Transcript 0:00 [on-hold music] Do you want to know how they have successfully moved to the Industry 4.0? These manufacturers started by building digital connectivity on a broader level. 0:15 It required companies to break down internal divisions, share data with external stakeholders, and build new capabilities. 0:30 [on-hold music] Welcome to The Peggy Smedley Show, the podcasting voice of IoT and digital transformation, with your host, Peggy Smedley. 0:48 Hello, listeners, and welcome to today's edition of The Peggy Smedley Show. As always, I'm your host, Peggy Smedley. 0:54 If you joined me last week on The Peggy Smedley Show, you know I talked about our supply chains and how COVID-19 has impacted them. 1:02 Well, today I would like to continue that conversation where I left off a little bit today, and I want to look forward in what is in store for our factories of the future. 1:14 But first, let me tell you a little bit about our guests, because we have some wonderful guests. 1:19 I will be talking with Neil Meldrum, Global Business Strategy Manager for Manufacturing and Resources Group at Microsoft, and then I'm going to wrap up the show with Olof Lieberg, 5G Standardization Program Manager at the Department of Standards and Technologies at Ericsson in Sweden. 1:37 So stick around. We've got some great guests, as always. So let's get started. First, I want to start with a primer. Industry 4.0, all right, how many of you know about this? 1:48 It is the theory that automation and connectivity are creating the fourth major revolution, the business of manufacturing. That's what we're talking about. 1:59 Trends like the Internet of Things, robots, cobots on the factory floor, machine learning, AI, 5G, and all the digital twin, all of this business is spurring the next generation revolution in manufacturing. 2:15 This is all even bigger than what might be, let's say, the Industrial Revolution that took place in the late 1700s. 2:23 A study from ABI Research and Ericsson predict that Industry 4.0 solutions can generate as much as eight point five percent in operational cost savings. 2:33 So for factory or industrial sites, this can equal an operational cost savings of almost six hundred per square meter per year. So let's think about this. 2:43 Looking to the future, Market and Markets anticipates the Industry 4.0 market will reach almost a hundred and fifty-seven billion dollars by twenty twenty-four. Now, I recognize this isn't an easy feat. We all know that. 2:58 So the World Economic Forum says that more than seventy percent of all companies in the manufacturing ecosystem are falling further behind. 3:08 In fact, they use the expression, which I am not a big fan of, calling pilot purgatory. I don't know who came up with the name, but it's a horrible name. Uh, it doesn't encourage, in my opinion, teamwork at all. 3:21 I mean, and we want teams. We want to encourage the next great innovator. 3:25 So many have attempted to implement these advanced manufacturing technologies without realizing the return on investment or measurable improvements in operational key performance indicators. 3:37 So they haven't gotten far enough along to see what operational costs of savings up to that, what we just talked about, that six hundred square foot meter per year kind of discussion. 3:50 But other companies are seeing real success, and that's why I don't like that purgatory discussion. So what does the factory of the future look like? Well, let's take a look inside. 4:03 During the past several years, a group of manufacturers have had some really great strides, uh, scaling the fourth Industrial Revolution technologies in their plant. 4:14 And the World Economic Forum and McKinsey recognize these factories are part of their global lighthouse network, as they call it. 4:22 And this network and their factories are a platform to develop, replicate, scale, a- and innovations that are going forward. 4:31 Back in September, they announced the addition of ten new factories to this network, which is really great. 4:37 And even amid kind of this COVID-19 pandemic that we're all sheltering in place and can't do things, well, these manufacturers found a way to leverage the technologies to boost and improve business. 4:51 So this creates opportunities for, I would say, that cross-company learning and collaboration. So this enables us to set new benchmarks for global manufacturing, for the community to move forward. 5:06 So the goal i- here is to share, to learn from the best practices, and that's what's most important, and to help each other, other manufacturers deploy technology about sustainable solutions and transform workplaces, because we all have to learn from each other, right? 5:22 That's what we want. We got a, we got a knowledge share. 5:24 So I've spent, uh, quite a bit of time digging through these reports produced here, and I have an understanding of how these manufacturers have made the move to successful Industry 4.0, and I'm going to share their secrets to success, their secret sauces, o- on this segment with you. 5:45 And so these organizations have made four key shifts in manufacturing and the supply chain, and we always talk about the supply chain as very important. 5:54 So first, improving agility and customer success and that customer centricity across the end-to-end manufacturing and supply chain enables faster recognition of customer preferences.This enables quicker adjustments to manufacturing flows at the next generation, small scale, I think, um, modular plants to allo-allow for that higher levels of customization. 6:22 Because you know, when we think about it, today's customer, we want it faster, quicker, every size, shape, color we want. So you've got to be agile. You've got to deliver it the way the customer wants it. 6:33 So I think that's what we're talking about today. And if you're not doing it, guess what? You're behind. Your competitors are passing you up. 6:39 So I think the second one, when we talk about supply chain, we're talking about resilience, provides a competitive advantage. 6:46 But this requires connected, configurable, that N-tier supply chain ecosystem and regionalization. So for me, I view this as a complex parts of a symphony. This is the way I look at it. 7:01 I think of a sympathy- symphony in my mind with the first movement, the second movement, the third, fourth, and all of the movements usually has a structure that we can appreciate. 7:14 So if you understand a symphony, you understand first, second, third movement. That's what's in my mind, and you've got to be in sync, and you've got to be playing beautiful music to make this work. 7:24 And that's the way a manufacturing operation has to work, and if you are not and the supply chain is not doing it, then you are not meeting customer demand. 