Transform to Industry 4.0 Part 4

September 16, 2021

The cost-benefits and cost-effectiveness factors play a priority role in the decision to transform into an Industry 4.0 organization. In this article we discuss the benefits of Industry 4.0 Transformation in order of activities from the 2nd article (1. #Digitization, 2. #Digitalization, 3. #Digital Transformation) so that you can choose the appropriate steps to apply within your organization.

1.      Establish a digital record

a.      Create a wider and more detailed view of your business and access information faster.
         The ability to recognize the possibility of improving business processes from collecting data and developing visualizations using reports or dashboards. 
For example, installing sensors from machines and electric meters to track energy consumption per production and compare the cost-effectiveness of machines.

 b.      Capture historical data of all business operating processes
         By storing records over a long period of time, we can see the history and changes in the business to compare and follow up on the results of the changes and observe trends. For example, comparing machine performance to plan maintenance or make decisions to replace the machine in case the efficiency deteriorates until it cannot meet production demands.

 c.       Increased Knowledge Sharing and Collaborative Working
         
If the information has been stored in digital format, then it can be used for communication between departments or organizations to facilitate and build collaboration capabilities, such as sharing production data between partners for planning to make efficient and consistent production on both sides

 d.      Makes Compliance Easier
         
Reduces the risk of information not being available for inspection or traceability in order to meet the requirements, rules, or policies of the organization. Furthermore, information can be checked at any time with more detail and accuracy.

2.      Creating a process for using the information with business activities

a.      Improved Productivity and Efficiency
         Be able to produce more and faster while allocating your resources more cost-effectively and efficiently. For example, production lines experience less downtime due to improved machine monitoring and automated/semi-automated decision-making. In fact, Overall Equipment Effectiveness (OEE) generally improves as your factory moves closer to becoming a Smart factory on Industry 4.0.

b.      Reduces Costs
         i.      Better use of resources
         ii.     Faster manufacturing
         iii.    Less machine and production line downtime
         iv.    Fewer quality issues with products
         v.     Less resource, material, and product waste
         vi.    Lower overall operating costs​

3.      Changing business models to increase efficiency and create an advantage

a.      Flexibility and Agility
         The ability to adapt will be enhanced by using data as a basis for decision-making and improving things in the organization.

For example, if a customer wants to order a new product, we can use the existing data as a basis for analyzing the capability, manufacture machine selection, cost estimate to produce, or use the information as a component to negotiate with customers.

b.      Creates Innovation Opportunities
         Greater knowledge of the manufacturing process, supply chains, distribution chains, business performance, and even the products you manufacture. This creates opportunities to innovate, whether that is changing a business process, developing a new product, optimizing a supply chain, improving OEE, and more.

 c.      Increased Profitability
         Having opportunities to improve the services offered to customers and improve the customer experience, such as the ability to automate production progress tracking or traceability and fixing problems quickly, reduces product quality issues, and makes it easier for customers to work with us.

 d.      Better Customer Experience
         Producing higher quality products and/or more innovative produces while also improving profit margins. For example, by fully automating or semi-automating your production line using other composite technologies, you can expand your production capacity without increasing employee costs to meet growing demand or to adapt to new competition that may occur in the future.

In the next section, we will discuss how these benefits are compared with costs to assess the return on investment (ROI).

If you would like to learn more about how to improve the platform based on the industry 4.0 concept or would like to see examples of the technology's application in different areas, please contact BizOne for a free consultation!