It’s not in the what or why. It’s in the how.
Manufacturing CEOs fully recognize the importance of Industry 4.0 (i4.0). They know that automation will enable faster cycle times and changeovers, helping to remove significant waste and downtime. Machine learning and predictive analytics will enable continuous improvement. Forecasting will be highly reliable; R&D will be highly collaborative; quality will be highly assured.
Equally important, manufacturers know that leveraging i4.0 approaches ‘at scale’ can lead to constant improvements in value and performance.
However, few manufacturers possess a clear roadmap for scaling up their i4.0 activities and investments. Fewer still can boast alignment between their i4.0 initiatives and their long-term strategic objectives at any significant scale.
The problem is not in the what or why. It’s in the how.
Recently, a team of KPMG’s Manufacturing professionals conducted research and benchmarking to determine the current state of i4.0 initiatives in the manufacturing sector.
The results of this research have been published in our report, Beyond the hype: Separating ambition from reality in i4.0.
Across the industry, we found that pilots and individual projects are not delivering sustainable performance improvement, so scaling is essential. However, manufacturers have not sufficiently scaled their deployments of i4.0 technology and capabilities to deliver enterprise value. Achieving that scale will take careful planning and new approaches to integration. Organizations that lack one version of ‘the truth’ across multiple legacy IT estates and siloed functional data systems will have to reconsider their overall IT strategy and how that aligns to business goals.
During our research, we also sat down with key decision makers from some of the world’s largest, most innovative manufacturers to talk about how they are leveraging i4.0 at scale. We asked them about their strategic approach, their investment strategies and their long-term expectations. And we asked for an honest assessment of where they are today.
We found that today’s leaders are working to embed their transformative i4.0 technology investments into their wider operations and corporate strategies as well as performance objectives. Key actions by leaders include the following:
They focus on breaking down silos. Our benchmarking exercise indicates that the leaders are working across research and development (R&D), purchasing, operations, sales and marketing to identify opportunities for collaboration and mutual value generation. They are more likely to be engaged in cross-border work aimed at creating an integrated i4.0 landscape. And they are more likely to be working to integrate the customer perspective into their core processes.
They improve the agility of their IT infrastructure and processes. The leaders said they wanted greater agility to facilitate the integration of Industry 4.0 processes. They also were carefully considering the potential impacts on processes that the adoption of i4.0 might create across the wider organization.
They think holistically about the interdependencies. In our discussions, the leaders take a strategic view of the related impacts and potential consequences of their i4.0 initiatives. They think strategically about developing the necessary competencies across the enterprise and within the value chain. And they are more likely to have considered the possible impacts of their i4.0 agenda on their financial and business models.
Massive value awaits those with the right roadmap for scaling up their i4.0 success. Those without a clear direction and strategy will risk being left behind.