How to Formulate a Future-ready, Long-term Industry 4.0 Strategy

In a study done by IBM’s Institute for Business Value, 60% of the C-suite executives say that they have accelerated process automation and will continue to do so in the future. How to build a future-proof long-term, growth digital transformation (DX) strategy when manufacturers are faced with unforeseen challenges brought on by extraordinary circumstances? We propose to go over the following parameters to formulate an inclusive long-term DX strategy.

Assess Your Company’s Digital Initiatives

With the price of vision-guided robotics declining, some plants had already started an automation plan pre-pandemic. However, merely replacing processes with machinery or robots does not guarantee a future-proof strategy. Companies must take new workplace possibilities such as physical distancing, employee temperature screening and remote working into long-term planning. Organizations can start by taking inventory of existing digital initiatives and then assigning them with a priority level. The Digital Business Acceleration framework published by Gartner is a useful tool.

Five different priorities can be assigned to your plant’s digital initiatives:

  • Fast lane
  • Grown lane
  • Fix-it lane
  • Slow lane
  • Exit

Some national food producers would fall under the “fast lane,” where their technologies and skilled workers provide these plants with great flexibility and scalability. These plants’ data processing incorporates both edge and cloud computing. Data captured by vision systems is processed at the machine level for inspection first. It is then transferred to the company cloud, where AI processes it to identify anomalies or trends. This operational model facilitates teleworking, which is most likely to stay even post 2020. These organizations are on course to fully realize their DX potentials.

Traditionally, the food manufacturing sector was relatively slow to adopt automation solutions. According to the Gartner digital acceleration guideline, most food producers would fall under the “growth” and “fix-it” lanes. Growth lane refers to digital initiatives that would help the business capture “new/unmet customer needs” and meet new safety compliances. “Fix-it” lane entails processing plants investing in technologies that can be scaled up or down with agility. Plants in this lane are harder hit with changes and take longer to recover. They should divert all available resources to upgrading equipment that would meet social distancing requirements, reduce overall production costs and retrain workers to utilize these new technologies.

Ask These Questions and Formulate Strategies

Once manufacturers have identified where they stand on the DX continuum, leaders should ask themselves the following questions. These questions are designed to help them check off blind spots before kicking off any programs.

1. Is there an organization-wide understanding?

A key concept that needs to be embraced by all employees and management is that automation replaces tasks, not jobs. Jobs consist of a multitude of subtasks and activities. Top management should identify which tasks could be automated to transform organizations and enrich their workers’ lives. Keep in mind that a future-ready digital plan does not translate to having only digital capabilities. Complete reliance on technology (e.g., a lights-out factory) can be highly inflexible for an industry that handles perishables or fast-changing demands.

Decision-makers must see that machines are inherently more suitable for repetitive and well-defined tasks that they execute with higher output levels, better quality and fewer errors. However, humans have the flexibility and adaptability that machines lack, so they are suitable for complex, critical-thinking tasks, such as flavour innovation or product testing. The best way is to facilitate a human-in-the-loop model whereby machines complement tasks performed by humans.

2. What is the reason for investing in digital technologies?

Before the pandemic, nearly half of the companies in this survey ranked cost savings as the main reason to automate. However, the pandemic has exposed this plan’s short-sightedness and left many companies using cost-cutting technologies incapable of quick adoption. For example, without a 3D vision system in place, it is difficult for a cake manufacturer producing multi-servings to scale down suddenly to make servings appropriate for households.

Companies faring well through crises did not make investments solely in cost-cutting technologies. Instead, they focused on systems that improve workers’ lives and raise product quality and throughput. Looking beyond just financial ROI’s, they have built a business with operational scalability and flexibility. These businesses are built for change. But most importantly, their DX strategy IS their core strategy that drives their businesses forward, rather than a source of cost reduction.

3. What’s the overall mindset?

Factories who have recalibrated their DX goals to generating more manufacturing values rather than keeping costs down also promote an overall “growth mindset.” Carol Dweck of Stanford University initially proposed the idea. Growth mindset is the belief that new capabilities can be developed through learning and practicing. In the context of modern manufacturing, this means fostering a culture of responsible pilot programs and learning from mistakes to improve processes.

As best practices are often found in production line workers, when they are empowered to take creative digital initiatives, plants can benefit from digitizing the tacit knowledge that is traditionally difficult to document and full of inconsistencies. Revamping the way organizational knowledge is managed and shared further creates transparency and resilience against adverse situations and times. All of which are benefits beyond simply calculating for financial returns.

4. What is the change management strategy?

Operational changes can impact workers who feel threatened by digital technologies. A proactive change management program with a transparent communication plan should be in place to lessen resistance.

  • Involve your stakeholders: Stakeholders should not be limited to employees of the company. Instead, it should include individuals and families living in the surrounding areas as their livelihoods are often tightly dependent on these plants.
  • Present what will be improved: A comprehensive plan backed by data and conveys thoughtfulness and compassion will garner support from both the management and the employees. Having transparency in communication also helps manage resistance, which usually results from a fear of the unknown.
  • Recognize milestones: Making significant achievements known to all stakeholders gives recognition to project members. It also encourages further adoption of changes.
  • Review and revise: Change management is a continual process that learns from its faults. Keeping an open mind and taking swift actions to identify problems and improve from mistakes will ensure the process results in a positive outcome.

5. What are your upskilling programs?

The reality of manufacturing automation is that 3D vision systems, edge computing and artificial intelligence will be a part of plant workers’ daily lives. Upskilling workers from rote operational skills with digital skills such as software development, computer programming or data analysis will improve the collaborative human-machine relationship. With organizations more willing to reskill workers than hiring externally, employee upskilling initiatives are becoming integral in succeeding digital transformations.

Technical skill training should be accompanied by training in interpersonal skills and emotional intelligence. Human teams will be increasingly important to think across domains. The pandemic has proven that organizations that can act fast rely on humans transforming data into actionable intelligence. Workers with interdepartmental communication skills break down workplace silos and add to a company’s flexibility and agility, especially in unprecedented times. Employees trained in emotional intelligence would also remain calm and positive in a crisis.

Future-proofing DX strategies for automation start with leaders asking these questions.

Moving Forward

The opportunity to calibrate and realign your organizations’ digital strategy and grow new capabilities is now. Complying with new physical distancing rules may have sparked a few manufacturers to automate production lines further. The long-term win-win scenario lies in redesigning work and responsibilities that create values for your customers and your workers simultaneously.

Digital transformation in the era of Industry 4.0 encompasses digitizing your data as well as automating your processes. Senior management must step out of the organizational comfort zone and recognize that Industry 4.0 manufacturing is value-generating and fueled by technologies and that the traditional “cost-cutting” mentality is an inhibitor to growth. In the wake of a global pandemic, fortifying your factory floor to be physically and emotionally fit for workers will become the new norm.

Finally, manufacturers, especially those in the food industry, cannot overlook the importance of agility in their business processes. Extending the company’s change management program to focus on learning and training the current employees will increase engagement and retention. Creating a symbiosis of collaborative human-machine relations will foster organizational agility that is impossible to replicate, especially when the pace of change is unlikely to slow down.

If your organization is thinking about automating but unsure where to start, give us a call or contact us. If you are curious about how machine vision can be the key to unlocking automation, you can read more about it here.