What we can learn from open water swimming when implementing Industrie 4.0

This month I attended the annual summit of German industrial manufacturers (Maschinenbaugipfel) in Berlin. The meeting was of course dominated by the Russian war and the effects on the economy: volatility and uncertainty of supply with energy, raw materials and components of all sorts. Generally, digitization is regarded as a key ingredient to better cope with these type of situations, which then immediately led to the question: "How far are we with Industrie 4.0 in Germany?"

Almost as an answer to this, the Frankfurter Allgemeine Zeitung had a headline next morning stating: "Ten Lost years", quoting Michael Finkler of proALPHA saying that "we are at the productivity level of 2011". While most of the participants did not want to go that far, there was a general consensus, that indeed, the implementation of Industrie 4.0 initiatives were not as successful as they could have been. And that is mainly for 3 reasons:

1. Technology Focus: Many Industrie 4.0 projects started with a focus on enabling technologies rather than the aspired business goals. Rather than thinking about intended business outcomes first, project teams dug deep into sensor technology, IoT stacks and network standards.
2. Bottom Line over Top Line: Where projects did look at business goals, they did this predominantly inside the own for walls on the factory floor. But that means focusing on cost savings (yes, and quality increase) and thereby mainly the bottom line. However, Industrie 4.0 is not a factory optimization program - it is (or at least should be) an initiative to increase customer value and thereby the top line.
3. Siloed approach: Now, in order to create customer value and influence the top line, companies need to establish new processes and practices across the entire value chain, bridging internal departmental silos. For example the much quoted outcome based business models require an integrated approach by product development, sales, service and the internal finance department. Many companies have not been able to create the necessary levels of internal cooperation.

So there has been a lot of resistance and head wind which led to the perception that progress was not as good as it could have been.

Which brings me to my analogy of open water swimming: As you probably guessed already, I am an open water swimmer and on a good day in calm water I can do 3 kilometers in about an hour. But recently I swam just off of Langeoog - a small island in the north sea - and got caught in the tidal current. So, one hour of vigorous swimming brought me exactly nowhere - I simply stayed where I was. But then, if I had not continued to pound the water, I probably would have been pulled out to sea.

Now I am thinking, what would have happened to our industry, if companies had not engaged in Industrie 4.0 initiatives? Would we still be where we are today or would have the currents and head winds swept us backwards even further? Would we have been able to maintain our competitive position like we did? Probably not.

So in closing, here are my recommendations when engaging in Industrie 4.0:

• Customer first: What additional value are you creating and how can that be monetized?
• Think end to end: Which processes need to change, who needs to contribute and which systems need to be integrated?
• Think big and start small: Define tangible small steps, validate results early and create executable scenarios with every iteration.

And if we do these things right, Industrie 4.0 will not only help us to maintain our current position, but it will bring us forward in a world that has just entered a new era of disruption and competitiveness.