7:33 And that's where there's a delay in the supply chain, and you cannot have a delay in the supply chain, or guess what? You're not delivering your products. 7:40 You're not meeting your partners and collaborative solutions on time and on schedule. The third part of this is speed. Productivity are attained through an increased levels of automation and workforce augmentation. 7:56 Now, this needs to be coupled with upskilling and reskilling of efforts. Now, this is why this is so very important. 8:04 We talk about this a lot, that we are losing a lot of that intelligence that we have from workers who are going to retire, those baby boomers. 8:12 But you know, we always say, "Well, we can put it all in AI, and we can put it in ma-machine learning." We can, but guess what? We got to start with somewhere. 8:20 So all of those knowledge base, all of those workers who are going to retire, they get it. They understand how manufacturing works. 8:28 So we've got to upskill those folks that have been there that might be middle management, get them upskilled so they know how to do things when we are using advanced technology, because they're the folks that need to continue to work when our really top-line people retire. 8:45 Because you can still automate, but you got to understand the customer, the human side of things. Automation is great, but you still have a human side of doing business, and I think we forget that. 8:56 We're always going to need the human side of things. So don't get lost that automation's going to do everything, because sometimes I think we get lost about that. 9:03 And finally, eco-efficiency, you know, is increasingly a must-have to remain business and ensure compliance. We're getting lost ab-about, about this because we keep take, take, take. 9:15 You know, many manufacturers are using technologies to better manage, assemble, and machine maintenance and performance and quality, and I think the supply chain is so very important with this. 9:26 But tech-savvy manufacturers are leveraging analytics-driven procurement, and this is really important, and they're using platforms for end-to-end real-time supply chain visibility. 9:40 And all about this is we have to understand where everything's happening. We have to start tapping into traceability from unique digital tag-based kind of surface scanning. You know, the folks that I'm talking to get it. 9:56 They are using artificial intelligence to accelerate scaling of digital applications across sites, and it's really exciting. 10:05 This is just the beginning of what these manufacturers are doing in their factories of the future. But they also know they can't just take it. They've got to understand a circular economy. 10:17 They also understand they need to, uh, understand the full scope of everything. 10:21 And I could go on and on about how they are using thirty-D printing and simulations or the digital twin, and I love to talk about the digital twin because they can design it first, then test it in real-life scenarios of all the products in the environment. 10:38 And I could explain how they are tapping into big data for product design and testing, but you know this already. We've talked about this so many times, and there's so many options. 10:50 But I think it's very important to note here that each enterprise is different with a unique set of needs. Still, there's one overarching trend among all of them that I noticed in my research on all of this. 11:03 Do you want to know how they do it? That's the most important. Do you want to know how they have successfully moved to the Industry 4.0? These manufacturers started by building digital connectivity on a broader level. 11:20 It required companies to break down internal divisions, share data with external stakeholders, and build new capabilities, and that's really important. 11:32 We have talked about this here on the show already many times, but one of the things this requires is investing in the people and developing new ways of working and understanding the entire ecosystem. 11:48 Many of these manufacturers that have taken steps to Industry 4.0 have invested in training to reskill and upskill their workers, as we talked about. But they also understand it's all about collaboration. 12:01 They've kept people at the center of it all. They've empowered them to realize their full potential.They have a lot to give. 12:12 And on the next segment, Neil Meldrum, i- the Global Business Strategy Manager at manufa- uh, for manufacturing at Microsoft, and I are going to get into a little bit of a deeper discussion about the importance of workforce transformation. 12:26 He's really knowledgeable about that, and that's why I'm excited to talk to him in detail, so stick around for that. So here's my opinion for today. 12:34 Digitization and automation can help manufacturers improve business across the board. It can save us that six hundred dollars per square meter of operational cost per year. We can say that multiple times. 12:47 But we need to take that step forward. We need to step into the revolution that is Industry 4.0, and we need to make sure our people are at the heart of all of our efforts. 12:59 Don't get lost in just thinking about automation. Think about the people. As I always say, technology is only one part. It's all about the people, process, technology, and now we have to think about the environment. 13:10 Don't forget that. We have to think about Mother Nature. We need to be working in harmony for a successful Industry 4.0 implementation. It's encouraging to see many manufacturers are already taking that next move. 13:24 I guess my hope for all of you is to consider that you'll think about this. So here's my, my tip for today. Consider how Industry 4.0 might make a difference in your operations. 13:34 Consider how it might help your supply chain. Factories are a dynamic environment. We can harness the technology today for a more profitable tomorrow. 13:46 I think it's important to note many of the manufacturers are still at the beginning of their transformation journeys, and I wanna make sure you understand. Transformation, all of this digital transformation is a journey. 13:57 It's never an end. Because you complete technology, you move to the next technology, you complete it. You have to think about the end in mind, but you're starting again. 14:07 That's why it's transformational, but you're still always implementing. All right, well, I'm out of time. We've had a great segment. What I want you to do is tweet at me at Connect2WMag and tell me what you think. 14:18 This is The Peggy Smedley Show, the podcasting voice of IoT and digital transformation. And remember, with great technology comes great responsibility. We'll be right back after this commercial break. [upbeat music]
