Industry 4.0 and strategic planning
Industry 4.0 is here. Like it or not, it’ll change manufacturing, as surely as machines and steam engines changed industry in days gone by.
This page outlines what it means for you and tells you how you can successfully transition your business.
Business strategy is your compass
A strategy creates a shared sense of your mission. It points you in the right direction, like a compass, and helps everyone in the business understand what you’re working towards. It can help you:
- prioritise, stay focused and make good decisions
- make the most of your resources
- explain your business to others
- say “no” to distractions.
A good strategy can be the difference between surviving and thriving. And the right strategy can help you transition to Industry 4.0 successfully.
Read an introduction to business strategy — business.govt.nz
What’s Industry 4.0
Industry 4.0 is the future – not a fad or a passing trend. Sometimes it’s called digital transformation or big data. But whatever you call it, Industry 4.0 is all about using data to make informed decisions.
Data can help you take your business to the next level. Having data means you can use things like:
- business intelligence – software that analyses data so you can make smart decisions
- machine learning – computer systems that learn patterns and make predictions
- artificial intelligence (AI) – computer systems that do “human” things, like identify objects and make decisions.
But how do you get that data? And how do you make sure it’s accurate? Knowing where to start – and how – can be tricky. Luckily, Callaghan Innovation, the country’s innovation agency, offers support and resources.
Get a Smart Factory Assessment: Industry 4.0 — Callaghan Innovation
Key ingredients to get ready for 4.0
Ready for Industry 4.0? Cool. But here’s a tip: steer clear of the common mistakes.
- Be realistic – don’t bite off more than you can chew.
- Focus on maximising value – don’t get sidetracked.
- Make time to transform – don’t put it off for another day.
Here’s another tip: take time to create a solid plan. You’ll need three key ingredients for that plan to succeed, according to Advanced Manufacturing Aotearoa:
- Think far ahead – prioritise long-term goals over today’s issues. This helps you focus more on innovation than taking small steps or tinkering around the edges.
- Get wins when you can – make changes that bring in cash early, so you have money you can reinvest to speed up your transition and stay on track.
- Gather what you need – get the people, tech and money you’ll need to support your transformation and keep up the momentum.
Ten steps for a strategic plan
If digital transformation sounds scary, take heart. Follow these ten steps to develop a well-structured strategic plan that gets you the best from digital technologies. A structured approach means you manage risks, make the most from your investment and succeed in the long-term.
Figuring out your strategic plan can take some time. Don’t be shy in working with a business advisor. They can help!
How business advisors can help — business.govt.nz
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1. Check if you’re digitally ready
Aim to:
Find out where your business is at with digital technology.
How to:
- Assess your readiness in technology, processes and people by using a framework like the Smart Industry Readiness Index (SIRI).
- Identify gaps in your systems, processes and skills.
- Benchmark your business against industry peers so you know how and where you stand.
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2. Define a clear vision and goals
Aim to:
Develop a vision and measurable goals for your transformation.
How to:
- Get your leadership and key stakeholders to come up with a vision of digital modernisation. What would your company be like if it had a digital makeover – if it were using technology to create, analyse and store information and improve processes?
- Identify your key business goals, like boosting productivity, reducing costs, increasing customer satisfaction or improving flexibility in manufacturing.
- Set measurable goals and clear timelines. Maybe you want to make 20% more widgets in three years or prototype a robot within two years.
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3. Form a team to champion the project
Aim to:
Gather a diverse team to drive your transformation.
How to:
- Appoint a digital modernisation leader for the project.
- Gather a team from IT, operations, production, people and culture, and finance.
- Hire consultants or technology partners to provide expertise in specific Industry 4.0 areas, if necessary, perhaps areas like AI, the Internet of Things (IoT) or automation.
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4. Assess and prioritise digital technologies
Aim to:
Figure out which Industry 4.0 technologies will make the biggest difference to your business.
How to:
- Identify the key processes and challenges in your manufacturing operations.
- Learn about different technologies, like IoT, robotics, AI, cloud computing and cyber-physical systems (systems that combine the physical and computer processes).
- Prioritise technologies to invest in, based on their potential to meet your goals. Focus on quick wins (like predictive maintenance) while planning for longer-term innovations (like virtual models).
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5. Develop a detailed implementation plan
Aim to:
Draw up a timeline, and list the actions and resources you’ll need to make your transformation dream a reality.
How to:
- Break down your plan into phases. For example, you could start by upgrading your infrastructure, then trialling new technology in a small area, and finally rolling things out fully.
- Create timelines and budgets for each phase. Assign responsibilities too.
- Set milestones and key performance indicators so you can track progress at each stage.
- Keep your plan flexible enough to adopt lessons you learn along the way.
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6. Review and upgrade Information technology (IT) infrastructure
Aim to:
Check that your IT infrastructure can support Industry 4.0 technologies.
How to:
- Take stock of your IT equipment, including hardware, software, networks and data management systems.
- Identify gaps and possible barriers. For example, do you have enough data storage and suitable real-time connectivity? What cybersecurity weaknesses might you have?
- Upgrade to protect your data. Perhaps you want to move to cloud computing. Or you may have to upgrade to IoT devices, 5G connectivity or a more robust cybersecurity framework.
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7. Train staff
Aim to:
Give your team the skills they need to thrive in the new environment.
How to:
- Work out what they need to know to use the new technologies, and identify any gaps.
- Develop training programmes as needed. Cover IoT, data analytics, AI, and automation systems.
- Use change management steps to get your team on board with the transformation.
- Create a culture of continual learning so you stay ahead of technological changes.
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8. Trial new solutions
Aim to:
Run pilot projects to test the effectiveness of Industry 4.0 solutions before your full-scale rollout.
How to:
- Trial your new solutions in a specific area, such as automating just one production line or introducing predictive maintenance on key equipment.
- Check if your new solution worked as intended, and see how you could introduce it better.
- Work out any changes you need to make, running more trials if needed, before rolling out your solution across the business.
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9. Look after your data and cybersecurity well
Aim to:
Protect your digital assets and make sure you follow the rules about data.
How to:
- Develop a comprehensive policy on data governance that spells out how you collect, store and use data.
- Introduce cybersecurity protocols to protect your business and data from threats like data breaches, hacks and ransomware.
- Regularly audit your cybersecurity and train staff to minimise risks.
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10. Monitor progress and keep improving
Aim to:
Keep an eye on your transformation and tweak what you need to align with your strategic goals.
How to:
- Set up a system to monitor KPIs, like production efficiency, downtime, energy use and cost savings.
- Review data to see if the transformation is working as intended.
- Use insights from digital tools and analytics to keep improving processes.
- Keep up with new Industry 4.0 technologies and innovations, and adjust your strategy to remain competitive.
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