Few, if any, manufacturing ceos doubt the importance of industry 4.0. This is not just because it has become the title of every meeting, magazine and board agenda in 2017. More because of the significant value and performance improvements that can be guaranteed by using the industry 4.0 approach on a large scale.
The vision drawn by the sponsors is seductive. As data and Numbers flow through production, operations and supply lines, friction in supply chains and operations will eventually be released. Automation will achieve faster cycle times and transformations, eliminating significant waste and downtime. Machine learning and predictive analysis will achieve continuous improvement. Predictions will be very reliable; Research and development will be highly collaborative; The quality will be highly guaranteed.
For chief executives, this may sound like a panacea for many of their current ills. Everyone knows that the manufacturing environment has changed. And manufacturing leaders are feeling the pressure of more customer choice, a surge in sales channels and a shortening of the product life cycle. They see their purchasing networks become more complex, and demand for faster conversion and meeting time is shrinking. Operational stability is increasingly challenged.
Talk to any manufacturing chief executive and they may abandon the “industry 4.0” initiative they are organizing. But to get a little deeper, it will soon be clear that most, if not all, of the pilot projects are intended to address specific pain points or isolated performance problems. There is rarely a clear roadmap for expanding their industry 4.0 activities and investments. There is still less contrast between their industry 4.0 and any significant size of their long-term strategic goals.
At KPMG, we see the shift towards industrial 4.0 is an evolution – a series of performance improvement of ability, technology, method and the method, if combined and applied to the specific business challenges, but for those who take a strategic approach to bring the advantage of the unprecedented. To be clear, industry 4.0 is not about technology. This is not about big data. This is about performance.
As a result, most of the chief executive’s real problem is how to use 4.0 for its industrial organization change rules of the game of performance improvement, not only through operation improvement, also through the use of their insight to build an end-to-end industry operating model in the form of hard to imagine that ten years ago.
Recently, as a part of the global benchmark, our manufacturing professional team with some of the biggest in the world, the most innovative manufacturers of key decision makers to sit down and discuss their methods of industrial 4.0. We asked about their strategy, investment strategy and long-term expectations. We demand an honest assessment of the situation today.
What we found was a group of leaders who were increasingly focused on how to improve strategic alignment between their business goals and industry 4.0 investments. But we also find that most people continue to try to shift from pilot to profit – in order to achieve the scale and integration needed to deliver truly sustainable results.
It’s a shame. Great value awaits those who have the right road map to expand their industry 4.0 success. Those without a clear direction and strategy will face the risk of being abandoned.
As we release our industry 4.0 benchmark report within the next few weeks, stay tuned.
Everyone wants to talk about i4.0. From industry conferences and magazines to board meetings and shareholders’ meetings, i4.0 is the top priority of the agenda. The pressure on executives to adapt and compete is huge.
In this environment, manufacturing executives need to separate hype from reality. They need a clear understanding of current risks and opportunities. They need to understand what their peers and competitors do to promote value and capture competitive advantage.
This report provides a realistic perspective on the current situation of i4.0 and the preparation of the entire market. It is based on a series of in-depth benchmarks with major industrial manufacturers around the world. It also identifies how today’s market leaders use a comprehensive i4.0 strategy to change their business model, operating model and value chain.
It also provides practical advice to those trying to adapt and compete in technology-driven markets. To discuss the topics covered by this report, please email or contact your local KPMG office.