With my background in automation, engineering and energy infrastructure spanning over two decades, there is a current trend I see that having a larger impact on global manufacturing than any other advancements in the last 40 years. The industrial sector finds itself entering an exciting new phase of evolution, an evolution marked by the unlimited potential of smart manufacturing technologies enabled by IoT and supporting government and industry initiatives such as Industry 4.0.
In fact, a recent report commissioned by two of Australia’s leading Industry Growth Centres has calculated that the economic impact of Industry 4.0 will create 80,000 new jobs and more than $74 billion in economic value.
At this year’s TechEd Conference, our customers and partners had the benefit of seeing the power of Industry 4.0 in full effect. TechEd is Rockwell Automation’s annual automation conference, bringing together the top minds in the industry to demonstrate cutting-edge technology that will dramatically reshape Australia’s public, commercial and industrial sectors.
The event gave a fascinating insight into Rockwell’s view of the next decade and the role automation will play in evolving the manufacturing space. But amidst all this excitement, I couldn’t help but notice an ongoing misconception surrounding Industry 4.0 and successful business digitisation.
Despite a clear interest and even experimentation with emerging technologies like Augmented Reality (AR) diagnostics and Virtual Reality (VR) training, we’re still not seeing the level of full-scale roll outs of IoT technologies in the industrial sector that we see in other parts of the world.
A culprit for this is that the local market has a strong tendency to move towards the shiniest object, examples like AR or VR, without evaluating its necessity to the business or how to effectively implement such a technology. In many instances, solutions with clear use cases such as deploying analytics addressing predictive maintenance and asset management productivity improvement, that bring with them obvious immediate value are clear missed opportunities. They don’t have the same appeal as the cool toys like AR and VR and hence don’t get the same focus and funding
The reality is that you need to know the use case you’re trying to solve for a product deployment to be effective. Recent research from LNS Research suggested 16 per cent of global businesses have gone into deployed systems whereas a substantially higher number of business are stuck at a pilot implementation stage. This is backed up by the World Economic Forum who believe most businesses are stuck in “pilot purgatory”. The interest is there, but nobodies committing to rolling out across their business because they haven’t clearly quantified the return on investment.
As an example, If you have a workplace defined by low incident rates and a knowledgeable workforce, there’s potentially not a lot of benefit in investing in a fully equipped virtual training environment. Industry 4.0 should be dictated by need, not the number of shiny toys you own. In my experience many struggle with what the true payback is. What the return of investment is. There are so many avenues to take, business leaders can easily find themselves jumping between what’s here now and what will emerge over the next four to five years with no rhyme or reason.
It can be difficult to quantify the return on investment and get the funding required, and that’s why I think the short-term benefit is likely in proven existing use cases that can now be deployed more quickly and cost effectively with better outcomes by using newer IoT platforms and solutions. Analytics examples such as preventative maintenance and asset optimisation solutions that help remove bottlenecks in your production addressing low hanging fruit that likely doesn’t need a lot of capital investment are prime examples of easy to justify investments
This is also not to say Australia is a laggard. In many industries including food and beverage as well as mining, Australia has a strong leadership position in the adoption of emerging technologies In my experience, some of the best practices and technology adoption can be found at a local level.
The key is simply to walk and not run into the many solutions and products attached to industry 4.0. Think about what the business problem is before you rush headfirst into trying the cool new toys available. Develop the stakeholder trust and technical ecosystem with quick wins around proven use cases, do the basics well and build the business from within that.