June 2, 2022 True Industry 4.0 Transformation Goes Beyond Tech

Leaders from ServiceNow and Zira explore the keys to unleashing Industry 4.0 innovation: process and people.

By Charles Araujo

Industry 4.0 was supposed to be a revolution.

It has certainly delivered on its promise to a degree with manufacturers and distributors capturing data, leveraging analytics, and implementing automation.

But a revolution?

While deploying technology in these ways is essential and foundational, industry leaders are learning that they must couple that tech-centric innovation with equal amounts of innovation in how they integrate their operational technology (OT) into the end-to-end business processes of the organization, and how they deliver the right information to the right people at the right time to enable the right decisions.

Process is the Key to Realizing Transformational Value from Industry 4.0

At a business level, there has always been a close coupling of factory or warehouse operations and both the front and back offices.

But the integration of OT and the information technologies (IT) that run them has always been challenging. So, most organizations have focused on easy wins and left the more complex integrations — and, therefore, big transformational opportunities — for another day.

The problem is that this approach has often created the illusion of transformation. “Massive amounts of data in today’s modern manufacturing facility flow fast, and through a dashboard can look like a single cohesive unit,” says Elhay Farkash, CEO of Zira. “You know this isn’t the case…Data from sensors needs to be moved to a different system to be analyzed, with results usually requiring a manual review before they are fed back into a different system.”

To fully realize its promise, the Industry 4.0 movement must not only achieve true integration on the floor, but must also break free of it to seamlessly integrate with end-to-end business processes.

“The most visionary supply chain and manufacturing leaders are realizing that Industry 4.0 and Smart Manufacturing technologies…are a secret weapon they can use to drive cultural change,” explains Anna-Katrina Shedletsky, writing in Forbes. “These leaders are breaking the mold, empowering their employees, and driving results that are saving their companies tens of millions of dollars or more each year.”

But the opposite is also true. When organizations fail to connect their Industry 4.0 efforts with their end-to-end business processes, it is those disconnects that are often the root cause of issues that lead to a failed customer experience and margin loss.

People at the Center of Your Industry 4.0 Success

But making Industry 4.0 initiatives an integrated part of your end-to-end business processes is still not enough to fully realize its promise. To do that, industry leaders need to address the element almost entirely left out of Industry 4.0 conversations: people.

“People make up what I call ‘The Last Mile’ of the industry 4.0 journey,” said Allen Hackman, Head of Manufacturing Industry at ServiceNow. “After all the technology is up and running, if you do not have people taking action on the insights and prescriptive actions generated from IIoT, the value of all your upstream investments are significantly reduced.”

But it’s not just the skill-shift that’s at play. As Industry 4.0 initiatives change the nature of work on the factory or warehouse floor, there’s also the issue of institutional knowledge.

“Without the skilled labor capacity, manufacturers cannot execute ‘the last mile’,” continued Hackman. “The challenge and the opportunity is to arm factory workers of the future with the resources, training and technology needed to be more productive, ramp up more quickly and have access to knowledge stored digitally.”

As organizations attempt to improve end-to-end optimization and extend their workforce, capturing this information is essential — especially as they extend their use of data, analytics, and automation deeper into their process execution.

Evolving Your Industry 4.0 Strategy

The implications of these trends are clear. You need to move beyond an exclusive technology-driven focus and embrace the critical role that end-to-end process integration and people play in realizing Industry 4.0’s full promise.

“While much of the conversation around Industry 4.0 has been focused on the technology, not nearly enough has been focused on the human factors that ultimately drive its success,” said Hackman. “Doing so is what will drive productivity, efficiency, and agility.”

The ultimate promise of Industry 4.0 has never been about just data or automation. It’s always been about the transformative possibility of using technology to reimagine how organizations produce and deliver goods. That reimagining, however, will never be complete unless industry leaders look at it holistically, giving equal standing to the processes and people that act upon the technology they are implementing.

Charles Araujo is a technology analyst and internationally recognized authority on the Digital Enterprise and Leadership in the Digital Era who advises technology companies and enterprise leaders on how to navigate the transition from the Industrial Age to the Digital Era. Having spent over thirty years in the technology industry, he has been researching Digital Transformation since long before it became the uber-buzzword of today, and is now focused on helping Digital Era Leaders prepare themselves and their organizations as the macro trends of the primacy of the customer and the primacy of the algorithm collide, ushering us into what he calls The New Human Age.

Copyright © Intellyx LLC. ServiceNow is an Intellyx client. None of the other companies mentioned in this article are Intellyx clients. Intellyx retains full editorial control over the content of this paper.

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