Report says cost putting off investment into digital in manufacturing

A new RMIT report on Australian industry’s digital future reveals widespread hesitation to embrace game-changing technologies for fears of cost.

The Demystifying Industry 4.0: Helping SMEs lay the tracks for Australia’s digitalisation express train white paper has just been launched by RMIT University. It follows in-depth interviews with over a dozen executives from SMEs and larger companies across Australia and ongoing engagement with the local advanced manufacturing sector.

Industry 4.0 (i4.0), the fourth industrial revolution, uses technologies such as AI, big data and cloud computing to provide up-to-date information for better decision making.

No industry sector or business will escape the impact of I4.0. The disruptive changes are already happening and are escalating rapidly

RMIT University’s Dr Ben Cheng, who led the project, said fear of cost and feeling overwhelmed with the complexity of linking older and newer technologies into a single data stream was still holding many local SMEs back despite the massive potential to be realised.

“The businesses we talked to mostly assumed Industry 4.0 implementation was inherently costly and therefore only within reach of large, cashed-up corporations,” Cheng said.

“Contrary to these perceptions, transitioning to I4.0 technologies doesn’t necessarily require major investment – there are more affordable technologies, such as data analytics, that can return significant value when expertly deployed within a manufacturing enterprise,” Cheng said.

The White Paper suggests that getting started in transitioning to i4.0 technologies, even at an entry-level, can yield direct bottom-line benefits and pave the way for higher returns as a business’s level of data maturity grows.

The further along the I4.0 journey a business travels, the greater the value generated: from just seeing more data all the way to systems self-optimising.

“For low-profit margin manufacturing operations, in particular, staying agile and with or ahead of the game is crucial. The potential impacts of incrementally increasing the efficiency of mechanical and human resources, cutting costs and reducing waste cannot be understated.”

The key requisites for success in transitioning to i4.0 technology, as outlined in the white paper, were a commitment of top management, a deep understanding of one’s own business and the potential and desired level of transformation; and having a clear implementation strategy.

Start by getting your head around your data
Cheng said many companies were struggling to get their heads around what the most relevant data was and extracting value from it.

“That deep understanding of your own business includes understanding what data you currently produce, or potentially could produce,” he said.

“Before investing in I4.0 solutions, a business needs to develop a specific understanding of which data is most essential to capture, who within their organisation will use it, and how that data can be presented to these people in meaningful ways that meet their needs.

Developing an I4.0-savvy workforce is an important step in making the right decisions at this stage. The white paper outlines the value of partnering with universities to get PhD researchers working on projects, or hiring recent university graduates, as ways to tap into the next generation of digitally savvy engineers.

Cheng said taking a business towards I4.0 doesn’t have to happen overnight, that it was more of a journey.

“However, there is still a need for timely action, particularly if competitors are already gearing up and introducing I4.0 technologies,” he said.

“The I4.0 express train is leaving the platform and playing catch up if left behind could be costly. It is important to be on that train and to keep moving forward as quickly and strategically as possible.”


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