The 4th industrial revolution and software systems – ERP is doing what spreadsheets did to the black board

What is the 4th industrial revolution / industry 4.0?

Recently the manufacturing has seen a number of new buzzwords flying around; 4th industrial revolution, industry 4.0, connected factories, smart factories and the list goes on.

This transition is nothing new, the first industrial revolution brought us the steam engine, progressing to the second with the mass production assembly lines, thanks to Henry Ford. Third was thank’s to the 1970’s and the innovation of the computer, transforming the work space. Now the fourth is now approaching, ushering us into a new fully connected digital age, as a result of the leaps in computer power and efficiency. For more information on the revolutionary stages, visit the blog written by – Gordon Benzie.

4th industrial revolution
EEF UK

But what does it actually mean?

We have all felt the effects of technological advancements, both the good and the bad. It’s no secret that technology has been advancing at a tremendous rate, making it not only more powerful, intuitive and automated. But more accessible, with companies offering software solutions that are now affordable for micro sized businesses, even free!

More importantly however, there are software’s that have been created for small to medium businesses in terms of functionality, offering simplicity and usability. Offering those benefits that historically been available to the large, wealthy businesses.  Now if you can create a spreadsheet and put yourself through all the manual entry and formulation creation, you can certainly use a fully automated production control system.

Driving this revolution are three core aspects, outlined below-

  1. The Industrial Internet of Things (Internet of Things = everything embedded with sensors that collect and share data with each other).
  2. Big Data and real time data analysis
  3. Secure digital infrastructure to support and trust autonomy

 

How will it affect manufacturers?

Tremendously is the answer, I know from selling and implementing production control systems on a daily basis. Every business i work with is however at different stages of transformation, ranging from all the information being stored in the owner’s head, making it impossible for the business to function at an efficient rate, unless it’s a one man band. To having a system, however it’s not suitable, either down to lack of research or sold a lie by a ‘yes man’ sales representative.

However by far the largest portion of businesses i work with, is the spread sheet system. Granted it’s better than some scribbles on a piece of paper, however the truth is they are now obsolete and simply unnecessary especially going forward into the 4th industrial revolution. Requiring large amounts of document creation, manual entry and maintenance.

Production control systems are developed to simplify daily tasks, for example creating a quote that everyone can refer to and stored in the cloud, so it can never be lost. Manual document creation, a task of past with software’s simply dragging the information you entered at the quoting stage. Creating your schedule to get lead times, capacity planners will tell you in one click the amount of hours already scheduled, allowing you to further drill down into specific machines or even employees. The benefits go on and on… but i won’t bore you with those.

Benefits on the 4th industrial revolution

Smarter Supply Chains

With more efficient connected supply chains, businesses can interact with each other with improved efficiency.

With the capture of data, it will be far easier to see which supplier can give you the most competitive price and has delivered on the promised dates.

Smart Production

Now technology means more information, supplying increased information for shop floor availability, businesses are able to make the most of their day, increasing productivity through machine and personnel efficiency. Software’s such as nesting solutions will reduce waste, ensuring you get the most out of the resources you already have.

Smarter Products

It’s not just software solutions making advancements, so is plant machinery. With greater precision and efficiency, manufacturers will be able to make higher quality products, demand driven by customer needs, this is becoming and will soon be essential moving into the 4th industrial revolution.

Real Time Reporting

Real time reporting ties together two of the three core drivers of this industrial change, ‘the industrial internet of things’ and ‘big data’. Creating a vast number of benefits for manufacturers, real time reporting will allow businesses to monitor every step of production, enabling the ability to spot bottlenecks. But for more immediate reporting, management can see all jobs in process (WIP), displaying if jobs are going to finished on-time taking into account current production rates. Most importantly capturing costs on a real time basis, ensuring profit is made on each job.

Reports

As a result of all the data being collected, businesses will be able to get greater control and understanding of what’s happening in their factory. Monitoring work rate, efficiency, conversion rates and product demand; amongst literally thousands a reports a business can gain to increase productivity and keep pace with the industry’s technological shifts.

 

UK and industry 4.0

Britain was the flagship of the of the first industrial revolution and still remains in the top ten largest manufacturing countries. (source: EEF)

The changes that are taking place as a result of Industry 4.0 are expected to be a reality within the next decade, which does not give a whole industry a lot of time to transform its procedures. Especially considering the UK manufacturing industry is generally behind competitor countries, in regards to manufacturing efficiency and adopting technology. Displaying a window of opportunity to those more willing to change internal process to keep up with the times and embrace innovation, it does however result in many companies being left behind dragging the industry performance down.

The EEF conducted a ‘Digital Connectivity Survey’ in 2015, It displayed that only 11% of manufacturers in the UK believe the industry is ready for the changes that the 4th industrial revolution will bring. With 57% having no opinion and 33% say the industry is not ready.

