25 Sep
2019

Industry 4.0 and Efficiency - A Global Perspective

Industry 4.0 is driving manufacturing efficiency on a global scale. Get connected to the latest high-powered research on Industry 4.0 and Efficiency here.

Industry 4.0
Industry 4.0 and Efficiency - A Global Perspective

Industry 4.0 Over Time

2011

By many accounts, the term ‘Industry 4.0’ was coined in 2011 (originally “Industrie 4.0”) by Henning Kagermann, head of the German National Academy of Science and Engineering.

2014

By 2014, Germany was actively assessing the potential impacts of Industry 4.0 and determined at the time that “Only 6 % of those surveyed believed their company was fully ready for Industry 4.0, whereas 55 % of respondents stated work to prepare for Industry 4.0 was not yet under way.”

2016

Fast forward to 2016, only two years later, and PwC’s 2016 Global Industry 4.0 Survey, touted as “the biggest worldwide survey of its kind, with over 2,000 participants from nine major industrial sectors and 26 countries.” concluded that “Industry 4.0 investments are already significant and our research suggests that global industrial products companies will invest US$907 billion per year through to 2020.”

2019

In January of this year (2019), Deloitte produced a somewhat similar survey to the PwC report, (in the Deloitte Review, Issue 24, you can download here) and found that among the manufacturing organizations surveyed, “94% of respondents agreed that digital transformation is a top strategic priority for their organization”. They also noted that a brand new key role is being adopted by many larger manufacturers, the CSCO or Chief Supply Chain Officer, whose mandate is to accelerate the adoption of Industry 4.0 technologies.

Industry 4.0 Today

Manufacturers are implementing the CSCO role because Industry 4.0 has both vertical, and horizontal dimensions. Vertical implementations generally mean applying Industry 4.0 technologies within their own organization in order to provide the right actionable analytics to the right role at the right time. Horizontal implementations imply connecting disparate stakeholders and value chain participants across a supply chain so that feedback runs from demand back to supply and vice versa.

Companies are generally focused today on vertical implementations and yielding significant results, while horizontal implementations are still nascent but envisioned to be coming soon. Therefore,  as companies get their internal Industry 4.0 house in order, they’re already assuming that connecting to other stakeholders is inevitable, and hence the ‘Supply Chain’ in the CSCO title.

Industry 4.0 and Manufacturing Efficiency_A Global Survey

Industry 4.0 Framework - Image Courtesy Deloitte Consulting 

Even though Deloitte’s Industry 4.0 framework (above) includes a wide range of technologies and capabilities,  according to the PwC report reference above, “The major focus of this investment (Industry 4.0), near term will be on digital technologies like sensors or connectivity devices, as well as on software and applications” - (like Worximity!). Further, they note that “More than half of respondents expect their Industry 4.0 investments to yield a return within two years or less, given investment of around 5% of their annual revenue.”

In other words, manufacturers around the world have accelerated from Industry 4.0 to being a largely academic concept, to producing short ROI timeframes, with sensors and software, in less than 10 years.

Where is this ROI coming from? It’s a mixture of things of course. In some cases, it’s being driven by new products and services that are Industry 4.0 enabled, for instance manufacturers who are embedding analytics capabilities into their own products in order to foster new services businesses. 

Largely though, the ROI is being driven by higher efficiencies and the resulting cost savings. According to PwC, Industry 4.0 was found to be driving “cost reductions of 3.6% on average” and that “digital technologies enable shorter operational lead times, higher asset utilization and maximum product quality; all told, our survey respondents expect to save US$421 billion in costs each year for the next five years.”

Clearly, there’s something going on here!

In fact, there is. BDO has concluded that “Industry 4.0 presents a generational opportunity: to operate more efficiently, to manage risk more proactively...decisions are made faster...supply chains (are) tighter, resources go further than ever. No, it’s not hype. No, it’s not consulting’s latest catch-phrase. Industry 4.0 represents a quantum leap forward in operational efficiency and value creation. It is the next industrial revolution.”

BDO goes on to say in their article, From Continuous Collaboration, Countless Efficiencies, “Industry 4.0 brings numerous time-saving, cost-cutting, resource-maximizing benefits to supply chains across industries. Even incremental improvements have measurable results. Disruptive events can be modeled across a range of scenarios. So when dealing with the inevitable surprises of real-world supply chains, the response is no longer to just “wing it.” Adapting happens both more quickly and more effectively.” 

Not only does Industry 4.0 produce manufacturing efficiencies as you’d conventionally think of them (less waste, less downtime, higher productivity, etc.), creative engineers are realizing energy efficiency gains from Industry 4.0 as well.

Leading academics, manufacturing industry leaders and the smartest strategic consultants have all converged on one conclusion, that Industry 4.0 is real, that ROI is significant, and that this ROI is driven largely by manufacturing efficiency gains.

 

Do you want to start achieving your own Industry 4.0 efficiency gains? Download our guide here!

 

Want to learn more?
Download the ebook
Related blog articles

Related articles

Back to the blog
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
9
Jan 2024

Manufacturing Trends to Lookout for in 2024

English
3
Aug 2023

Embracing IIoT: The Smart Path for OEMs to Thrive with a Leading IIoT Smart Manufacturing Partner

English
21
Jul 2023

CDAP: $15,000 Grant To Jump Start Canadian Manufacturing Digital Transformation Projects

English

Related articles

Back to the blog
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
13
Jul 2023

5 façons dont le monitoring de la production aide à réduire le roulement et à combler le manque de compétences

La technologie a un rôle important à jouer non seulement pour combler le manque de compétences dans le secteur manufacturier, mais aussi pour créer un environnement de travail positif et stimulant qui favorise la loyauté et la rétention des employés.

French
13
Jul 2023

5 Ways Production Monitoring Helps Reduce Turnover and Bridge the Skills Gap

Technology has an important role to play in not only bridging the manufacturing skills gap but also creating a positive and engaging work environment that fosters employee loyalty and retention.

English
28
Jun 2023

Investir dans l'industrie 4.0 : c'est désormais plus important que jamais pour les manufacturiers d’agroalimentaire et boissons de toutes tailles

La clé est d'adopter l'innovation pour naviguer dans des conditions en constante évolution et rester à l'écoute des demandes des consommateurs, tout en maximisant la rentabilité.

French