Industry 4.0 Implementation in a Frugal Way

Industry 4.0 Implementation in a Frugal Way

>> Abstract: Industry 4.0 / Smart Manufacturing / IIOT Implementations for larger companies start with huge upfront commitments and budgets and get challenged for completion and showing the ROI (Returns on Investment) the Business Case commits to. The situation is further worse for SME's (Small and Medium Enterprises), where the "business is always run as a balancing act between the fixed costs, operating costs, and the revenues to keep the "ship afloat".

This article proposes a frugal way to approach Industry 4.0 (or similar approaches) to be implemented to start with the Minimalistic Paradigm - with the low-hanging-fruits to be addressed to achieve "maximum results, in a quick time frame and with a minimum to ZERO upfront investments". This gives confidence with these smaller chunks and shows concrete results, as deterministic progress is made and hence the results achieved. This approach eases out the burden on the large transformational programs to be run with the Minimalistic Paradigm for larger and smaller corporations to generate a degree of confidence and hence resulting in more adoption of standards like the Industry 4.0 and hence delivering "inherent benefits" for the businesses incrementally investing efforts.

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>> Context: Industry 4.0 and similar standards come with a very wide definition spreading across the technology streams and promising huge benefits due to these technology interventions. This has built a sense of "over-promise and under-deliver" in most of such transformation projects, resulting in a considerable negative sentiment around these next-generation transformation levers. The main issue is about both ways - firstly, the way expectations are set for returns and secondly, the way these programs are run in a "big-bang" approach with larger outcomes expected.

The key to success factors by the frugal approach is

a) to set the right expectations, which are incrementally revisited in smaller frequencies like 3 months and

b) carry these out as "smaller-tangible-steps and

c) approach it using the Minimalistic Paradigm, to address the lowest-hanging-fruits (maximum output in minimal efforts) ..

This will result in projects getting managed in smaller phases, with outcomes set only for the shorter duration of control and with minimal investment. The larger investments could come into the picture, once the initial phase for 12-18 months has successfully delivered the results with the Frugal Approach. This will result in a positive, outcome-centric, tightly controlled project delivery.

>> Background:

Industry 4.0 comes along with the following “very high expectation setting – promises” ?- getting made from the Service Integrators to the Management and hence the Stakeholder ?

“Industry 4.0 aimed to bring about a new level of automation and smart manufacturing processes. This included the use of advanced robotics, intelligent machines and automated systems to streamline production, reduce errors, and increase efficiency. As well as this, Industry 4.0 had the aim to be beneficial in contributing to sustainability goals and enabling greener manufacturing processes.

The integration of IoT (Internet of Things) devices and sensors into manufacturing processes was a central vision. This would allow for real-time monitoring of equipment, materials, and products, enabling better data-driven decision-making. Industry 4.0 was expected to make it easier to collect, analyze, and leverage vast amounts of data to gain insights into processes, customer preferences, and market trends. Industry 4.0 holds massive potential for revolutionizing industries worldwide” … So on and so forth ..

Hence Industry 4.0 Implementation automatically sets these expectations for the Management and all the stakeholders. Typically, after 2-3 years of patience, iterations and back-and-forth, the implementation comes to a crossroad with a huge question mark ahead for everyone ..

A huge number of SMEs have burned their hands into these Industry 4.0-like implementations and there is a serious scare, that "this is not our piece of cake and we would be very careful moving forward" .. having spent sizeable money for the first implementation attempt, the SME gets very jittery and negative for any further investment/exploration.

This has built a considerably negative image of Industry 4.0 [5] to be promising too high and not able to deliver to the “promises made”.

>> Conventional Approach: Conventionally, the following approach is taken with a business case getting proposed and ROI getting shown with a huge amount of returns expected.

The conventional approach lacks clarity on the following perspectives

1.???? THE NEED: What are we trying to achieve? The basic purpose for achieving "end-to-end visibility" or "getting the data sources connected"' or "getting remote operations benefits due to AR/VR usecases" etc is not clear. The focus is more on technology, than the actual business gains.

2.???? READINESS: What is our maturity to take up this technology intervention? Without assessing the current state of feasibility of the new technology to be "implementable or not", the projects get committed

3.???? BIG BANG: Why are we taking this as a single hog - a single large step?

4.???? RIGHT EXPECTATIONS: Why are we committing so much, which has a lot of ifs-and-buts, ambiguity about dependencies, unknown constraints, and things beyond our control?

5.???? SURPRISES: Are we open and honest to showcase our outcomes and admit the facts?

6.???? BLAME GAME: Who is going to own up to success or failure.. are we shying away from our responsibilities/rationalities?

