The manufacturing sector is currently saturated with the rouse associated with Industry 4.0 (aka the Internet of Things). That’s no surprise given the fact that it’s evident that the connection of systems and utilization of the related data can bring added value to modern manufacturing processes and supply chains. Boston Consulting Group expects that until 2020, digitalization of manufacturing processes, connection of supply chains and new business models will bring $ 1.3 trillion dollars to the global economy.

Enterprises who carry out their investments correctly and use the extended options of their industry assets’ digitalization will benefit from a better overview of their operations, heightened acumen at lower costs and the potential to react to various customer requests in a way that would revolutionize the business models of today. Therefore, it’s no wonder that digitalization of strategies is one of the main topics of discussion.

The potential of this far-reaching concept defined as Industry 4.0 is unlimited. Smart factories with autonomous cyberphysical systems and additional production, will recognize individual products in the course of their execution which enables mass customization and the ability to regularly inform customers about shipping times. Intelligent systems for error identification, augmented operators management and predictive management will decrease the rate of quality defects occurrence and at the same time, increase the supply response rate.

Industry 4.0 and Where to Start

To know where to start is a challenge for many enterprises. There’s a lot of available digital technologies and even more suppliers of technologies who are the reflection of “digital leap of faith”, because within Industry 4.0, they carry out significant investments based on promising that the value of the business will materialize in time. The understanding of what investments should be carried out within their limited resources, in what order it would be best to perform these investments and what realistic outcomes might be expected is a confusing challenge for many enterprises.

It’s clear that not doing anything and waiting for others to make the first step is not an option, if we take the intensity of competitive risks into consideration. Across many fields, it’s possible to observe companies utilizing digital technologies for creating innovative, customizable products whose delivery, price and quality can easily be compared to competitors. They do it through deploying new enterprise and operation models, changing the rules of the market in order to push their competitors aside.

As an example, take a look at the company NVidia that is very famous for top-notch gaming and graphic technologies. Several years ago, it took a grip in automotive industry with mediation of multimedia interfaces and continued successfully until it became a crucial software platform for autonomous vehicles support. The company Under Armour had a similar success – it entered the market with sportswear, enriched it with its innovative functional underwear and then expanded to the field of products for performance measurement, fitness scales and health monitoring devices. In both companies, there was a great disruption across manufacturing buildings and supply gains.

Dynamic Simulation in Industry 4.0

For decades, leading companies of automotive and manufacturing industry have been deploying models of predictive simulation in order to get answers for questions related to serious process changes and investments to new technologies. Unlike many other predictive analytical technologies, predictive simulation has been used by these companies at a large scale for several years and for many of them, it has become a key helper when deciding about capital expenditure. Less structured companies avoid this kind of technologies and rely on experience and intuition; however the time for intuitive management is running out as the operations are more and more complex, interconnected and agile.

Implementation of Industry 4.0 naturally generates opportunities, risks and business issues similar to those that came up when implementing new technologies in the past. Therefore, it’s calming to know that there is a verified technology software capable of providing a highly visual predictive model of your business and estimating the impact of various implementation variants. By capturing the business logic, rules, assets and processes within the digital model, enterprises get access to a visually rich, as well as statistically accurate, method for testing the investment options and future changes within their organization.

These models are able to simplify the complex scenarios of operations. They provide data about future states which is ideal for securing clearer decision-making abilities, better and more comprehensive materials for justification of the necessary costs and management of all risks related to the change. For these reasons, predictive simulation represents an ideal starting point when thinking about investments to digital transformations using the technologies of Industry 4.0.

For many, the added value of a predictive-simulation model is its ability to help you understand the complex dynamics of the current state the business before it undergoes complete digitalization. Capturing processes and data in the visual dynamic model secures mutual functional engagement needed for creating effective strategic alternative investment opportunities. With ongoing investments to new technologies of Industry 4.0, it will be possible to process data which propels these models through operative data sources – , – for example those who come from modern devices and data from sensors for real time scanning. With the growing level of digitalization, it will be possible to base the model on more exact and timely data flows which will therefore secure more accurate predictions based on business plans and the illustration of current operations’ and schedules’ “digital twin”.

Predictive digital twin is able to show you the current business state with various tools, providing the management with a unique perspective beyond traditional reports. Among its functions, there is 3D visualization, augmented and virtual reality and key performance indicators enabling drilling into deep business data and detailed examination of individual points.

These indicators are able to use predictive data for alerting users about when and where might be potential trouble. When using the right 4.0 technologies, they are even able to provide means necessary to remedy actions. For future operational managers, this form of indicators will become a digital control panel or “a cockpit of predictive management”.

Hayward Tyler, a leading designer and manufacturer of pumps and motors, uses this technology for creating a digital twin of their manufacturing building. This reputable approach demonstrated how the factory will work before the construction and evaluated the development of a new transportation means designed in the way to increase the volume of transportation in the entire object. The technology of predictive simulation is currently developing, so that it would improve the ability of production planning. Customers can then be informed about when to expect the delivery of their orders.

Evolution Versus Revolution

The term Industry 4.0 is derived from the common opinion that digital change, which propels industrial systems, processes and products, heralds the fourth industrial revolution. A lot of existing companies face the question of how to balance their ambitions in order to utilize smart production technologies and come with new, competitive models.

A lot of people will feel that gradual digitalization of their business is the only viable path onwards and definitely the one that is the most convenient without extensive investments. In this case, the people who build businesses should rather start using smart digital technologies that identify current risks and opportunities related to customer experience, operating performance, products quality and price, instead of investing with the hope that they’ll encounter an opportunity which could mean an added value for the given company. It’s likely that this traditional approach is a way that a lot of companies will take in the short-term, while closely observing the strategies of competitors. Every step on this evolutionary path will be thought ou, in order to make sure that the individual action will be correctly planned and bring results that will become a motivation for building up a digitally intelligent business.

No matter the path you choose, innovation brings change and change brings risks. Smart manufacturing companies will find comfort in the thought that there are predictive technologies available which bring the much needed certainty when it comes to securing the way of their business towards Industry 4.0.