Manufacturers are slow in adopting Industrie 4.0 into their operations

Many manufacturers in the U.S. and the United Kingdom aren't adopting Industrie 4.0 because they don't realize its potential and don't see how it will improve their overall revenue according to research from the Boston Consulting Group (BCG).

By Freddie Roberts January 6, 2017

The Boston Consulting Group (BCG) claims many manufacturers in the U.S. lack the urgency or strategy to adopt Industrie 4.0 in it’s latest piece of research, "Sprinting to Value in Industry 4.0."

The global management consultancy, which surveyed 380 US-based manufacturing executives before reaching this conclusion, also said that while most manufacturers recognize the potential of Industrie 4.0 to create value, they do not necessarily see the full opportunity. Therefore, US manufacturers are not rushing to adopt it.

For example, nearly 90% of manufacturers regard adopting new digital industrial technologies as a way to improve productivity, but only about one in four see opportunities to use these advances to build new revenue streams. Thus, without direction from the top many are pursuing fragmented initiatives.

Industrie 4.0

Industrie 4.0 is widely regarded as the next phase of digitization in the manufacturing industry, but it’s not some impressive new technology. It’s simply a different way of doing things. It involves the increasing move towards automating previously manual processes and regular data exchange between machines. The enablers of this are Internet of Things (IoT) technologies, cloud computing, and cyber-physical systems in order to ultimately create smart factories and production lines.

And yet, despite all these possibilities, BCG’s report indicates that there is not much of an appetite for Industrie 4.0 because manufacturers do not view Industrie 4.0 as a means to improve their overall revenue.

However, it also comes down to culture. Indeed 40% of respondents cited changing culture as the biggest challenge to embracing this new industrial revolution. Change isn’t always easy, and it seems that some manufacturers in the U.S are struggling to define a strategy before implementing that change while others are finding it hard to attract the right talent to help carry out adoption.

A global problem

The U.S. is not alone. According to the Daily Telegraph, research conducted by the British trade organization, EEF, found that while 42% of manufacturers feel they have a good handle on Industrie 4.0, only 10% feel ready for it.

While there isn’t enough evidence to suggest this is a global problem, it certainly comes as a surprise that two of the most advanced nations in the world—as well as the architects of the first industrial revolution—are struggling with the next logical step.

Vlad Lukic, BCG partner and co-author of the report, indicated that the problems stem from a lack of understanding. "Our findings point to the need for US manufacturers to gain a deeper understanding of how they can apply Industrie 4.0 and accelerate the pace of adoption," he said.

BCG principal consultant and co-author of the report, Tom Milon, said, "Providing hands-on experience is essential for helping managers understand the state of the art in Industrie 4.0 and the innovative ways they can apply these technologies in their plants."

Lukic summed it up with a running analogy, "The winners will approach the race to Industrie 4.0 as a series of sprints but manage their program as a marathon."

Freddie Roberts is a reporter for Internet of Business. This article originally appeared on Internet of Business. Internet of Business is a CFE Media content partner. Edited by Chris Vavra, production editor, Control Engineering, CFE Media,

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