Industry 4.0 —the fourth industrial revolution that is bringing an increasing level of digitization, automation, and inter-connectivity to the manufacturing sector—is well underway. Cloud computing, big data, greater capabilities in analytics and business-intelligence, advances in artificial intelligence, as well as the continued development of the industrial internet of things (IIoT) are all driving change in the manufacturing industry.
Manufacturers need to both understand and
embrace these changes in order to stay competitive. Companies that have already
started to adopt new technologies, such as IIoT, are seeing a 7% revenue growth
advantage over their peers, according to a report by McKinsey.
And the economic and social downturn caused by
the current COVID-19 crisis will only deepen the divide between manufacturers
who have just started to digitize, and those who are much further along on
their digital journey.
Luckily many manufacturers already have a tool
in their arsenal that is helping them to embrace Industry 4.0, and putting them
on the right side of the digital divide: An ERP system.
Today’s ERPs aren’t just about replacing
back-office functions and systems like inventory management, accounting, order
fulfillment, and shipping: Today’s ERPs not only include these important
functions but also automation, analytics, and business intelligence—all
important elements of Industry 4.0.
ERPs—and learning to harness the full power of
an ERP system—are one the most important steps manufacturers can take towards
Digitization of the Manufacturing Industry
The first digital revolution to disrupt the
manufacturing industry was in the late 1960s when computers were introduced and
completely changed how manufacturers did business.
Now technologies such as big data, IIoT, and
cloud computing are vastly increasing the connectedness of computing
technology—and are changing the game again. As Industry 4.0 unfolds, computers
will continue to connect and communicate with one another, and ultimately make
decisions without human involvement.
Perhaps Forbes summed it up best when they
said: “Industry 4.0 optimizes the computerization of Industry 3.0.”
Manufacturers need to take these innovations
seriously and start thinking about how they will impact their business.
According to Deloitte “Overall, just over 20 percent of manufacturers rated
themselves as ‘highly prepared’ to address the emerging business models the
fourth industrial revolution brings. The coming year is one that is expected to
separate the digital leaders from the followers, and it could leave some
companies dangerously behind.”
Forbes predicts that in
2020 spending on IoT technologies, solutions, and apps will reach 267 billion
USD, with much of this boom in spending coming from the manufacturing
industry—as manufacturers continue to digitally transform and connect their
business processes. Expect everything from shop floors to supply chains to become
more connected, making manufacturers more efficient and productive.
technology will be an important factor in determining which manufacturers stay
strong and competitive, and which lag behind in the new world of Industry 4.0.
Use Your ERP System to Harness Big Data
Learning how to collect, but also transfer,
store, and analyze data is one of the biggest things that manufacturers can do
to embrace Industry 4.0.
Data is one of the key drivers behind industry
4.0, and manufacturers need to learn how to harness the data that they already
have coming into their shops to both become more efficient now—and to set them
up to deal with future trends and technologies.
If a manufacturer is using an ERP to manage
their manufacturing shop, they already have access to a large amount of
real-time data. But, unfortunately, when it comes to analytics, many plants
still rely on manual processes and Excel spreadsheets to determine asset
availability, draft maintenance schedules, or make critical decisions.
However, using the full capacity of an
integrated ERP solution will connect a shop and give manufacturers better
control over their data—and the important business processes and decisions that
rely on it—making shops run smoother and more efficiently.
Without an integrated ERP system,
manufacturers need to comb through numerous spreadsheets and systems to pull
out relevant data, and then analyze the data to create meaningful reports and
actionable items. Not only is this time consuming, but it also leaves a lot of
data out of play, meaning manufacturers aren’t getting the full picture—or
But an ERP makes it simple, as it can sift through data for manufacturers, and create customized reports to better understand operations and processes—and help manufacturers make better business decisions. Data can show where there are gaps or inefficiencies in production lines, and help improve manufacturing processes to increase cost-effectiveness.
Using the business intelligence features of an
ERP to their full extent will help manufacturers become even more efficient,
lean, and productive organizations—as well as will also help them to continue
their digital transformation, and be prepared to adopt and embrace other
digital technologies like automation and IIoT.
Using business intelligence to improve
operations has a major impact on a business’s bottom line. According to the
Aberdeen Group ERP software that provides accurate, real-time information about
daily operations help companies reduce operational costs by 23% and
administration costs by 22%.
Many manufacturers have been sitting on reams of data coming out of their machinery and systems for years but didn’t know what to do with it.
Learning how to use this data to create more
efficient—and smarter—shops is what Industry 4.0 is all about.
Greater connectivity and analytics helps
manufacturers avert quality issues, improve efficiency, and increase
throughput—all while reducing costs. Additionally, getting comfortable with
data today will help prepare manufacturers to use the connected technology that
will come with Industry 4.0.
does Cloud ERP Enable IIoT in Manufacturing
IIoT is all about connectivity, just like
cloud ERP solutions.
Cloud ERPs give manufacturers more flexibility and connectivity to collaborate, manage operations, monitor production—and take advantage of new technologies like IIoT. At the end of the day, technology is about enabling manufacturers to become more efficient and more productive, to better serve their customers. That’s our goal and only goal.