How can Industry 4.0 benefit my business?
Read time: 4 minutes
If you’re like many Canadian manufacturers, you may be wary of the cost and complexity of introducing Industry 4.0 technologies into your business.
But a recent BDC study suggests its adoption comes with a long list of benefits—among them dramatic increases in productivity, revenue growth, product quality and customer satisfaction.
Often referred to as the Fourth Industrial Revolution, Industry 4.0 uses digital technologies to make manufacturing more agile, flexible and responsive to customers. Using the Internet, wireless sensors, software and other advanced technologies, businesses are now able to create “smart factories” that track production in real time.
The overall benefit of Industry 4.0 is that you’re getting the information you need to make the right decisions for your business. It can help boost your productivity, predict your cash flow, tell you when you’ll need inventory, and even where to send your next marketing email.
The BDC survey of close to 1,000 entrepreneurs found that 60% of adopters say digital technologies helped boost their productivity.
The main driver of productivity growth in a smart factory is the capacity to predict and prevent downtime, and to optimize equipment effectiveness and maintenance.
Digital technologies can also help employees become more efficient. The sensors are telling you how many items you have produced, how many of those items are defective and how much time it’s taken to produce them. Based on that, you can be very specific about who needs training and what they need training on.
Lower operating costs
BDC’s survey found that 50% of digital technology adopters say it helped them reduce operating costs.
The study reported that savings may come from the following processes:
- Real-time production monitoring and quality control to reduce waste and rework
- Predictive maintenance to prevent costly repairs and unplanned downtime
- Higher automation to save labour costs and improve throughput
- The use of 3-D printers to achieve faster prototyping, reducing the cost of engineering and accelerating time to market
Improve product quality
Better product quality is another benefit of digital technologies. In BDC’s survey, 42% of adopters reported improved overall quality.
For instance, real-time quality control can allow you to get data points at every point of your production. This will help you check how changing conditions affect the quality of your products. For example, how changing heat levels affect quality or how different employees influence production. Over time, this information can help you to reduce or even eliminate, customer returns that occur when products do not meet specifications.
Become more innovative
13% of Industry 4.0 adopters said the new technology has given them a greater capacity to innovate.
While this is a low score, greater innovation can often unlock the most value for your business. New business models made possible by smart products and new advanced technologies, such as 3-D printing, are only beginning to emerge. They promise to spark innovation on a monumental scale over the next five to 10 years.
Gain a competitive advantage
Digital technologies can provide an advantage in competitive markets, with a significant effect on growth. Indeed, digital adopters in BDC’s survey were almost twice as likely as non-adopters to predict annual revenue growth of 10% or more over the next three years.
For example, a food processor that has opened up its systems to a multinational retailer is able to order via a secure online platform and choose from which warehouse it wants to purchase the product. The logistics department then ships the product and invoices the client. The entire process is automated, which reduces the business process workload, improves fulfillment time and boosts customer satisfaction.
By providing better services using technology, businesses are more competitive in the market.”
Transform your business
Integrating digital technology into your business can take time and effort, but the payoffs can be very interesting for businesses that use the data to make strategic decisions.
Entrepreneurs are often overwhelmed by the amount of data at first and don’t know where to start.
Business owners can start by defining what data they need to capture and at which frequency it needs to be reviewed.
Information by itself is useless, but if you’re able to analyze it properly then you’re able to use it to make the right decision.
If you don’t have that information, you are making decisions based on your gut feeling, and that’s not always optimal.
To learn more about Industry 4.0, download your free copy of BDC’s report Industry 4.0: The New Industrial Revolution.