Sprinting to Value in Industry 4.0

Sprinting to Value in Industry 4.0

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Sprinting to Value in Industry 4.0

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    Industry 4.0 in Action: The Value Is Real

    The survey findings show that many US manufacturers are moving too slowly to adopt Industry 4.0. Few companies have implemented the full suite of technologies, and some are still debating the degree of impact that these technologies could have on their businesses. But companies that take a wait-and-see approach to adoption do so at their peril. Having supported major digital transformation efforts and validated the benefits of vendors’ technologies, we can attest to the tremendous value generated by Industry 4.0. Indeed, in an era of stagnating productivity, Industry 4.0 stands out as a means of generating significant productivity gains. (Look for our forthcoming report, Productivity Now: A Call to Action for US Manufacturers.)

    Numerous examples demonstrate the wide variety of ways in which manufacturers are using Industry 4.0 to create value.

    Improving Quality. A Fortune 500 company’s assembly line produced more than 40 product variations. The complexity resulted in considerable rework and long, inconsistent production cycles. Operators’ efforts to improve quality and consistency were impeded by the need to review static, hard-to-follow printed instructions. To overcome these obstacles, the company deployed augmented reality at workstations. The technology automatically shows workers the appropriate standard operating procedures for assembling each product as it passes through the assembly line. After deploying the technology, the company improved its ability to get the product right on the first effort by more than 10 percentage points.

    Streamlining Processes. To streamline labeling and inspection processes on 10,000 SKUs across six assembly lines, an electronics manufacturer installed collaborative robots, or cobots. Some cobots were deployed for a tedious pick-and-place task, while others were fitted with vision systems on their robotic arms to inspect parts. Working alongside factory workers, the cobots doubled labeling speed from 125 parts per hour to 250, and in one work cell alone, reduced the required floor space by 200 square feet.

    Reducing Development Costs and Lead Time. A manufacturer of truck engines asked its engineering team to cut development costs and shorten the lead time for producing large engines. The team utilized a 3D printer to create a prototype for a water pump housing used to perform heat and pressure testing. The use of 3D printing reduced tooling time from 20 weeks to 2, and decreased tooling costs from $10,000 to $770.

    Accelerating Market Entry. A major industrial goods company sought to accelerate the penetration of its products in developing markets while adhering to strict quality standards. It implemented a platform for horizontal and vertical system integration, which allowed it to manage manufacturing processes, synchronize the availability of materials, and use a standard bill of materials globally. The new system enabled the company to reduce quality claims by 90% and increase production throughput by more than 25%. These improvements allowed the company to gain market share by aggressively rolling out new products.

    Creating New Services. A global tire manufacturer combined several of the technologies encompassed by Industry 4.0—the industrial internet, cloud computing, and big data and analytics—to develop an innovative service offering. The manufacturer installed wireless sensors on its tires to gather data in real time on tire pressure, temperature, speed, fuel consumption, and location. The data flows into a proprietary cloud platform for analysis. Fuel experts then interpret the information to accurately measure a tire’s performance and make recommendations to the fleet manager regarding fuel consumption. The manufacturer also uses the data to charge customers for tires on the basis of the distance travelled. This “tires by the mile” initiative is generating new revenue for the company.

    Achieving a Step Change in Efficiency. A global automotive equipment supplier faced increasing labor costs in developing countries and a scarcity of skilled labor in developed countries. With support from BCG, the company defined its digital strategy. It figured out which isolated digital initiatives were already underway and identified new initiatives to potentially pursue. The additional initiatives included using data to monitor and optimize the efficiency of production processes and to detect incidents in real time. The company then selected the top priorities for achieving its strategic vision. It conducted small programs, known as lighthouse projects, to rapidly test these initiatives and showcase the value that digital can bring. The company also defined a roadmap for deploying these initiatives at scale across the entire organization. The project achieved total cost savings of approximately 10%.