Our survey findings suggest that although US manufacturers recognize the potential of Industry 4.0 to create value, they have yet to fully appreciate the scope and magnitude of the opportunity or find the path to success:
- Industry 4.0 is a priority, but not yet an imperative. Overall, 53% of respondents said that adopting Industry 4.0 is a priority. Specific industries showed even greater enthusiasm. Respondents in cost-sensitive industries—such as semiconductors, electronics, and oil and gas—are most eager to move forward: 80% said that Industry 4.0 is a priority. Even so, most respondents in the full sample do not regard Industry 4.0 as a competitive threat to their organization. This ambivalent view was highlighted when respondents were asked to rate Industry 4.0 on a scale where 0 signified “hype” and 10 signified “real.” The median response was 5, indicating general uncertainty as to whether the benefits of Industry 4.0 outweigh the challenges in capturing them.
- Value is expected to result from productivity and cost improvements, but less so from revenue growth. Among our respondents, 89% see an opportunity to use Industry 4.0 to improve manufacturing productivity. They expect to capture the greatest value from reducing manufacturing costs (47%) and improving product quality (43%) and operations agility (42%). But fewer see opportunities to generate increased revenue (28%) or develop a new revenue model (13%). (See Exhibit 1.) In our view, companies should focus on both cost and revenue improvements as potential sources of value.
- Implementation is underway, but the pace is uneven across technologies. We asked respondents to rate the extent of their implementation of each technology encompassed by Industry 4.0 on a scale where 0 signified “not implemented” and 4 signified “fully implemented.” They indicated the highest levels of implementation for cybersecurity (65%), big data and analytics (54%), and cloud computing (53%). They indicated the lowest levels of implementation for additive manufacturing (34%), advanced robotics (32%), and augmented reality (28%). Although implementation of advanced robotics is off to a slow start, respondents indicated that they intend to give greater priority to this technology during the next two to three years.
- Obstacles are evident, but solutions are elusive. Respondents cited defining a strategy as the biggest challenge in initiating efforts to adopt Industry 4.0, followed closely by rethinking their organization and processes. With respect to implementing Industry 4.0 across the organization, 40% of respondents cited changing the culture as the biggest challenge. Many respondents consider finding the right talent, internally or externally, to be a constraint. Indeed, regardless of company size, respondents cited hiring talent and acquiring new capabilities as the most critical enablers for Industry 4.0 adoption. As one executive explained, “The needed capabilities don’t currently exist in our company, and we believe they’ll be hard to find.”