Article:

Setting up a pilot toward Industry 4.0

29 October 2019

Olivia Pratiwi, Senior Consultant |
Dylan Byrne , Partner, Business Services |
Suzy Munt , Associate Director, Business Services and Family Business |

For manufacturers, process improvement has for a long time been the key to success, and with the new opportunities Industry 4.0 has to offer, there are multiple, innovative ways that manufacturers can transform their processes via technology.

Significantly, when it comes to implementing technology, the intended value and outcome need to be clear and considered.

Manufacturers should be asking - what processes can be transformed by digitisation or robotics and how do we optimise their value?

However, for middle market manufacturers looking to take the next step in their uptake of both new methodologies and technologies of Industry 4.0, there are critical areas that need alignment. Once processes begin to change, other dimensions such as governance and organisational change need to be planned and monitored.

Therefore, in our experience, Industry 4.0 adoption works best by undertaking a pilot focused on ‘incrovation’ – or iterative, incremental innovation. In this article, we highlight how to approach a pilot.

The three I’s of Industry 4.0 innovation

In the context of Industry 4.0, a pilot tests new manufacturing methods, processes and systems that are enabled by implementing new technologies.

For many manufacturers at the start of their transformation journey, this may mean automating parts of the process, or bringing interconnectivity across the organisation or operation. For more mature 4.0 manufacturing businesses, it may be exploring predictive analytics or process automation. Either way, the fundamentals of a pilot are the same – they must employ the three ‘I’s’ of industry innovation: incremental, iterative and integrated, before they can be fully scaled.

We’ll look at what each of these mean.

Incremental - renovation, not reinvention.

Setting a focus

With any process improvement, there needs to be a focus. What are the issues now? Your goal should be to implement sustainable solutions – not just employ digital for digital sake.

Although focus may change over time, by directing your strategy on your biggest pain point – whether it’s profit, delivery or quality – you will be guided toward the best goals for your business and the best route towards ‘incrovation’.

Pilots typify ‘incrovation’ – they allow you to innovate in an incremental way, and in our experience, when implemented correctly have the most success for larger scale change because they are more sustainable.

The timeline for a pilot depends on the client - usually the initial change process can take three to four months and then new tools can be added in, tried and tested.

The biggest mistake manufacturers can make is to overhaul all their tech in one go – not only is it costly, it becomes an organisational nightmare, because part of mobilising tech is also about mobilising your people to understand and become engaged.

The benefits of setting up a pilot are:

  • A pilot is a good way to quickly prove outcomes, see the change in action and prove its impact on the bottom-line
  • It gets buy-in from leadership, who are critical for future success
  • It helps train people and addresses skill gaps
  • It allows you to fail-fast – fail-fast is key to innovation, allowing you to quickly try new things and adapt
  • People can see what actions are required in a digestible way and become primed for larger scale change
  • You can identify who your ‘change agents’ will be to act as champions when scaled
  • You can address any issues that may otherwise be costly if dealt with on a larger scale.

Incremental changes mean chunking it up into manageable parts and fixing what you have, while ensuring the people, process and tech all work together before you move onto the next change. A pilot should begin with mapping your processes, finding gaps and leveraging what you have to automate where you can. You can download our guide, which has a planning checklist, including key questions to answer when setting up your pilot.

Iterative – experiment, fail fast, respond, adapt.

Identify recurring problems and cure them at the source.

Enabling 4.0 is not only about tech – it’s about problem-solving and employing various methodologies that focus on the problem to work on eliminating it at the source.

For our clients, we employ various methodologies - including Six Sigma, Total Productive Management, Total Quality Management and Lean Manufacturing. What drives these methodologies is data - and these are driven by technologies.

An underlying theme of these various methodologies is to ‘fail-fast.’ While it’s a buzz word you’ve likely encountered, the key element to failing fast is iterative problem-solving.

While pilots are ideal for experimenting, it’s a common misconception that fail-fast means there’s no boundaries or control. While fail fast means its ok to fail – this is only true as long as you learn from it. The intention of failing is that you make changes according to your learnings. These learnings should be done at frequent checkpoints so you can tweak and then adapt –aiming for repeated, continuous improvement until you meet you goals.

A few other things to keep in mind are:

  • Your pilot is all about learning to be able to scale
  • Analysing your data is the key to unlocking more efficiencies, however, this is where some of the qualitative analysis of the process to understand the data is necessary. It’s important to get your data sense-checked, validated and understood - bad data can direct you to a completely wrong path
  • Respond to feedback and results regarding all aspects of your pilot
  • Arrive at the best decision based on learnings, before you move onto the next phase.

Integrated – cross-functional collaboration.

Support the organisational change.

The biggest reason for failure in technological transformation is not engaging your people – yet even more significantly in our experience this is amplified when knowledge is not transferred.

Industry 4.0 requires an integrated approach, whereby the entire organisation is aware and engaged. It’s critical to empower people - particularly in the frontline.

Manufacturers should be asking: how are we going to incentivise cross-functional collaboration? And how can we facilitate a culture of transparency and knowledge sharing?

In our experience, empowering the frontline should be the goal of technological transformation to make them more self-sufficient. This gives the supervisors and managers more time to be strategic and innovative. It also allows them to set the direction with more time to plan the next steps.

This means governance is critical. Is the management team engaged and on board? Are they aligned around an innovation-centric plan or strategy? Without the right-sized governance, depending on maturity, your pilot – and the future scale project - will not get off the ground.

Throughout the change you also need different people and levels of engagement. The management team must decide who is best to help with change to bring the project to life.

A few things to remember are:

  • Champion change from the top down – the adage ‘I pay attention to what my boss pays attention to’ is important to all organisations; and also listen to and respond to bottom-up feedback
  • Train middle managers to let go by giving them ways to monitor their staff’s progress. This could be done through dashboards, end of shift catch-ups and end-of-week reporting
  • Knowledge transfer – it’s critical to ensure there is knowledge transfer - losing knowledge is the biggest inhibitor of change and adoption
  • Be prepared to be innovative in freeing up resources to support the pilot.

Overall, a pilot needs continued support – which continues after the pilot. When it comes to scaling up your pilot, this should also be incremental and use the knowledge you gained from the original pilot.

Approaches to technological transformation toward Industry 4.0 need to be well considered and encompass a number of interdependent dimensions, which you can read more about in our Manufacturing 4.0 guide.

 Overall, people, process and technology drive Industry 4.0. Therefore, by mapping out a pilot toward Industry 4.0, you can better equip your teams for change and ensure it solves the right problems for your manufacturing business.

If you need help addressing incrovation and setting up a pilot in your business, contact our specialist advisers today.

Download BDO's Guide to Manufacturing 4.0