Smart Factory Insights: Has the Industry 4.0 Gold Rush Ended?

Industry 4.0, though only five years old, already has a checkered history. With buzzwords flying, existing technologies—re-branded as Industry 4.0 solutions—have been in demand. Manufacturers embarked on the Industry 4.0 “gold rush” to gather as much data as possible, and by whatever means necessary, to get those nuggets of smart manufacturing credibility. Today, the more mature approach of Industry 4.0 is emerging with consideration of a real return on investment (ROI) as well as sustainability. Taking advantage of such maturity may have been the smartest option all along.

The early pioneers of smart manufacturing have been doing a great job, with immense investment, sacrifice, and some compelling success stories, especially for enhanced automation of continuous manufacturing in Asia and agile manufacturing in Europe; this has demonstrated how far automation can be expanded when aided by smart software.

For these companies to “strike gold” was easy in some respects—assuming that there was enough investment available to meet the needs of bespoke solution development. This is because of the lobbying of machine vendors, utilization of middleware, and to financially assist custom solution providers to develop bespoke and specialist pieces of software, was based loosely on older industry standards and proprietary technologies. The downside of the approach was the inability to show a convincing ROI, especially considering the risks that had to be accepted with unplanned downtime as solutions needed to be adjusted and refined. The sustainability of such gold rush solutions has now become a real operational and financial burden as both requirements and technologies inexorably move forward.

The nice aspect about this early gold rush is that it has fractured the paradigm that manufacturing has been an area of short-sighted, tightly controlled investment. From the OEM perspective, manufacturing is a not-for-profit operation that simply converts raw materials into final products for sale with all associated profits accounted to the sales organization. There is extreme sensitivity in the manufacturing cost, as by the time the product has gone from the factory to the final point of purchase, the cost will have been marked up by 10, 100, or even 1,000 times (in extreme cases). An overspend of just a few cents on materials, energy, correction of defects, etc., can rapidly erode expectations for profitability, forcing up prices to a greater extent than many expect. Extreme costs of smart automation, therefore, have their effects if ROI is not rapidly achieved. The risk, however, is that in most gold rush examples, the effects are achieved slowly, a risk most manufacturers in the industry have been willing to accept.

As movies have recorded the history of squabbles and sacrifices made by those who rushed to be the few successful prospectors to make their fortunes in “them thar hills,” I wonder whether the pioneers of smart manufacturing will be regarded in the same way. Gold today represents a very reliable, predictable, and safe investment, making or preserving money in a more ordered and controlled way, which, other than the occasional heist or two, allows everyone to work together. For smart manufacturing, the same condition is emerging, with increasing interoperability of solutions and data, based on standards specifically developed within the industry for this purpose. Solutions that adopt these standards, and the core principles on which they are based, are the solutions that make smart Industry 4.0 viable, thus enabling it to deliver a very reliable, robust, and sustainable ROI.

The fundamental principles that are common to the best of these standards are the essential ingredients that make the use and adoption of smart manufacturing solutions cost effective and relatively risk-free. They are discussed below.

IoT/IIoT Messaging vs. Integration/Interfaces
The use of messaging enables different applications and solutions to become interoperable and complementary to each other without depending on licensing of shared proprietary code, and hence intellectual property (IP). In the gold rush, many companies expanded their solutions through code-sharing integration, either with different point-solutions that each provider had acquired, or by APIs with close partners. The costs for this development and ongoing dependency continue to be extremely high; it is duplicated repeatedly in slightly different ways for each customer.

The use of IIoT messaging, however, especially when defined by open standards, means that data is exchanged without any form of code dependency. Data can be freely exchanged between authorized parties and managed through standard security and access protocols. It should be noted that IIoT is very resilient to cybersecurity incidents, as there is no commonality of code or databases that would otherwise allow cross-contamination. Where an open standard is adopted, there is only one interface needed to connect everything, therefore avoiding costs of duplication and variation between use-cases.

Plug-and-play vs. Middleware
Though the use of IIoT allows for the open exchange of data, an equally important aspect of that data exchange is the mutual definition of the data content, that is, the language of communication. The principle of plug-and-play is to provide assurance that there is no need for the translation or conversion of data, which for the gold rush solutions proves extremely challenging and expensive to resolve. In the event of a slight change in any system behavior or specification, renewed development and testing could be required, which often results in lost operational time. The use of third-party technology to bridge the communication gap further complicates things as they are called in to fix sudden urgent issues for which they feel no responsibility—thus, justified premium rates to support. True plug-and-play requires an industry standard that aligns the meaning of all types of data into one language, such that there is no need for translation or conversion, bringing a massively reduced risk of failure throughout the life of any related solution.

