What Industry 4.0 can do for small to mid-sized businesses

First it was MRP (materials resource planning), then ERP (enterprise resource planning), which fell into the realm of Industry 2.0. Today, we’re entering the world of Industry 4.0, and many—especially small to mid-sized business operations—are wondering what this means for them. Many plastics processing machinery companies are pushing Industry 4.0, such as WittmannBattenfeld’s "Your Pathway to 4.0" tag line.

Eskander Yavar, National Leader, Management and Technology Advisory Services, at global accountancy BDO took the time to explain to PlasticsToday what Industry 4.0 is and what it means for companies that adopt the technology. It doesn’t have to be scary or expensive and can be implemented in steps or stages, depending on where the technology most benefits your business.

For many plastic processors and moldmakers, robotics and automation are the first things that come to mind. Machine-to-machine connectivity and data gathering are two of the first steps. “This will be an evolution rather than a revolution," said Yavar of the move toward Industry 4.0. “It takes time. Very few small to mid-sized business will go from zero to sixty and go completely digital with their customers tomorrow.”

Industry 4.0 is “grandiose in what it’s meant to be, but you don’t have to implement it all at once,” Yavar explained. “You need a road map for improving your operations, determining where it makes sense to be digitally connected with the shop floor, suppliers and customers. There are some benefits to making small improvements.”

There are many opportunities for starting the 4.0 digital platform process and the first step is taking a snapshot of a “moment in time” to determine where your company needs to improve and make progress.  It could begin with the master production schedules. Do you have an MRP or ERP schedule in place? 

Yavar noted that software for implementing Industry 4.0 is much more affordable, so there’s less risk involved, and you can begin driving immediate value in a small way to help your business make its digital transformation. “Understand where there’s opportunity to make transformative improvements in your business and what is needed to make those transformations,” he said. 

Yavar suggests that businesses take a moment to self-reflect—where are your pain points? “Those might be great candidates for improvement,” he said. “Take a moment to pause and reflect on where to improve your business. There’s always an opportunity for making your business better. Be ‘case’ oriented and take it one step at a time—you can’t change the world in a year. It can be a two- to six-week process, but look at a part of the business that’s not functioning as well as it should be. That’s an excuse to make an improvement." 

Industry 4.0 means having a common digital platform across all software as opposed to having various software programs that require integration points to make it communicate. For example, material suppliers will be linked to a processor’s MRP or ERP system to enable them to know when inventory levels require a material shipment, allowing the resin company to fulfill that demand in a timely manner.

Industry 4.0 is about being able to start assessing what you can do to affect your production and delivery schedule. “The old world way was to close your books at the end of each month, look at your financial statement and see if you have a problem,” Yavar said. “Industry 4.0 is not looking in the rear-view mirror but looking forward and proactively projecting manufacturing activity, such as production scheduling, delivery and getting raw materials in on time. Industry 4.0 provides data and can read information through visible intelligence. It’s an interpretation tool. It’s all about speed—speed to make decisions, adjust to the market, adjust to change and be a better supplier to your customers.”

Yavar noted that because many of the small to mid-sized plastics companies are part of a much larger supply chain, they need to learn to be more customer centric—either relying on winning relationships or providing best service. They need to decide where they want to be.”

In part two of this series, Clare Goldsberry explores what Industry 4.0 means for the global workforce.