Industry 4.0 and the Small Manufacturer

"That all sounds great, but we are too small. I cannot afford any of that technology!" - Small manufacturer owner.  

This quote came from the owner of a small manufacturing business that I have known for years. We were casually discussing business and I was explaining to him Industry 4.0 and the Digital Transformation. As our conversation continued, his three major pain points came up - labor shortage, downtime and quality control - all three of which are interrelated. He struggles to find qualified labor that actually shows up, which leads to downtime and quality issues in a very low margin manufacturing process. His focus was getting though the next day, not how his company will compete for both labor resources and orders down the road.  

His scenario is not all that different than so many small manufacturers out there. Ownership, management and decision makers are so concerned with the day-to-day operations that developing a strategic roadmap seems so overwhelming and is not a high priority. Unfortunately, while you ignore it, your competition is making the investment in the digital transformation to become less reliant on labor, more efficient in their manufacturing process and more flexible to adjust to market changes.  

The owner agrees that in principle utilizing A.I. to predict failures, faults, and reducing his reliance on labor would phenomenal. But, he does not have the funds to make such significant capital investments. However, he became very interested in making small, progressive strives towards that long term goal through small investments with six to twelve month paybacks. For his company, three to five year returns on investments are not practical since they do not pay the bills today.  

The Digital Transformation Process Simplified

As a small manufacturer, Industry 4.0 and the digital transformation may be overwhelming and may be perceived as a major capital investment and it can be, especially without any long term strategy on where to take it. Investing in technology just to be on the cutting edge doesn't make any sense, especially when your return on the investment is questionable. 

The digital transformation journey requires proper planning, but does not have to be burdensome when broken down into a process. 

  • Identify your headaches worth solving. It may be labor, production efficiency, quality, demand planning, etc. - What keeps you up at night?
  • Assess your current digital infrastructure - control systems, network infrastructure, sensors, cyber security, internet connectivity to the plant floor, data currently being collected and a host of other digital technologies.  
  • Define a strategy on how current digital assets address your pain points and what gaps must be filled with new digital technologies to accelerate value.
  • Create an long term strategic capital plan that helps fund the longer term large investments with the returns from the small investments made in the short term. Focus on opportunities that work in a realistic timeframe and within a realistic budget. Each implemented stage should enable the next investment.
  • Select implementation partners and vendors that delivers the digital solutions identified in the strategic capital plan.
  • Implement the digital solutions.
  • Enhance, optimize and evolve. Continue to revisit the strategic plan and make changes as needed to extract the most value from your current digital investments and future digital investments. 

Don't let Industry 4.0 and the digital transformation overwhelm you. When done strategically, digital technologies makes manufacturing smarter and your job easier, so that you and your staff may focus on greater value added tasks. As the old cliché says "It's a marathon, not a sprint." However, starting your digital transformation now will ensure that you stay ahead of your competition in the future.

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About The Author

Tim Malyszko is the founder of Intelligent Industrial Strategies. When he’s not serving his clients, he can be found on the golf course or creating a new piece of art in his woodworking shop. He calls St. Louis, Missouri home.