Breaking Down Industry 4.0: Manufacturing Strategies In 2019

February 11, 2019

The last several years have brought significant changes and challenges for Canada's manufacturing sector. Many business owners are concerned about their ability to stay competitive in the face of rising costs, labour and skills shortages, and new regulations — to say nothing of uncertainties surrounding trade relations.

At a recent conference, BDO gathered professionals from the food and beverage, transportation, and general manufacturing and production sectors to discuss how Industry 4.0 and digital transformation initiatives can help them overcome key business challenges. The event highlighted several issues and strategies for mid-market manufacturers in 2019 and beyond, including these six considerations.

1. Developing an Industry 4.0 roadmap

Industry 4.0 offers the tools to solve three challenges: lack of resources, rising operational costs, and differentiating oneself from the competition. It can open the door to new revenue streams and business models that help manufacturers grow and compete.

Most manufacturers recognize the need to evolve and integrate new technologies. In fact, according to the 2018 Management Issues Survey by the Canadian Manufacturers & Exporters (CME), 53% of respondents plan to invest in advanced manufacturing technologies in the next three years. The problem is they are often unsure which investments will bring the most return.

Developing an Industry 4.0 roadmap can help your company move past this uncertainty. A strategic plan should address a specific business problem and include the current state and vision, formal benchmarks, funding initiatives, and a change management strategy.

2. Building a skilled, agile workforce

According to the CME survey, the availability of a skilled workforce is one of the biggest challenges for Canadian manufacturers. Almost 70% of respondents said they faced immediate workforce shortages, up from 40% just two years prior.

Perhaps equally important is having a workforce that is agile and open to change. Creating this type of culture can be one of the most difficult hurdles of digital transformation — even more so than implementing technology.

In addition to investing in training and skill upgrades, companies should focus on building procedures and project management strategies that help employees adapt to new ways of working.

3. Adopting IoT and A.I. technologies

Advances in the Internet of Things (IoT) and artificial intelligence (A.I.) have allowed manufacturers to realize new levels of efficiency and productivity. In just one case study, a Canadian manufacturer solved a long-standing operational problem and improved overall product quality by using an IoT hub and machine learning as part of an integrated solution.

Manufacturers have long used automation and robotics to deliver products and services. Digitally connected factories and predictive modelling techniques are just the next phase in building a competitive advantage.

4. Integrating and optimizing big data

Along with advanced technologies, manufacturers should look to optimize data to make stronger business decisions. Predictive data analytics can help drive cost savings, improve product quality, and increase customer satisfaction.

Logistical applications can include shipment tracking, predictive equipment maintenance, scheduling, and more. A comprehensive strategy can also bring new business opportunities, such as offering data as a service (DaaS) on a subscription basis.

While data optimization may seem like an overwhelming task, an experienced solutions provider can help design and implement a strategy that aligns with your company's business goals.

5. The potential of blockchain

As blockchain technology matures, many advocates believe it has the potential to increase transparency and efficiency in manufacturing. In the food and beverage sector, manufacturers and distributors have used blockchain to achieve greater visibility into product sources and points of origin, for improved shelf life optimization and waste reduction.

Blockchain does not need to be an “all or nothing” strategy. A pilot project focusing on a smaller area of the business may pave the way for wider adoption. Begin by identifying areas where efficiency is an issue, and by seeking guidance from professional consultants and legal advisors to understand the implications of using this technology.

6. Overcoming barriers to digital transformation

Connected factories and digitization are becoming more affordable and achievable for mid-market manufacturers, but there are still obstacles on the path to digital transformation. Strategy and trust in technology are among the biggest roadblocks for many organizations.

Manufacturers can no longer follow a static five-year plan — strategic direction must be dynamic in order to keep with the pace of change. Communicate the value of new technologies and procedures and develop appropriate risk management strategies to help mitigate uncertainty.

Taking the first steps toward change

Manufacturers must take action to stay competitive. Assess your company's technological readiness to build a solid funding blueprint that leverages government incentives and programs. Develop Industry 4.0 pilot programs and make incremental moves towards a larger goal.

Most importantly, engage professionals who can help your company grow. At BDO, our manufacturing team offers integrated solutions to help mid-market manufacturing companies develop strategies that are tailored to their goals and business needs. Contact us for more information or for a complimentary whiteboarding session to help you get started:

Dan Hlavacek
GTA Manufacturing and Distribution Leader

Melissa Krakar
National Food & Beverage Leader

Marcus Sconci
National Transportation, Warehousing, and Distribution Leader

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