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Consumer Goods & Chemical Manufacturers - Industry 4.0 is no longer a concept. It’s real and it’s here.

Last week I attended the fourth annual Smart Industry conference in Chicago, an event for manufacturing innovators, leaders and technology experts to discuss the new industrial revolution (Industry 4.0) and the digital transformation wave that’s happening all around us.

This event brought together manufacturing leaders to discuss in detail the digital transformation of their businesses. Key topics included:

  1. Influencing company culture
  2. Dealing with an (over) abundance of information
  3. Transforming outdated operations
  4. Addressing security concerns

The resounding message: manufacturers need to get on board with digital transformation or risk being left behind. They need a clear strategy that aligns people, processes, and technology to modernize their organizations and achieve the agility they need to stay competitive.

Not sure where to start? Enjoy our primer on Demystifying Digital Transformation and read on for a breakdown of the Smart Industry event's key themes and industry best practices.

Culture Shifts Are Foundational for Digital Transformation

According to Suzanne Burns, consultant with the Global Industrial & Digital Practice at Spencer and Stuart, “company culture eats strategy for breakfast.” In achieving digital transformation, the most complex obstacle companies face is culture.

Traditional manufacturing company culture is focused on a results-driven, process-oriented approach. And for good reason: it delivers stable and predictable outputs and economic performance.

While these cultural attributes may have worked in the past, they are often diametrically opposed to the agile, collaborative and learning-oriented attitude necessary to become a digitally-driven organization.

So how can you address cultural challenges like these? Leaders attending the conference shared the following best practices:

  • C-Suite needs to lead the way and communicate often.
  • Articulate a digital strategy that positions digital capabilities as a differentiator.
  • Restructure for speed and agility by challenging the org chart and standard processes.
  • Inject change-makers and digital influencers throughout the organization.
  • Foster a company culture that nurtures innovation: reward risk and learn from failure.
  • Accept that transformation is an ongoing process.

A “clash of generations” was also noted as contributing to culture challenges in the shift for digital transformation. In their presentation “Digital Intensity and Its Impact on Transformation” Irene Petrick and Faith Mccreary of Intel Corporation discussed the difference in mindset and approach to day to day business activities between Generation Y (Millennial) and Generation X employees. They found that digitally native Millennial employees expect transparency and are used to collaboration, while Gen X are more comfortable with traditional ways of doing things.

Using Data to Drive More Informed Decision Making

Industry 4.0 and Internet of Things (IoT) promise an abundance of information. For example, many companies are exploring machine sensors that collect real-time data from the manufacturing floor that could drive continuous process improvement. But without software to analyze this information, managers will quickly be inundated by the volume of data continuously flowing in.

In an expert panel on this topic, Mahyar Khosravi of Canvass Analytics and Hicham Wazni from Arconic suggested that companies need to empower employees to change the way they perform the work by giving them the autonomy to respond to data quickly without having to go through traditional channels of data analysis and mitigation practices. They also recommended letting manufacturing assets “take ownership” of corrective actions as appropriate, which is at the core of the smart manufacturing movement.

Stepwise Implementation for Transitioning to Connected Infrastructure

To realize the value of “smart manufacturing,” companies need new, connected machines and enabling technologies. In addition to intensive capital investment, this transition requires careful planning and sometimes a complete “re-tooling” to bring the infrastructure to a point where true Industry 4.0 benefits can be realized. Many operations rely on outdated production systems that are expensive and unrealistic to replace all at once.

Leaders at this event with experience achieving next-gen automation capabilities recommended conducting a full audit that informs a comprehensive transition strategy, followed by a stepwise implementation approach. In his presentation, “A Push Towards the Network Edge: A Stepwise Approach to Digital Transformation” Jason Anderson from Stratus Technologies suggested that “investing in virtualization emphasizing interoperability and simple edge infrastructure prioritization can be the key to a successful transformation journey.”

Turning Security from an Unmitigated Risk to a Strength

Security is often seen as an impediment to Industrial 4.0 as the IoT and overall inter-connectivity of assets. It is feared that software and other digital systems could expose manufacturers to data breaches and denial of service acts. However, cyber-security is at the heart of the digital revolution and has to be addressed in order for Industry 4.0’s potential to be realized.

Every IoT connected device has the potential to be turned into a “weaponized system” if not secure properly. So how can this be addressed? In his presentation, Howard W Penrose, President of MotorDoc LLC noted the following key practices that every organization should practice to secure its IoT systems:

  • Have a thoughtful IoT strategy with a backup plan in case of the system being compromised.
  • Know what is needed to achieve full benefits of a smart manufacturing environment - don’t add unnecessary connected devices.
  • Invest in resources to secure IoT devices, update security patches in a timely manner, etc.

In summary, there seems little doubt that the IoT revolution is already and will continue to transform manufacturing operations. Manufacturing leaders need to embrace this change, especially the cultural aspect, and ensure alignment of people, processes and technology for this new era.

Here at Veeva many of our customers in the consumer goods, chemical, and life sciences industries have turned to us to help them with their own Industry 4.0 initiatives and to create a more agile, people-centric culture. Learn more about manufacturing's digital transformation by reading this recent article or viewing our materials from the 2018 Veeva Quality Summit focused on digital transformation.

About the Author

As a Director of Strategy, Mickey Landkof is responsible for developing strategy and facilitating partnerships for Veeva's consumer goods and chemical markets.

Mickey is a known expert in the field of quality management systems with over 25 years of experience in technical and sales engineering in highly regulated industries. For the last seven years, Mickey has worked with market-leading SaaS companies focused on quality management systems, environmental health and safety, content and document management. He has experience with Fortune 500 companies as well as startups, and was a key contributor in two successful start-up acquisitions. Mickey earned a bachelor of science degree in industrial engineering from the Israel Institute of Technology and an MBA in strategic management from the University of British Columbia.