From November issue, NZ Manufacturer magazine (below)

 

Sean Doherty, Product Manager, Callaghan Innovation

The advent of Industry 4.0 has been a game-changer for the manufacturing sector and can deliver real returns for New Zealand businesses, through increased efficiency, productivity, and innovation.

However, many manufacturers remain hesitant to embrace these technologies. This reluctance often stems from persistent myths that cast doubt on the practicality and benefits of Industry 4.0.

Based on Callaghan Innovation’s experience working with New Zealand manufacturers who are on their Industry 4.0 journey, we’re keen to dispel some of these common myths and provide some evidence-based solutions to encourage Kiwi manufacturers to confidently step into the future with Industry 4.0. …

Myth 1: Industry 4.0 is only for large manufacturing operations.

The Reality: Industry 4.0 is not exclusive to large manufacturers. Small and medium-sized enterprises (SMEs) can also leverage these technologies to enhance their operations.

Indeed, as a nation of SMEs, this is where Industry 4.0 technologies arguably have the most potential to boost this country’s productivity and economic output.

Companies like Nautech Electronics, Gyro Plastics and Oasis Engineering, are all great examples of SMEs deploying Industry 4.0 technologies to good effect.

The key is to start small and scale up. For instance, SMEs can begin by implementing IoT sensors and use data analytics to optimise their existing processes. Retrofitting new hardware systems to older equipment can be a cost-effective way to integrate Industry 4.0 technologies without the need for significant upfront investment in new machinery.

Myth 2: Exorbitant costs outweigh the benefits

The Reality: While initial investments may seem daunting, the long-term benefits of Industry 4.0 technologies can lead to substantial cost savings and increased efficiency.

Several McKinsey and Company case studies show manufacturers gaining a 10-20% increase in efficiency, between 10-15% improvement in quality and cost reductions of up to 30%.

A PwC study found that companies can expect to reduce operational costs by 3.6% annually, while increasing efficiency by 4.1% annually, on average, by embracing Industry 4.0.

Myth 3: Automation will lead to massive job losses

The Reality: Automation does not necessarily equate to job elimination. Instead, it often leads to the creation of new roles and opportunities.

A classic example of this from the world of manufacturing is the introduction of the assembly line by Henry Ford in 1913. It reduced the amount of time it took to build a Model-T Ford from 12.5 hours to 1.5 hours. It led to more production, increased sales, and expanded employment.

Similarly, Industry 4.0 is generating demand for new skill-sets, such as those of data scientists, software engineers, and specialist machine operators, offering   new opportunities for employees to upskill.

 Myth 4: Implementation is too complex

The Reality: While integrating Industry 4.0 technologies can be complex, it is by no means insurmountable.

New Zealand companies such as Silver Fern Farms, Fisher & Paykel Healthcare, and Bostock, have discovered that integrating these technologies as pilot projects can lead to them being scaled up to be used more widely.

Myth 5: Industry 4.0 lacks proven success

The Reality: There are numerous success stories locally and around the world that showcase the tangible benefits of Industry 4.0.

My advice to help manufacturers to get past these myths and get started, is to consider the following evidence-based solutions.

• Start with education: Callaghan Innovation has a wide range of New Zealand case studies from local manufactures sharing best practice. The World Economic Forum is another go to website with hundreds of global case studies as part of its Manufacturing Lighthouse network.
• Consider the Smart Factory Assessment Program at Callaghan Innovation: This is working with an industry expert to find the best opportunities for improvement in process, organization and technology. It also has the benefit of being a global benchmark against your global competitors.
• Start small and scale: Begin with pilot projects that address specific pain points identified in the assessment and gradually expand as confidence and expertise grow.
• Focus on training and upskilling: Invest in training programs to equip your people with the necessary skills to work alongside new technologies.
• Leverage partnerships: Collaborate with technology providers and industry experts to navigate the complexities of implementation.
• Stay Informed: Keep abreast of industry trends and success stories to understand the evolving landscape and potential applications of Industry 4.0.

By addressing these myths with clear, evidence-based solutions, manufacturers can confidently adopt Industry 4.0 technologies and secure their place in the competitive manufacturing landscape of the future.