My personal opinion is that the UK will make a quick and sudden change, revolutionising in a matter of years. This is because implementing technology to manage production is very dependent on the company’s decision makers, many small to medium manufacturing companies, that are the lifeblood of the industry have no interest in implementing technology. Due to the fact technological systems simply weren’t available when they learnt the trade and have no interest in changing, regardless of the benefits involved. Once these businesses are sold or handed down to the next generation, inevitably the younger more tech savvy generation will embrace the change.

Barriers

Internet Connectivity – It won’t load?!

A recent EEF report found that 50 percent of UK manufacturers did not believe that the current internet connectivity is good enough to complete a 5 year digital transformation. However 35 percent said it was good enough, which begs the question is it due to location or personal belief? In reality most softwares and systems use a very small amount of bandwidth, more likely it’s a result of lack of faith in constant 24/7 connectivity and faith in cloud applications.

Despite the country becoming more connected and the internet becoming a service everyone should have access to, 44 percent of UK manufacturers have reported cost increases. Figures released by the EEF show that 23 percent of small manufacturers are paying over £5000 per year for internet connections. Mid sized businesses reporting over 50 percent being charged over £5000 and 89 percent for large manufacturing businesses.

Like it or not manufacturing businesses are now reliant on internet connections to function on a daily basis, for example 95 percent of firms require internet for online services such as banking daily. With 53 percent using online data repositories, 55 percent for resource planning and 38 percent requiring internet to connect to plant machinery.

When it comes to internet connectivity, the UK’s core network is unfortunately copper. Although in reality this is just about sufficient to support the 4th industrial revolution, however more powerful networks are required for the ongoing development of the industry. More importantly to increase trust within the manufacturing industry regarding internet connectivity. Britain however is currently at the bottom of the league table for fibre rollout, only 2 percent of the network infrastructure is dedicated fibre to premise.

Staff Skills and Knowledge – How complicated?!

The industry change won’t just affect the management, it requires a complete shift in processes and how the employees embrace the change is crucial. Once again a common belief that digital systems require software knowledge due to their complexity. Not completely true, this may be true in regards to the large well known systems wearing the brand names such as SAP and Oracle. There are now systems that are developed for small manufacturing companies, building systems that are focused on simplicity and usability. The reality is if your employees can run a business using a variety of highly complex spreadsheets, they can run a ERP/MRP system displaying all the information in one place. In addition all software companies offer training, if this be one-on-one tuition or a library of tutorials, employees can grasp systems with the right amount of dedication.

Cost – How Much!?

It’s true, not much in life is free, not worth having anyway. Historically digital systems came with a hefty price tag, between 10k-100k. Not to mention the support and training fee’s involved going forward, but that’s the price it costs to manage a large company and in relation to income, it’s still affordable and essential. But what about the small to medium business? Recent years has shown a new emerging market of MRP/ERP style production control systems, outlined in my ‘Small ERP – The Emerging Market’ blog post. Low cost or even monthly subscriptions packages are now available to spread the cost of a system.

Time – It’s not the right time for us!

Arguably the most precious commodity to any business owner, especially in the fast paced manufacturing industry. As highlighted in our ‘Sheet Metal – Case Study’, most businesses never have the time to make a change especially a digital change over or “it’s not the right time”. You’re either busy trying the get jobs out the door or busy trying to get more work! Whilst no company can give you the time to switch to a technological system, using technology to control production will give you more time in the long run. It really is short term pain for long term gain with the 4th industrial revolution.

Program Connectivity and Integration – Why can’t i find my magic wand?

In truth there are few systems out there that are able to monitor every aspect of a manufacturing business, providing all the functions you desire. This does result in businesses having to run more than one system, for example one for production and document creation, one for accounts and another for machine efficiency and planning. This does require a certain amount of manual entry to keep all systems running insync, far less however than using completely manual methods of the past. Getting software to integrate with each other is more difficult than in sounds, that being said as time progresses will be more and more essential for system developers to consider.  The 4th industrial revolution will drive this increased integration as the demand for these system features will grow.

4th industrial revolution
EEF UK Report

ERP is doing what spreadsheets did to the black board

The 4th industrial revolution is a term creeping into a variety of literature aimed at the manufacturing industry and is inevitable, being driven by a variety of factors of which cannot be stopped. To the benefit of the manufacturing industry world wide, despite the obvious pains of change, Rome was not built in a day.

Here at Statii, having worked in the manufacturing industry for many years, we are well aware of the barriers that small to medium firms face when changing to an automated system. We also know how much love there is for the spread sheet system and how daunting it is to switch to an automated software.

That is why we have created a free-for-life beginners system called Statii Liite. Designed to demonstrate the power of a dedicated manufacturing software and how easy they are to use. Statii Liite will give manufacturers the Customer and Supplier function to keep an up-to-date CRM and an enquiry/quoting feature.

We have teamed up with Qimtek the well known manufacturing directory to spread the word and help manufacturing SME’s make the original transition into the 4th industrial revolution.

For more information regarding the free Liite system – Please Click Here

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