Why Would Industry 4.0 and IT/OT Convergence Matter to Business Executives? (Cont'd)

Last Wednesday November 10th we have discussed about the IT/OT convergence and have used a real example of IoT applied at the product level explaining how Industry 4.0 and digital transformation should be understood in the business context.

Let us now deep dive into the Industry 4.0 domain, and understand how it can bring your business into another competitive level.?

What are the most common Industry 4.0 technologies??

IoT can be applied to devices, equipment in manufacturing sites, or any other assets, to pro-actively indicate maintenance needs, increase performance, increase availability, among other use cases. The usage of IoT in industrial environments is called IIoT (Industrial Internet of Things).

IoT can also be applied at the product level via barcoding and smart devices such as RFID tags, BLE (Bluetooth Low Energy), NFC (Near Field Communication), and others. The concept of identifying uniquely each individual unit of a product and tracking it throughout the supply chain until it reaches the end consumer is called Product Traceability.

Many industry sectors are nowadays investing time and resources to deploy such processes (e.g., Food & Beverage, Pharmaceuticals, Tobacco, Electronics, Apparel, others). Brand protection, enhanced recall management, smarter warehousing operations, supply chain visibility, better inventory management, mitigation of counterfeit and parallel trade, sustainability, among others, are some of the benefits this traceability process brings to businesses across the globe.

Enhanced consumer experience by connecting smart labels to mobile applications, bringing consumers right in the heart of marketing campaigns, consumer retention strategies, information about raw materials provenance, are examples of other use cases more consumer oriented.

IoT can also be applied to logistics processes by tracking products in transit within a vessel, an airplane, a train, or a truck for example. The opportunities with enhanced visibility are endless.

Cloud Computing is another Industry 4.0 technology, and it comes as an enabler for data driven decisions. It doesn’t matter where the information is coming from, how it is collected and how it is shared, as long as it is consolidated and processed in the cloud. Accessibility is the current watchword. Mobile applications feeding or consuming information from the cloud, dashboards, real-time operations visibility, business insights and other advantages are heavily explored nowadays, taking advantage of master data and transactional data consolidation in these sophisticated platforms.

Big Data also can be considered a technology that helps and supports Industry 4.0 strategies. This is about unstructured data that can come from any source: documents, news websites, social media content, and others.

Some companies are nowadays using structured data (e.g. inventory levels at retail stores), in combination unstructured data (e.g. holidays, weather condition, news on the web), to better forecast sales on a given geographic location during a specific period of time. For example: a holiday happening on a Friday or Monday, combined with rainy weather and a positive perception about the safety of being in public places during the pandemic, can pro-actively tell a chain of retail stores that in a given weekend they will need 20-30% more inventory at the stores located at shopping malls as crowds tend to concentrate on these places under such conditions. Everything related to inventory movements can be anticipated and sales are not lost.

AI/ML (Artificial Intelligence and Machine Learning) are additional Industry 4.0 technologies that are booming up everywhere. Business insights, data driven decisions, more visibility about business operations, insights about product flows and consumer behavior can easily create competitive advantage to any organization. The right time to do the maintenance in a manufacturing equipment/asset, automatic quality checks and visual inspection at packaging lines, just-in-time operations enablement, indication of goods diversion and counterfeited products via smart labels or barcodes scanned by supply chain partners or consumers, suggestions of online content related to the products that people are consuming, are very simple examples of opportunities driven by AI/ML.

Finally, Advanced Robotics is the use of smart machinery to perform repetitive tasks in industrial environment. Compared to early generations of robots, the new robotic systems bring a superior perception, adaptability, integrability, and mobility. As the usage of robots grow within the industry in general, costs to acquire, operate and maintain such systems also decrease, helping to increasing affordability and access to such solutions.

Conclusion

In the past, OT had no evident integration with IT. End-to-end use cases were not much explored. From an IT perspective, applications were siloed, even though they were still bringing a significant ROI, but without an end-to-end and strategic long-term vision.

Nowadays, companies have all the tools to ensure interoperability, integration, and end-to-end perspectives are brought into business models. Competition among solution providers, cloud platforms, equipment, and devices suppliers, combined with a more massive adoption of technology, are bringing implementation costs down significantly.

The complexity however resides on a typical fragmented business setup. Lack of true integration across functional areas, legacy software solutions, difficulties to consolidate data from disparate systems and business processes, lack of internal alignment, are some examples of roadblocks to true digital transformation that many companies still face nowadays.

In this scenario, the best antidote is to invest on Change Management techniques as a toolbox for the workforce to transform its mindset towards a digital culture. Digital transformation will never occur without a Mindset transformation. As already mentioned previously, digital transformation is not about deploying technology, but it is about a transformation of the business.

WeDigit is a boutique consulting firm specialized in supply chain management and digital transformation. All recommendations and best practices shared in this article are based on our hands-on experience with digital and global programs. Count on us if we could be of serve in any of these topics in the context of your organization.

We also hope the basic concepts related to business digitalization, Industry 4.0, as well as the right angle to look at technology adoption are now making more sense to you!