US Manufacturers are Falling Behind in The Digital Revolution


In the article, US Manufacturers, Too Slow to Adopt Industry 4.0: BCG Study, the author is investigating a Boston Consulting Group Study that has shown US Manufacturers are falling behind the digital revolution and not fully experiencing the benefits of Industry 4.0.  90% of manufacturing companies survey believed that Industry 4.0 technologies, including big data analytics, can improve productivity, but manufacturers overall are only adopting the digital processes one at a time or slowly.  The entirety of Industry 4.0 needs to be implemented over time to realize the strong productivity gains, and but it appears that manufacturers lack the understanding to start proper implementation.  Without a clear goal or starting point, the technology is not being adopted nearly as quickly as it should be, and thus savings are not being experienced as they should be.

The survey conducted by BCG included 380 US-based manufacturing executives and managers, and the main results were insightful.  Overall, 53% of respondents said transition to Industry 4.0 is a priority, and interestingly, that number jumps to 80% of respondents in cost sensitive industries such as oil and gas and semiconductors.  When it comes to productivity, almost all respondents believe Industry 4.0 practices can improve productivity (89%), but few believe it can increase revenue, only 28%.  Implementation of industry 4.0 is all over the map, with cybersecurity being on the top at 65% and additive manufacturing being one of the lowest at 34%.  Finally, lack of adoption seems to be a two-fold problem.  The biggest issue to beginning implementation, per the survey, is lack of strategy.  Also, 40% of respondents said changing culture was a roadblock to implementation.

BCG appears to understand the plight of manufacturers as they have launched what is called the Innovation Center for Operations (ICO).  The ICO includes model factories in the US and Europe where BCG’s clients can observe and understand Industry 4.0 processes.  The hope is that through the ICO initiative, manufacturers will gain the necessary insights to begin the digital transformation, and understand the strategic aspects.  It seems that the only manufacturers that will don’t benefit from Industry 4.0 will be the ones that intentionally ignore it or fail to take advantage of the learning opportunities available.


Do you believe it will take new talent being hired to fully implement industry 4.0?

Do you think part of the problem with implementing industry 4.0 is not being to quantify the savings?

Do you like the idea of BCG’s ICO?

Big Data Analytics Creates a Smart Supply Chain

In the article Benefits of a Smart Supply Chain, the author introduces the concept of big data being used advantageously in a manufacturer’s supply chain.  Big data analytics is widely accepted as a superior way for manufacturers to predict demand and understand customers, but big data analytics can also be used on the warehouse floor to save money.  The smart factory concept is one in which the entire manufacturing area is connected by sensors via the IoTs.    In the supply chain, big data is allowing manufacturers to predict bottlenecks, avoid machine failure, and reduce replacement part inventory via predictive analytics.  This Industry 4.0 holds the key to manufacturers staying competitive in a global marketplace.

The concept of Industry 4.0, run by smart factories, was actually introduced in Europe as recently as a few years ago.  To stay competitive in the global marketplace, manufacturers will have to adapt at least in some way to this new Industry 4.0.  Interestingly, a recent study indicated that 92% of manufacturers in the UK do not understand Industry 4.0 processes, but 59% of manufactures recognize the impact these new processes will have on the sector.  Using the UK as a representative sample, it certainly appears that the manufacturing industry as a whole needs to technologically transform and educated itself.  Those who stay ahead of the curve will reap the benefits of more efficient, smarter processes, while those who do not risk losing money.

The specifics of Industry 4.0 includes the big data analytics to design a smart supply chain.  A smart supply chain can avoid many of the traditional supply chain problems such as supply bottlenecks and machine downtime.  Bottlenecks can be avoided due to the fact that a connected factory shares data with other parts of the supply chain so production can be eased or intensified based on data from the factor combined with data from down the supply chain.  Furthermore, a smart supply chain can use predictive analytics to shutdown equipment and processes before the fail.  In this case, there is less downtime.  The sensors on these processes can be programmed to monitor equipment and order parts prior to equipment failure so that excess replacement inventory is not need thus saving money.  With all of these advantages, the smart supply chain managers will invest in the smart supply chain to keep their manufacturing processes ahead of the curve an competitive in a global environment.

What will need to happen to educate those in power at manufacturing companies so that the transition to smart processes happens?

Will these smart processes create or destroy jobs?

Will they transformation to a smart factory decrease or reverse the decay in the manufacturing industry as a whole?




The Global Manufacturing Industry is Changing Due to Big Data

In the article Exploring the new face of manufacturing – Industry 4.0, the author explores how the manufacturing industry is quickly approaching a significant change, coined Industry 4.0.  Industry 4.0 involves big data, improved data analytics, machine-to-machine communication, advanced robotics and 3-D printing.  These changes are happening across the world from Europe to Asia, and there is no sign of letting up.  But with these changes comes a serious amount of data, 4.4 zettabytes by 2020, and the only way to analyze this vast amount of data is big data analytics through cloud computing.

This unique IT infrastructure required to keep and analyze this data have made cloud computing an invaluable tool.  Manufactures need a system that is rapidly scalable to make use of the data pouring in from various channels: sensors in their factories, inventories, raw materials and other segments along the supply chain.  Cloud computing allows manufactures to analyze real-time data to understand product status and quality thus providing a product with less defects.  Cloud computing has taken away the hassle of having to buy physical storage devices while also allowing manufacturers to use the cloud’s different availabilities, capacities, and functionalities.  The data analytics is becoming simpler and more useful quickly which is allowing manufacturers to learn more from the data then ever thought possible.

