We were at the Advanced Manufacturing Expo (AME) show last week. The show was bigger than last year and on both days we saw lots of manufacturers, mostly from Michigan. We saw robots and lots of automation. I saw a distinct trend in data collection. Manufacturers both want and need to know what’s going on currently in production and data is the way to get it.

We research, provide and train mid-market manufacturers on Industry 4.0 solutions designed, built, and priced to meet their needs so our message was around the tools you need to get that data. At the show, people wanted to know what made a solution fit the Industry 4.0 category and how we provide that at a price point that’s both attractive and attainable for the mid-market. We’ll break that down here today as I feel that’s a question a lot of manufacturers struggle with.

 

what is industry 4.0?

It’s been in the news since 2011. Some people lean into SCADA. Others will cite automation or artificial intelligence (AI). Industry 4.0 has become a buzzword for all things needed by people in the manufacturing sector. But beware of the catchall phrase and the shiny consultants that ring it.

Industry 4.0 has been labeled the 4th Industrial Revolution following on the heels of the first which moved production from hand to machine, the second with the wide-spread expanse of railroad and telegraph networks as well as electricity, and the third with its introduction of large-scale computers. The time between these eras spans more than 250 years.

People seem to agree that machines and computers cannot replace humans but are very helpful for both repetitive tasks and those tasks that require highly complicated calculations quickly and accurately. So machine automation in the Industry 4.0 sense is about helping humans do the repetitive and complex work that is most vulnerable, perhaps, to error.

 

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what is industry 4.0 for the Middle Market?

Automation Magazine wrote an article in 2018 that is still quite prescient today. In it, they cite the 6 stages of Industry 4.0:

  • Computerization – software and computers deployed for different tasks, not connected.
  • Connectivity – connection of different business applications for specific workflows/needs.
  • Visibility – they call this the Digital Shadow and cite how difficult it is to establish one as there’s usually no one single source of truth in data. They specifically cite the difficulty of capturing data in production and the limited number of people that have access to what you collect.
  • Transparency – this is getting to the root cause of issues, seeing trends, and analyzing data.
  • Predictive Capacity – using data to predict future results.
  • Adaptability – the delegation of some decisions to computer systems to automatically respond to changing conditions.

This marries well with what we see and do every day. Not every manufacturer comes to us with computerization complete for their shop but every one of them sees and reports the issues with data collection and distribution. We boil down Industry 4.0 for the mid-market to just 2 items: data capture (real-time, accurate, value-based) and communication (right person, right time).

If you had the ability to answer your questions with data, where would you be? Questions like:

  • Where is that order?
  • Will I ship on time?
  • Did I make money on that order?
  • How productive is my team?
  • Am I doing better or worse than last month/year?
 
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How expensive should Industry 4.0 be?

We found a group of statistics that suggest you should save an average of 3.6% of your costs with Industry 4.0, reduce your inventory by 2.6%, increase your productivity by 30% and have your costs for an Industry 4.0 project returned over 2 years.

What?

If I suggested to even one of our prospects that they could increase productivity by 30% using our tool and the costs they spent would be saved over the next 24 months, they would be running, not walking, to the nearest competitor they can find. You cannot afford for an Industry 4.0 project to extend past even a single calendar cycle.

These statistics, quite simply, must be referring to the shiny, built-just-for-you solution with drag-and-drop, simulation, custom reports, and standard workflows. It must be the long tail on the project with 2+ years of implementation time. Otherwise, how could it possibly take that long to recoup the costs?

To answer the questions more succinctly, you should not spend one penny more than you can afford on the project. Here’s how we calculate that number. For the average mid-market manufacturer with 25-30 operators and an average pay rate of $65,000, we estimate that you could afford a system for about $30,000 and get your return in the first year.

 

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Want to know more about how we calculate this? Connect with us and we’ll walk you through the transaction. If you can afford to spend 2 years paying off the projected savings for a project, more power to you. Most of the manufacturers we meet and serve don’t have that bandwidth in them. We measure ourselves in terms of whether or not we could provide the tools you need for less than the cost of a single weekly meeting with your team, whatever its length and periodicity.

As you start exploring Industry 4.0, remember the two most important things you need as a mid-market manufacturer are access to data and the ability to communicate it as broadly as you need but no further than that and as fast as you can but no faster. And, when you need help on the pacing, the cost or the tools to get you there, don’t hesitate to reach out.

As always, we’re here to move the conversation forward with you. If things we’ve said pique your interest in what’s possible for your shop, reach out and ask us the questions that you have. We’ve been doing this for more than 25 years and we’re happy to share our insight with you.
 

Anxious to get the information faster? Engage with us for a Process Gap Analysis of your shop. We’re only an email away, info@cimx.com.

Contact CIMx Software to see how a Manufacturing Execution System can improve production control for you.

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