The Manufacturing Leadership Council’s latest survey on Manufacturing 4.0 technologies shows high expectations for a range of advanced technologies including AI and Big Data, but a fragmented approach to implementation and strategy. By Penelope Brown
From raw material to finished output to final delivery to product lifecycle, manufacturing generates more data than any other sector of the economy, far outstripping the next-closest entrants of government and banking. In 2010, manufacturing was already producing 1,812 petabytes of data every year, according to the latest data from the McKinsey Global Institute. Worldwide data output has doubled five times since then, and factory data just keeps multiplying along with it.
Transformative technologies in manufacturing are major drivers of this data revolution, either in their ability to produce even more of it, or to capture, analyze, and refine it. Manufacturers are just beginning to dip their toes into this vast data pool, but they are making strides in the world where bits and atoms come together.
Software for quality management, enterprise resource planning, and supply chain management have become commonplace for many manufacturers. Companies are fixing their gaze on artificial intelligence, 5G, augmented/virtual reality, and modeling and simulation software as the next technologies to recast their operations.
Still, that pool of data remains a murky one and the plan for deriving clear and compelling results from it is anything but settled. Technology implementation remains spotty, reactive, and often informal, and it’s often not quite clear who should be in charge. Many are having difficulty in moving away from legacy systems and in determining the ROI from large-scale technology investments.
Sentiment among manufacturers is generally that they are in the exploratory phase for advanced technologies as they determine the best areas for deployment and their ROI potential, and they believe that most of their competitors are in the same place. But, looking ahead, they see significant, even game-changing potential for many of those technologies.
These key findings and others from the Manufacturing Leadership Council’s new Transformative Technologies in Manufacturing survey offer a glimpse into what’s driving the industry’s march toward Manufacturing 4.0 – an often confusing and uneven journey, but one that manufacturers are committed to pursuing, nonetheless.
PART 1: TECHNOLOGY INVESTMENT AND PLANS
1 AI Factors Big in Future Tech Investment
Q: Please indicate your company’s investment posture for the following IT-related technologies.
2 Networks Will Grow with 5G
Q: Please indicate your company’s investment posture for the following communications and networking technologies
3 Simulation and Predictive Maintenance on the Rise
Q:Please indicate your company’s investment posture for the following production technologies.
Technology implementation remains spotty, reactive, and often informal, and it’s often not quite clear who should be in charge.
4 AI Implementation Starts at the Project Level
Q: Where does your company stand today in adopting AI in plants and factories?
5 Productivity, Process Improvements Seen as Promising for AI/ML
Q: What are the key application areas for AI and Machine Learning technologies in your plants and factories?
AI Stands for All In?
Leading the pack for exploration and the beginnings of implementation is AI and machine learning. While only 15% of survey respondents currently see it as a production game-changer, that figure jumps to 51% when asked about its impact in five years’ time (Chart 18). Those feelings toward its promise are already being reflected in its use — while 39% say they have already invested, 30% say they will begin investing in the next 12-24 months (Chart 1).
Those investments have shown up mostly in single-project implementations (Chart 4), with many others at various places in the exploration and planning stage – 20% are developing awareness, 13% are conducting research, and 16% are moving forward with defining a roadmap. While only 5% have so far implemented AI in all their factories, 28% are implementing on a single-project basis.
The most popular applications for AI and machine learning are generally around operational improvement – 73% are using them for productivity and cost reduction, 71% for process improvement, and 64% for quality improvement (Chart 5). Not far behind is preventative maintenance at 54%.
Survey respondents also see big data/advanced analytics as highly important, with 42% saying it is a “significant” technology currently and 50% saying it will be a game-changer in five years’ time (Chart 16). As factories grow increasingly connected, the Industrial IoT is seen as a game-changer by just 12% of respondents currently, but that number jumps to 43% when asked about its impact in five years.
PART 2: THE TECHNOLOGY ASSESSMENT PROCESS
6 Formal M4.0 Roadmaps and Strategies are Lacking
Q: Which statement best describes your company’s current approach to adopting a M4.0 technology roadmap or strategy?
7 Sentiment Split on M4.0 Leadership
Q: Who is responsible for devising and implementing your M4.0 technology roadmap/strategy?
8 Tech Evaluation, Adoption Stays on a Growth Curve
Q: Does your company plan to accelerate its evaluation and adoption of transformative M4.0 technologies in the next year or two?
Additive manufacturing/3D printing is seen as slightly less transformative, with 42% saying it has a significant but not game-changing impact on production currently. While 39% see it rising to exceptional status in five years, almost as many — 38% — say it will remain merely significant for their factories (Chart 15).
There was less enthusiasm among survey respondents for collaborative robots and generative design in terms of both their current and future impact, with 26% saying cobots will be a game-changer in five years (Chart 17) and 16% saying the same for generative design (Chart 19).
Help Wanted: Strategy and Leadership
Outside of considering specific technologies, it’s evident that the approach to an M4.0 transition for many is shrouded in confusion about the tactics and uncertainty about the outcome. While 28% say they have a formal M4.0 roadmap that has been adopted throughout the organization, 25% say they are taking an informal and tactical approach, and 22% say there is no formal process or strategy in place, only a reactive approach (Chart 6). Other respondents said their company has a scattered, group-level strategy that lacks cohesion and coordination (20%).