An interesting separation of cloud computing is the public and private cloud.  The public cloud allows remote manufacturing facilities to leverage modern IT and communications systems without having a large team onsite.  Public clouds also allow customers and partners along the supply chain to access information easily.  The private cloud is best for sensitive data and intellectual property.  In fact, the article speculates that hybrid clouds will emerge that allows manufacturers to have the best of both worlds.


Do you believe the cloud is secure?

Are cloud based companies doing enough to keep the cloud secure?

Will a hybrid cloud really offer enough security for sensitive information with regard to the outside world as well as employees?


7 Things to Know about the Internet of Things and Industry 4.0

The article published by Modern Machine Shop ( is about Internet of Things and the facts related to it. Internet of Things (IoT) is the intelligent connectivity of smart devices by which objects can sense one another and communicate thus changing how, where, and by whom decisions about our physical world are made. The seven points provide an introduction and background to the Industrial IoT and Industry 4.0 for metalworking companies and machine shops.

1. Key standards are creating the pathway: The ability to connect manufacturing equipment to a Web-based network and derive substantial value from these connections is more practical and compelling than ever.

2. Better, faster decisions are coming to the shop floor: When devices are connected, the data they generate can flow into software applications that create the information individuals can use to make choices that are timely and effective. Better decisions mean fewer mistakes and less waste.

3. People empowerment is essential: The individual human being will continue to play an active, engaging role in manufacturing.

4. Cybersecurity is a major issue: Cyber threats to the Industrial IoT are real, global and growing.

5. A new generation of sensors is coming:  Sensors can process or analyze this data, and they can transmit this data or make it available for collection across a network for use in a software application.

6. Machine tools will be regarded as cyber physical systems: The definition of a cyber physical system describes it as a system in which embedded computers monitor and control physical processes through a feedback loop in a networked environment.

7. Cloud computing and Big Data will play vital roles: The capacity of the cloud to store and process data is virtually unlimited and is generally more economical, flexible and secure than on-site alternatives.

Let’s simply end with a summary that includes at least three main imperatives:

Take heed. The Industrial IoT is real and taking shape here and now. It is also happening “there and then” in the sense that your global competitors are implementing it too and may be ahead with prior implementations.

Keep your eye on the prize. Better decision-making is the main benefit of creating a connected factory in which machines and people are smarter.

Start small, but plan big. Whether it is machine monitoring or cloud-based CAM programming, the initial steps have to be manageable, transparent and respectful of the individual.

How Will Industry 4.0 Affect the Supply Chain?

The article posted on MHLnews ( on 16th September 2015 talks about the effects of Industy 4.0 on the supply chain.

Industry 4.0 is essentially a blueprint for digitalizing the value chain from factory to customer. It includes technologies like the Internet of Things (IoT) and the Internet of Services, which in turn create the Smart Factory.

Simon Jacobson has outlined four key aspects of how Industry 4.0  will impact the supply chain:

  1. Smart factories – Automated and flexible manufacturing processes that are integrated with customers and business partners in support of product lifecycle changes – will impact current factory layouts.
  2. The Internet of Services – Connecting production facilities across geographies and company boundaries to create virtual production capabilities will create new business models and disrupt current supply chain designs.
  3. Advanced analytics – Capitalizing on big data and predictive analytics – to drive flexibility at the process level, not just production lines or factories – will put more pressure on organizations to use production data to its fullest.
  4. Focus on the knowledge worker – The rise of smart machines will not see the demise of the knowledge worker – rather, this increasing complexity demands supply chain professionals expand their problem solving and systems engineering skills.

He suggests that chief supply chain officers start preparing for these changes by focusing on Supplier management, Supply chain visibility, Demand planning, Supply network design, and Product innovation platforms  to get the best out of the Industry 4.0.

For more information, Read the article link provided.


Inventec to set up smart factory in Southeast Asia in 2016

An article published on August 27th, 2015 in The China Post ( describes how Inventec, a major Taiwanese supplier of the Chinese phone brand Xiaomi, is planning on building a smart manufacturing plant in Southeast Asia in 2016. The new smart facility will manufacture smart phones and PC related products. But according to Inventec Chairman Richard Lee, “We’re not going to copy our traditional labor-intensive Chinese factories.” Their plan is to utilize the “Industry 4.0” model and to use Web-based intelligent computer systems. Inventec recently signed a letter of intent with Siemens PLM Software to upgrade their current and future plants with these Web-based intelligent computer systems. To date they have purchased 300 robotic arms, but they expect to purchase another 3,000 more by June of 2016, which will cost approximately US$20 million to US$30 million. Their goal is to manufacture more efficiently by creating “a networked, flexible, and dynamically self-organizing manufacturing process for highly customizable products.” This is a great example of how Smart Manufacturing is changing the way that Chinese and Southeast Asian companies have traditionally approached manufacturing. Will it be difficult for China and Southeast Asian countries to shift from labor intensive factories to smart factories? Does smart manufacturing have a future in China and Southeast Asia? How will the work force feel about this upgraded technology? Will smart manufacturing in China and Southeast Asia have a significant impact on countries who import from them?