How to transform in Industry 4.0 ?
During the closing seminar of the Tech Startup Day 2016 Alexander De Croo, our current minister responsible for Belgium’s digital agenda, emphasised that we need to invest to become a forerunner in Europe once more in the fourth industrial revolution, namely industry 4.0. But what is industry 4.0? What were the previous three revolutions and what was Belgium’s role in these? How can present-day companies in Belgium best deal with this transformation?
The four industrial revolutions and Belgium
In 1720 a steam engine was used for the first time on the European continent to drive a water pump in a coal mine in the Liege region during the first industrial revolution. Then more than a century later Belgium played a vital role in the second industrial revolution where the railway from Brussels to Mechelen was the first on mainland Europe. During the third industrial revolution, in which electronics and IT were central, the Flemish government decided to invest in microelectronics and biotechnology. This resulted, among other things, in the formation of IMEC, the largest independent European research centre in the area of microelectronics. We are currently facing the fourth industrial revolution which involves further automation and where communication is central. Communication between people, the system, the machine and even with the product itself. High time then that Belgian industry takes up its role again and gets down to some serious action. The Belgian companies IMEC and iMinds, global leaders in hardware and software respectively, have decided to join forces!
Industry 4.0 and the smart factory
John Chambers at Cisco told the world “If you don’t innovate fast, disrupt your industry, disrupt yourself, you’ll be left behind”. The arrival of Ali Baba, AirBnB, Uber, etc. during the last 10 years supports this statement. Never have start-ups grown into multinationals in such a short space of time. Because everything and everyone is connected to the internet, companies are able to use digital channels to reach their clients extremely quickly and efficiently. The customer is more and more central as via the internet he can access all the information he wants and in this way make much more critical decisions. The expansion of digital community platforms makes certain steps in the value chain redundant so that whole industries are turned upside down. Instead of the ‘Internet of Things’ we talk about the ‘Internet of Everything’ where companies and customers increasingly find themselves in a cyber-physical world.
This trend is also continuing in the production environment, with the smart factory. A good example of this is Local Motors, a start-up that produces electric cars. Using 3D printers and advanced robots in an automated production environment, they print the parts of an electric car and assemble it in less than 8 hours! The various steps of the production processes are increasingly transformed digitally as is the case at Local Motors. Machines are automated as far as possible and have the necessary processing power to take decisions themselves. Because of this decentralisation of processing and decision-making power, the connectivity between the machines is extremely important as machines can communicate with one another to take optimum decisions. Every step and movement is also measured digitally and stored centrally in data centres and cloud structures; complex big data analyses can then be used to create detailed insights into the production process and to optimise performance.
The digital fairy tale
The above explanation is only a very short description of what the fourth industrial revolution could mean. Investment in industry 4.0 could bring production back to Europe and in this way result in strong economic growth. In most cases it is still not clear which concrete steps a company must take to be part of this digital fairy tale. The decision makers in companies are bombarded with container concepts as important investment terms – concepts such as ‘Big Data’, ‘Internet of Things’, ‘Digital Transformation’, ‘Deep learning algorithms’, etc. What these mean or could mean for their company in concrete terms generally remains a mystery. However, to identify the common thread throughout this digital fairy tale, at Möbius we have developed an approach that relates industry 4.0 to a company in concrete terms.
Industry 4.0: the approach
The approach consists of five steps and creates a framework to translate technologies and trends into concrete applications for a company in a given sector.
The first step is the explore phase, where we start with a bottom-up approach by following the digital trends. A good understanding is required of what is present on the market and what is coming in the next few years. Every technology and trend must be made concrete in business concepts: What are the opportunities? What are the costs? What are the possible risks? On the other hand the explore phase also involves approaching the business side in a top-down way. It is important to understand what the company’s strategy and objectives are, what the customer wants and what is happening in the sector.
In the ideate phase together with all the relevant stakeholders (customers, partners, employees, etc.) we take a look at what can be digitized. The process, the product, the customer experience or perhaps even the strategy itself? How can industry 4.0 be used to support strategy and objectives? There are a huge number of different options so it is important to approach this phase in a structured way.
During the architect phase the emphasis is on selecting a company-specific focus. Game-changing innovation is identified, keeping corporate strategy in mind and based on knowledge of the various technologies and trends.
The fourth phase is the assist phase and includes the execution and supervision of the focus selected. The right partner is needed here who can help implement the required technology. This can range from the right project leaders and change managers, to start-ups, large technology companies, etc.
Assure is the focus in phase five. This transformation is not a one-off implementation, but also requires the right cultural change where innovation and change are central. For this reason it is recommended that the persons impacted should be involved as much as possible in the transformation process as they will ultimately be the ones who have to maintain the transformation.
The digital clock is running! Don’t miss the start!