The business case for Industry 4.0: Enabling continuous improvement

The concept of kaizen, or continuous improvement, has long been deeply rooted in the manufacturing world. Popularized by Masaaki Imai’s 1985 book Kaizen: Japanese Spirit of Improvement, the concept originated in Toyota factories following World War II.

Kaizen remains a core principle of the Toyota Production System (TPS). 

Around the same time, Bill Smith of Motorola introduced Six Sigma methodology, which focuses on eliminating variations in the manufacturing process that can cause defects.

Today continuous improvement is a fundamental strategy of most manufacturing organizations, including SME’s. However, SME’s may face greater challenges with continuous improvement because they have fewer resources (both human and financial) for monitoring the as-is process and implementing process improvements. Industry 4.0 technologies often offer a means for overcoming those limitations and support continuous improvement in ways that indirectly translate into an improved bottom line.

Indeed, the potential for Industry 4.0 technologies to enable continuous improvement is a strong business case for investment in these technologies; they automate the collection and analysis of the data required for continuous improvement, from the individual-machine level, all the way up to the whole-factory level. This can be a significant competitive advantage, especially for SME’s that transition from collecting only limited data or collecting data manually.

Get more accurate data

Consider a ubiquitous Industry 4.0 technology: sensors. The price of sensors has plummeted in recent years and promises to fall even further as the technology evolves. Outfitting machines with sensors is a simple way to get more accurate, actionable data on overall equipment effectiveness (OEE), for instance, because the sensors can automatically collect data on machine downtime in real time and even alert mechanics and line managers when there is unscheduled downtime or a machine is operating outside its usual parameters. Contrast this approach with collecting downtime data manually, which is subject to errors and often lacks information about short-term downtime that often doesn’t even get recorded--not to mention offers no real-time availability.

Identify the root cause of problems

It’s incredibly difficult to make meaningful, sustainable improvements without understanding why you have failed to reach full potential. Quality control is an excellent example: quality problems can crop up at any point in the production process. Perhaps raw materials are substandard, or a particular machine is configured incorrectly, or products are being damaged during shipping. By pulling together data from a variety of sources (for example, production line data alongside maintenance records), it’s possible to identify the root cause of quality issues.

Decrease the time required to make improvements

One hallmark of the Industry 4.0 factory is real-time access to relevant data and analytics. These might be available via a tablet at an individual worker’s station, or via mobile app for business leaders. The benefit of this access is that people always have access to the information they need to make decisions that support continuous improvement. For example, a line manager might see that throughput is below the target halfway through a shift. The manager can identify the cause and remedy it immediately so that the drop in throughput doesn’t continue to the end of the shift or into subsequent ones. Furthermore the manager can use the information to  determine whether this is a potentially ongoing problem that needs to be addressed using continuous improvement methodology.

Allow employees to refocus on value-added activities

How much time do your employees spend on figuring out what to do next? Or writing down machine readings on a clipboard? These are activities that decrease productivity--making them ideal targets for continuous improvement initiatives. It’s easy to “outsource” these activities with relatively accessible Industry 4.0 initiatives. Tablets at each worker’s station might provide manual work logging  (along with detailed training materials to help temporary workers independently answer questions), while machine data collection can be entirely automated.

Such initiatives give employees more time to produce, which translates into increased yield. Meanwhile, more sophisticated technologies allow machines to communicate independent of humans, courtesy of the Industrial Internet of Things (IIoT), allowing them to self-configure and automatically optimize, so workers can focus on other activities.

Empower the transition to a new business model

Even continuous improvement has its limits. While embracing the tenets of this methodology can result in significant increases in profitability and productivity, along with decreases in cost and waste, ultimately existing processes will hit a plateau, leading to diminishing returns. Industry 4.0 technologies can help manufacturers move beyond continuous improvement and explore new business models built on a new, predictive, data-powered environment. In this context, continuous improvement will focus not just on discrete processes, but also on creating a more flexibility on top of existing processes.

The journey toward Industry 4.0 offers many benefits for SME’s, including the potential to accelerate continuous improvement initiatives that increase efficiency and reduce costs. This is a compelling business case for the adoption of Industry 4.0 technologies.

To learn more about demonstrating the business case and ROI of Industry 4.0 initiatives, you’re invited to watch our webinar, How do I successfully pitch Industry 4.0 to my CEO?. The webinar focuses on communicating with key stakeholders and translating operational value into business value, using real-life success stories from Actyx customers.


Topics: Digitization & IIoT, Data-driven production, Industry 4.0

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