How leading manufacturers are automating for success
Digitization is transforming the manufacturing landscape, as Industry 4.0 and automation enable companies to modernize and improve safety, productivity and profitability. The Fourth Industrial Revolution, also known as Industry 4.0 or Industrie 4.0, is reshaping the way manufacturers operate in the digital age.
But danger lurks beneath the surface of these technologies.
Implemented correctly, Industry 4.0 and automation allow rapid responses to customer demand and coordinate production throughout the supply chain. Yet poorly implemented automation simply makes bad processes go faster — amplifying existing mistakes and destroying customer value.
Three steps to enhance automation in manufacturing
The Wipfli resilient manufacturers study — which surveyed 194 U.S. manufacturers on their abilities to manage challenging business conditions — identified three keys to successful automation and Industry 4.0 transformation:
1. Develop and deploy an automation strategy with defined goals
Leading manufacturers don’t wait for breakdowns to plan for new automation.
Some 36% of manufacturers have developed and deployed dedicated automation strategies and goals aligned with other company strategies. Yet 39% don’t have dedicated strategies for automation, instead addressing it via other strategies. And a quarter of manufacturers have no automation strategies.
A third of executives describe their companies as automation leaders; in this group, 44% have dedicated automation strategies versus just 32% of other manufacturers. How are they finding success? They’re turning automation ideas into action by establishing an Industry 4.0 strategy, training an internal champion and involving employees in equipment transformations.
2. Establish a capable network infrastructure
Automation is a two-way conversation: managers and employees remotely instructing machines, which respond with information for real-time decision-making. These communications require updated network infrastructures — yet many manufacturers don’t have them:
- Machine to machine: 66% of manufacturers require upgrades or a network overhaul.
- Machines to enterprise: 68% require upgrades or a network overhaul.
- Machines to suppliers: 72% require upgrades or a network overhaul.
- Machines to customers: 67% require upgrades or a network overhaul.
Automation leaders are far more likely to have capable network infrastructures, as are those with dedicated automation strategies. For example, 52% of manufacturers with strategies have networks capable of machine-to-machine communication vs. just 25% of other manufacturers.
3. Invest in automation
Automation sometimes requires a significant investment, but the returns can be impressive. For example, The MPI Group’s 2021 Industry 4.0 Study found that 63% of manufacturers believe the application of Industry 4.0 technologies to plants, processes and supply chains increased profitability by more than 5% in the past year.
Spending on capital equipment varies widely:
- 35% of manufacturers spent more than 10% of sales on capital equipment in the past year
- 40% spent 6-10%
- 25% spent 5% or less
Almost half of manufacturers with dedicated automation strategies spent more than 10% on capital equipment vs. just 28% of other manufacturers. These long-range plans help leaders align budgets with plans and adapt to changing conditions in the automation industry.
Where should you automate first?
The Wipfli research report provides guidance into how manufacturers are using automation and implementing Industry 4.0 manufacturing practices.
Most manufacturers report “extensive” or “moderate” application of automation and Industry 4.0 technologies. Activities most likely to see “extensive” or “moderate” application were:
- Production scheduling/planning (80%)
- Safety management (77%)
- Production workflow (75%)
- Quality control (75%)
- Inventory tracking and management (74%)
- Performance management (73%)
- Transportation/logistics (73%)
- Assembly (72%)
The top technologies that support manufacturers’ applications of automation and Industry 4.0 are:
- Artificial intelligence (52%)
- Big data/business analytics (48%)
- Cloud computing (48%)
- Mobile devices (40%)
- Augmented, mixed or virtual reality (38%)
- Internet of Things platform (37%)
- Advanced human-machine interfaces (34%)
What activities could your company automate with new technologies like robotics, machine learning, or additive manufacturing?
Wipfli develops and executes automation strategies
At Wipfli, our manufacturing specialists understand the factors involved with automation — and have a full suite of capabilities to help you assess, understand and prioritize digital opportunities. We can help your company become an automation leader and guide you through your Industry 4.0 transformation.
Explore our resilient manufacturers study to discover how manufacturing leaders manage innovation, growth, automation and resilience. The study reports on a range of trends and concerns — from how long it takes manufacturers to get new products and services to customers, to annual turnover rates for managers and frontline employees, to the number of data breaches manufacturers experience each year. Download your copy today to learn about smart manufacturing and industrial automation 4.0.
As the Fourth Industrial Revolution continues to reshape the manufacturing landscape, it’s crucial for companies to embrace digital transformation, leverage advanced technologies like AI and IoT, and focus on workforce upskilling. By implementing smart factories, using digital twins and optimizing supply chains, manufacturers can stay competitive in the age of Industry 4.0. Remember, the key to success lies in developing a comprehensive Industry 4.0 strategy that addresses both technological advancements and the human aspect of this industrial evolution.
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