The world of manufacturing is currently undergoing a transformation — commonly referred to as Industry 4.0. In this transformation, the default position for many C-suite executives has been to invest in Industry 4.0 technologies, such as artificial intelligence (AI), the industrial internet of things (IIoT), 3D printing and cloud-based platforms. The expectation that spending on smart manufacturing technologies will rise by nearly $300 billion (12 per cent CAGR) by 2023 is reflective of this fact. However, the challenge for companies will be to manage the convergence of these digital systems with physical ones, and for CEOs, it is knowing where and how to invest.
FACTORIES GET SMARTER
The idea that a “smart factory” can be achieved simply through the addition of AI and other advanced tools is simplistic. Manufacturing companies are not starting at ground zero. They have spent billions over the past few decades deploying agile methodologies, enterprise resource management (ERP), and other types of IT systems to improve process flows, improve visibility, and make on-demand production feasible and profitable. However, many manufacturers have failed to fully reap the benefit of these investments, and while technology is a tempting avenue in the pursuit of the next performance breakthrough, it may not address the fundamental issues that have prevented optimisation so far.
Part of the challenge is that business and operational