In past articles we addressed the issues of what Industry 4.0 is, the benefits it will bring and the main challenges faced by companies that are evolving towards the “Smart Factory”, as they also call the companies that have been transformed during this fourth industrial revolution.
And the question frequently asked by entrepreneurs in forums, exhibitions, conferences and workshops on Industry 4.0: “I think it’s great, but where do we begin?
There are so many strategies and technologies for Industry 4.0 that can be confusing and create mistrust, that generates uncertainty and more uncertainty, which results in paralysis, stagnation and finally, a high opportunity cost.
Where do we start? what is the path to follow? Let’s call “Technological Route” the path of technological evolution towards Industry 4.0 and like any good trip made with an adventurous spirit, let’s start with the following story of an ordinary company, in a place not too far away:
Juanita is part of the administrative staff of the Energizing Drinks X company and she spends her time compiling information on material requests, purchase orders and quotations on her computer using Excel, Word and even a system that is only accessed at some stations and that is used to approve purchase orders.
It is manual, repetitive work that often relies on information that arrives on paper.
Pedro, the company’s new production manager, observes that Juanita’s office work can be done faster if a large part of the activities or tasks involved in the process are automated. So he hires a business intelligence software consultant to help him design the best way to automate the tasks, implement the software tailored to his processes so that these tasks reduce costs, improve the speed of the value chain with his suppliers, and ultimately improve customer service as well.
After implementing the automation of these processes, a lot of information starts to be generated. And the consulting firm’s software engineers also designed a “database” that stores business-relevant information such as budgets, material costs, purchase orders, inventories, etc.
All this information is generated in real time and over time begins to grow enormously to generate a large amount of data, called macro data or “big data”.
At this point, Pedro, the company manager, realizes that his company has begun to transform. For example, Juanita is now more focused on activities that are more valuable to the company as opposed to the repetitive tasks that took up so much of her time in the past. The company’s “digital transformation” has begun and is having a major impact on the company’s value chain, soon costs begin to drop and customers begin to experience better service.
However, one day in the afternoon, Pedro realizes that he is still making decisions in the same way he did before the digitalization of processes, when information was scattered and took a long time to integrate or simply did not exist. So he talks again with the consulting engineer and they agree on a plan to take advantage of such valuable information.
Although in principle it seems trivial to report all the information in the database, in reality the information has been stored in several databases, to increase the performance and robustness of the system and on the other hand the large amount of data complicates to collect the information and present it in the various reports requested by Pedro.
However, nothing is impossible for the engineers. Soon after, they present the solution and now Pedro is very happy because he has visibility of the performance of all the processes of his company in real time. By analyzing the information he soon starts to make better decisions, he has even learned a lot about the company’s operation and is now able to predict some behaviors.
Soon the company begins to gain more market share due to the great competitive advantage that has been generated during this digital transformation it has undergone within the operation.
Soon the other areas of the company start to look at what the production area is doing. So the general director of the company calls a meeting with all managers and executives, including the marketing and sales department, which is very interested in sharing information with the company’s operational area.
The idea is to reduce their inventory costs and improve production response by passing all the information on orders placed by salespeople located throughout the country directly to the production planning system.
This time the challenge for the engineers has to do with getting two completely different systems, sales and production, to communicate properly in order to achieve the goal of improving customer response and service. The challenge has been called “interoperability”.
Meanwhile, Pedro, the manager, has investigated that there are programs that analyze all the information he is constantly reviewing and also these programs have the ability to “learn”. Therefore, Pedro has thought that some of the activities he does on decision making can also be delegated to these “artificial intelligence” programs (which contain specific programs called “machine learning”).
Pedro realizes that the digital transformation that his company is undergoing is also happening with some of his suppliers, some of his competitors and also in other industries altogether. It is a technological revolution that will soon impact all areas of his life and so he thinks, “I’m going to keep innovating, I already have new ideas”.