application ecosystems, and network infrastructures. It is crucial to start with the right quick and small baseline. This step can show evident and measurable return on investment and provides an ability to scale. This scaling can be from one location to multiple locations, one use case to several use cases, and one area of operations, such as assembly line automation, to all aspects of business, such as warehousing, spare parts management, etc. The roadmap to deployment should also consider the maturity of all components in the ecosystem, including intelligent IoT devices, applications, distributed computing environment, and the ability to monitor and manage the new platforms.
We believe these proven lessons can serve as powerful conversation starters and catalysts for driving transformative change within your organization. Embracing these insights has yielded tangible results for other companies, and we're excited to see the impact they can make for you.
