Beyond the Buzzword:
As “Industry 4.0” achieves buzzword status, many companies are making Industry 4.0
investments in the form of pilots spearheaded by CIOs and manufacturing executives,
notes Tom Mayor, the KPMG partner who serves as the global leader of his firm’s supply
chain center of excellence. Mayor suggests that companies can generate greater value
from Industry 4.0 investments by treating it as a more comprehensive and strategic
opportunity supported by C-suite planning first, and then designing a portfolio of initiatives
to pursue. This is just one of several common challenges manufacturing consultants are
helping clients address; others include:
1. Thinking small: A new 3D printer can lead to incremental improvements in inventory
carrying cost; it can also enable a supplier to build a better fuel inlet nozzle that
reduces the amount of fuel an airline engine burns, Mayor points out.
2. Individual business cases: Rather than treating Industry 4.0 as a portfolio of
investments, companies tend to rely on traditional ROI measures and payback
schedules typically associated with one-off projects. Yet, insights gained from one
failed technology pilot can drive the success of a much more valuable initiative
down the road. Many manufacturers “need a new way to evaluate these projects,”
says Vladimir Lukić, a Boston Consulting Group partner and managing director
who is a member of the firm’s industrial goods, operations, and people and
3. Analysis paralysis: Manufacturers are confronted with a staggering number of
Industry 4.0 choices. “There are an overwhelming number of use cases,” says Peter
Hanbury, a Bain and & Company partner and the leader of the firm’s manufacturing
excellence practice in the Americas. The same holds true for technology vendors.
“Take any category [of technology] and you’ll find 50-plus vendors that can do it
decently,” says Lukić. “That can create a little bit of analysis paralysis… companies
can get stuck in time-consuming exercises figuring out the right vendor.”
4.Scaling: Many Industry 4.0 pilots can be conducted quickly and inexpensively.
Lukić recalls a project integrating sensors and related technology into 20 machines
that took two weeks. Happy with the results, the client requested the same work
on 1,000 machines—an effort that would take roughly 500 days unless significant
changes were made.