>> Known Challenges in Industry 4.0 Implementation :

1.???? Huge up-front costs : The implementation starts with procurement of all the technology components (Software / Hardware / Manpower) for AL/ML, Big Data Analytics, 3D Printing, AR/VR etc .. which is huge and their further customization and integration with the existing systems becomes a nightmare

2.???? Lack of skilled manpower : The implementation requires able brains to be available in the market and / or getting trained - the programs get launched without this basic preparation and gets into a road-block

3.???? Lack of clear buy-in from the management - The business case has two components, first) deterministic - can be converted into money or other measures .. and second) non-tangible - has to be arrived at with some assumptions. The business case gets hurriedly made and quickly approved by the management in a rush, resulting in the management

a) not being convinced/committed about the project, though its running

b) keeping asking and going back to the basic assumptions, questioning the costs / returns ..

c) the management approves the project based on the "face-value, hype (heard in some conference/someone else doing it / others are able to successfully use it etc) or some vague justifications"

4.???? Using a one-way top-down approach - without taking the stakeholders into confidence. The team does not get the required bonding and hence understanding of the larger picture and the "why" part - they are just doing it, because "they are told to do so"

5.???? Using the big-bang approach - higher expectations get set via business case, which are impossible to achieve.

6.???? Clear goals not defined – The goals for the project, must become the goals of the organization and hence the same must be percolated down in the Performance Management System across the organization. The profitability of this initiative (both sides of revenue - top line and costs - bottom line) should be made as ownership of the stakeholder

7.???? The technology is not appropriate for the use case in hand/size of the company - is it really required for us to implement all the technology elements from Industry 4.0 or only the "relevant" ones need to be picked up and implemented in phases?

a) ?its not required to have an high-end ERP / CRM system as a mandatory requirement

b) there is no need to implement and integrate a full-fledged ERP system for order management

c) some of the ERP systems do not have efficient inventory management

d) it’s not required to have higher-end MES system for managing machine allocation/routing

8.???? The technology could not be adopted without further investments - aiming at implementing the big-data analytics for condition-based monitoring - the data space, the frequency of data, the AI engines required, and the prediction algorithm to be developed for the case-in-hand - are not known ahead of time (sometimes are not elaborated) and hence they get revealed as the first 6-12 months are over .. creating a bad taste in the mouth

9.???? Changing Industry 4.0 Priorities: Started with arriving at automated OEE, we changed our focus to 3D printing exploration by buying a 3D printer to be used for our products, then we decided to implement the QMS (Quality Management System - which did not have the customization that our specific use case requires .. At the end of the year, not any progress in Indstry 4.0 - hence its a failure ..

>> The Frugal Approach :

The frugal approach splits the whole project into increments of @ 1-3 months duration .. clearly defining the NEED (why I am doing this? – the data is getting made available, which has been missing till now- or the data is collated for the business decision-making, from being on paper and manual to make it to partially automated, so that the decisions are based on facts. The conventional approach needs to build on the following Frugal levers

1.???? THE NEED: What are we trying to achieve - visibility, flexibility, faster delivery cycle, use of high-end technologies like 3D Printing, AI/ML, Big Data, Mobility etc .. before the launch of any program or its smaller element, a clear establishment of a "statement of NEED" of this project will be established as a "Goal of this exercise" and followed till the end

2.???? READINESS: What is our industry's / plant maturity to take up this technology intervention? The Technology, Infrastructure, and business readiness of the organization will be analyzed and established. Only the relevant pieces of transformation will be applied based on this assessment.

3.???? MINIMALISTIC PARADIGM: Leverage the "Minimalistic Paradigm" for the identification and execution of simple tasks, with simple (existing or inexpensive) tools like Microsoft Office (Excel / Word etc) to accomplish, document, and showcase the outcomes

3.1. Minimalistic Paradigm : An approach always keeping minimum resources to get maximum results ..

3.1.1. This has roots in India's Jugaad Innovation - which has formally been acknowledged globally by HBR in 2010 [4] to as a methodology for “overcoming harsh constraints by improvising an effective solution using limited resources”.

·??????? Thrift not waste.

·??????? Inclusion, not exclusion. .

·??????? Bottom-up participation, not top-down command and control.

·??????? Flexible thinking and action, not linear planning.

3.1.2. Focus on low-hanging-fruits: Carry out a thorough and frank, Due Diligence study (typically use someone fresh from college - who has "no idea" of what’s getting done) and list the things you could accomplish without any investments in money form or efforts form e.g.

a) we will document the end-to-end Quality process in Input->Process->Output + Tools/Techniques form and aim at increasing the visibility by monitoring the time taken for each of the steps and entering the defects generated at each stage - once I get this practice matured in 3-6 months, then I will think of using any automation for this one

b) We will create the lead processing in a small excel sheet - track the movement of the lead from inception to the order conversion to establish the sales cycles - we can think of the CRM system later

3.1.3. Keep an approach to Question Investment: Till it is really required to be invested as money, try to get your creativity working and find a frugal solution to the problem at hand

3.1.4. Measure the benefits regularly: Have a discrete measure to be able to quantify the results e.g. number of defects, number of manhours, time for machine down, time taken for operation etc

4.???? RIGHT EXPECTATIONS WITH STAKEHOLDERS : Never commit that a) this will increase OEE or b) we are going to implement AI/ML in our factory or c) we will establish the image-based intelligence system for our Quality process .. lets commit for something we could achieve in 1 week, 2 weeks, 4 weeks.. like a) we will document the Quality Management Process or b) we will establish the inventory management using a simple excel based tool or c) establish the OEE calculator for one or two machines .. each of