One step back from that, there is a lack of consensus in even determining who should be in charge of devising such a roadmap or strategy. Just under one-third, 31%, say it should be the manufacturing VP, followed by 30% who say it should be a cross-functional team of executives (Chart 7). Only 6%, respectively, said it should be the responsibility of the CIO/IT team or individual plant managers, and 3% said it was under the purview of a Chief Digital Officer, a role that doesn’t yet exist at most manufacturing companies.
Despite the lack of cohesive strategy or leadership, that hasn’t quelled the appetite for adopting transformative technologies, with 63% saying their company plans to accelerate its evaluation and adoption of M4.0 technologies in the next year or two (Chart 8). The most cited reasons for that acceleration include reducing costs and improving operational efficiency (89%); creating a true, sustained competitive advantage (56%); and improving visibility and responsiveness (49%, Chart 9). Those without such plans say that lack of the right skills (23%), a lack of conviction on ROI (23%), or a lack of financial wherewithal (19%) were holding them back (Chart 10).
9 Reducing Costs, Boosting Competition Motivates Tech Investment
Q: If yes, what are the most important reasons?
11 Many Feel They are Behind on Understanding New Technology
Q: Indicate the extent to which you agree with the following statement: The accelerating pace at which new technologies are emerging is causing us to fall behind in our efforts to evaluate and understand their potential.
12 Most See Themselves as Even with Competition in M4.0
Q: Where do you think your company stands in relation to its primary competitors’ adoption of transformative M4.0 technologies?
13 Legacy System Integration is the Biggest Challenge
Q: How would you assess the following challenges related to adopting and using transformative M4.0 technologies? (Low = low level of challenge; Medium = medium level of challenge; High = high level of challenge)
Where to Go from Here?
While some may read about all this indecision and irresolution and reach for a bottle of antacid (or something stronger), most survey respondents believe they’re all in this together. When asked where they think their company stands in relation to their competitors, 39% say they are about even, while 28% even say they are slightly ahead. A fortunate 5% say they are substantially ahead (Chart 12). On the flip side, 16% say they are slightly behind, and 4% say they are significantly behind.
As for what’s holding back movement toward an M4.0 transition, 47% said that migration from or integration with legacy systems as holding the highest level of challenge (Chart 13), followed by measuring ROI (42%) and organizational change management (39%). Planning and project management for implementation (62%), understanding and evaluating technology options (60%), and understanding organizational/management impact (52%) were all seen as medium-level challenges.
But the wave of data continues to just keep building, and most survey respondents say their companies are at a fair-to-middling state of readiness for refining and analyzing data. A majority, 55%, say their companies are moderately prepared, and 35% rank their companies as poorly prepared (Chart 20). Only 7% say their company is at a strong level of data readiness.
That middle-of-the-road status is roughly in line with what respondents say about how much their company understands the concept of using a digital thread to connect and share data, whether just within certain functions or across the enterprise. Nearly half, 44%, say the digital thread is partially understood (Chart 21), and 40% have plans to implement a digital thread, but 35% have no plans at all (Chart 22). For the ones that have deployed such data connectivity, 31% are doing it across their design, engineering, and production functions (Chart 23).
Mayhem in the making? No. Growing pains? Absolutely yes, and they are bound to be here for a while. As the dust settles from manufacturing’s first big strides into M4.0, those that persist are likely to find sure footing, just as the industry has done so many times in its past. While nobody can quite say how the industry will emerge from this sea change, there is no question that it will be an industry transformed. M
The lack of cohesive strategy or leadership hasn’t quelled the appetite for adopting transformative technologies.
PART 3: POTENTIAL BENEFITS OF TRANSFORMATIVE M4.0 TECHNOLOGIES TO PRODUCTION
14 IIoT is Growing in its Impact for IP-Enabled Factories
Q: What is your assessment of the potential of the Industrial Internet of Things (IIoT), specifically IP-enabling your plant floor equipment and products, both today and in five years’ time?
15 Most See 3D Printing as Growing in Significance
Q: What is your assessment of the potential of Additive Manufacturing/3D printing, both today and in five years’ time?
16 Half Believe Big Data Will Be a Game-Changer
Q: What is your current assessment of the potential of Big Data/advanced analytics, both today and in five years’ time?
17 Less Than Half See Cobots as Significant in the Future
Q:What is your current assessment of the potential of collaborative robots, both today and in five years’ time?
18 High Expectations Building for the Future of AI
Q: What is your current assessment of the potential of artificial intelligence and machine learning, both today and in five years’ time?
19 Only a Few See Big Potential in Generative Design
Q: What is your current assessment of the potential of Generative Design technologies, both today and in five years’ time?
20 Companies Only Moderately Prepared for Data Deluge
Q: How prepared is your company to organize, evaluate, and make decisions on the volumes of data that are or will be generated from greater connectivity of devices and equipment?
21 Most Have Good Understanding of the Digital Thread
Q: How well understood is the concept of a Digital Thread that connects and shares data across multiple functions in your organization?
22 Companies Plan to Boost their Data Sharing Capabilities
Q: Has your company implemented a digital thread approach to sharing the data generated by one or more of the M4.0 technologies you have adopted?
Survey development was led by Content Director Penelope Brown, with input from the MLC editorial team and the MLC’s Board of Governors.