5.???? BIG BANG Vs INCREMENTAL : Leverage SCRUM / Agile Methodology [2] already established in the IT Industry. Let's leverage the strengths and maturity of the tools/techniques from the already-established industry. The 5 SCRUM values [3] are key to success for splitting the larger scope of work into smartly executed chunks of customer-usable and stakeholder-approved small success stories

6.???? ESTABLISH RESULTS, RECORD and CELEBRATE: Its essential to acknowledge the smaller successes a) the team is now able to calculate OEE, though through manual data collection and some known limitations, b) the team is able to get the visibility of the in-process inventory levels, though its based on the manual counting and we have still to implement the optical sensors to build the auto-counting in place) - let's appreciate that and document it for future reference. The baselining of incremental success does not only act as a tool to answer any one having any doubts, the management and also drives a sense of achievement and collaboration within the team

7.???? COURSE CORRECT : Review the progress/results incrementally weekly (ideal frequency), twice a month, monthly or quarterly - any larger duration than 3 months, is a "recipe for disaster" .. will result in expectations mismatch, difficulty in course correction costs higher for the changes to be incorporated, dishearten team, rework and hence cost/schedule/scope overrun .. Review every week and honestly accept any constraint/limitation from any of the team member (might be a very low cadre) and change the course => revise the expectations - will NOT be a large change, due to the review duration - communicate with everyone for the change and get formal acceptance

>> Success Stories of Frugal Approach :

·?????? Casestudy 1 : A SME in India, has implemented the OEE measurement leveraging a manual data entry mechanism - a) Availability - getting entered by the operator for the time the machine is NOT processing any jobs and also down for maintenance (breakdown and preventive) b) Performance - every "OK" marked component, gets scanned with its RFID so that the time-out from this station is marked - this helps to measure and compare the Performances between the Machine A and Machine B c) Quality is punched in by the operator for the number of defects generated getting entered in a Google Sheet by classification for the shift-of-operation.. So actually, when one is trying to implement any of the levers in the Industry 4.0, check honestly what we are achieving and find a simple way to achieve it, no need to demand high-tech instruments / complex mechanism and highly sensitive devices

·?????? Casestudy 2: ABB, the Swiss-Swedish electrical equipment supplier, fitted accelerometers and temperature sensors to 30 pumps for 30 months. [1] The sensors were connected through a wireless sensor network to an edge server. A machine learning software analyzed the frequency spectrum of the vibrations. With this vibration data, a series of problems could be recognized early, such as misalignment, unbalance or cavitation. The result was a monitoring tool for the condition of the pumps, which allowed early identification of potential problems to help prevent unexpected downtime.

This example shows that manufacturers do not need to purchase a new machine with embedded connectivity or overhaul the way they currently manage equipment maintenance. Adding an accelerometer is enough. Realistically, many Industry 4.0 transformations can be achieved in a similarly easy and cost-effective manner.

·?????? Casestudy 3: Retrofitting IoT devices to legacy machines remove problems related to compatibility and obsolescence — common issues for manufacturers investing in brand-new technology to work alongside legacy equipment. Obsolescence is the natural consequence of continuous advances in technology and Industry 4.0 exacerbates this. It is impossible to eliminate obsolescence completely but taking the retrofitting approach to Industry 4.0 can lessen the potential impact.

>> Conclusion : With this frugal approach SME and larger corporations will be able to manage the Industry 4.0 projects in more granular ways, spending the minimum to get the maximum returns - being always "minimalistic" along the path with minimal course correction - hence delivering the projects within cost budgets/schedule and scope committed. Thus Industry 4.0 projects will get the required boost for adoption by each of the SME and larger corporates to demonstrate the required business compulsions of visibility, stability, control, predictability, and bettering the business results like top-line and bottom-line

References :

[1] Incremental steps can yield Industry 4.0 benefits : https://www.embedded.com/incremental-steps-can-yield-industry-4-0-benefits/

[2] Scrum Methodology: An Introduction to the Scrum Process : https://www.projectmanager.com/blog/scrum-methodology

[3] What Are the 5 Scrum Values? https://www.wrike.com/blog/scrum-values-guide/#:~:text=The%20five%20Scrum%20values%20are%20commitment%2C%20focus%2C%20openness%2C%20respect,in%20living%20these%20five%20values.%E2%80%9D

[4] Jugaad: A New Growth Formula for Corporate America

by Navi Radjou, Jaideep Prabhu, and Simone Ahuja

·??????? https://hbr.org/2010/01/jugaad-a-new-growth-formula-fo

[5] Has Industry 4.0 failed? https://zaptic.com/has-industry-4-0-failed#:~:text=Lack%20of%20Clear%20Goals%3A%20Without,how%20to%20track%20progress%20effectively .

[6] Analysis of Barriers to Industry 4.0 adoption in Manufacturing Organizations: an ISM Approach ?: https://www.sciencedirect.com/science/article/pii/S2212827121000330#:~:text=The%20identified%20barriers%2C%20through%20comprehensive,investment%20requirements%2C%20lack%20of%20infrastructure%2C