Interoperable Specialization vs. Domination
Both software and hardware companies in the assembly manufacturing industry have their own areas of expertise and focus. In any factory, there will naturally be the need to use “the best tool for the job,” with overall solutions made up from many different vendors and each selected for their specific capabilities to perform in their required roles. The attempt by larger companies to seek domination in this environment, which allows them to provide wider solutions extending far beyond their core competence, is a far weaker and unsustainable solution than allowing individual hardware and software solution providers working together in an interoperable environment. Solution vendors who commit to providing everything that is needed are often having to develop bespoke solutions that are specific to each customer to fill in the gaps between their current capabilities and customer expectation. The gold rush pioneers have been caught out by this in many cases, an issue which is rarely satisfactorily resolved, and in fact increases in scope as manufacturing requirements and solution technologies change.

To many, explanations of IPC’s Connected Factory Exchange (CFX) standard may appear to be “just another standard” with which to exchange information around the factory, but when broken down into its fundamental values it is an excellent example of how it is becoming a complete game-changer. It is establishing the way in which all companies can now take a very much less expensive and risky path toward smart manufacturing. Hardware vendors that take their value to their customers seriously are embracing CFX and other initiatives that promote interoperability in the digital factory, with the forward-thinking software vendors also learning to do the same. Each provides a complementary value.

Is the industry yet in the situation that smart manufacturing is available at a low cost and risk to the operation? It is definitely on the way. There is still work to do to see qualification of all machine communications against the IPC-CFX standard, but the number is increasing and accelerating with time. Other standards, such as the IPC Digital Twin, published at the end of 2020, are also poised to bring another level of interoperability throughout the industry, this time related to the secure exchange of data at a system level between previously difficult-to-bridge silos.

The Industry 4.0 gold rush is effectively over once interoperability is established. Smart Industry 4.0 manufacturing is now at a “Goldilocks moment.” Rather than feeling the cost of data acquisition, operations are feeling the benefits from the use of such data. Value is created through the contextualization of collected information and relating operations together with production configurations, product design and BOM information, materials and tooling data—the holistic analysis of which detects and measures variation, identifies potential defects, and triggers actions and alerts that improve throughput, on-time delivery, quality, and productivity.

For those who want to differentiate themselves to gain competitive advantage, it can be done today with minimal cost and risk as compared to the gold rush days of Industry 4.0, if you are careful about the hardware and software tools that you select; those IPC qualified solutions that provide IIoT-based, plug-and-play exchange of data. Today is when the really smart people invest in Industry 4.0. Is that you?

This column originally appeared in the April 2022 issue of SMT007 Magazine.

 

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2022

Smart Factory Insights: Has the Industry 4.0 Gold Rush Ended?

04-06-2022

Industry 4.0, though only five years old, already has a checkered history. With buzzwords flying, existing technologies—re-branded as Industry 4.0 solutions—have been in demand. Manufacturers embarked on the Industry 4.0 “gold rush” to gather as much data as possible, and by whatever means necessary, to get those nuggets of smart manufacturing credibility. Today, the more mature approach of Industry 4.0 is emerging with consideration of a real return on investment (ROI) as well as sustainability. Taking advantage of such maturity may have been the smartest option all along.

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Smart Factory Insights: CFX IIoT Open-Source Hardware

03-09-2022

The IPC Connected Factory Exchange standard, CFX, has triggered a revolution in the way that industrial machines communicate in a secure, IIoT-based, plug and play environment. Attention now is on how CFX can be connected to older, “dumber” machines, bringing 100% visibility and control across the whole manufacturing floor, thereby avoiding the numerous technical and financial pitfalls historically experienced.

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2021

Smart Factory Insights: Digital Transcendence—Fear of The Unknown

12-22-2021

The first three industrial revolutions have brought us automation of physical tasks through adoption of mechanical and electrical machines, the benefit of which has been quite easy to appreciate. Industry 4.0 automation, however, is driven almost exclusively from the digital realm, representing a whole new world of intangibility. With manufacturing being rather averse to unplanned change or risk, unless there are very compelling reasons, how do we get to fully trust digital technology needed for our businesses today, taking us toward manufacturing digital transcendence?

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Smart Factory Insights: The Costs of Legacy Thinking

12-01-2021

As humans, we learn facts, gain impressions, create solutions, put practices into place, and move onto our next challenge. Over time, our intent is to create a legacy of value, but in many cases, we are creating legacies in a different sense. Our knowledge, experience, and creations age or become superseded, but there is resistance to replace or update. An increasing gap develops between perception and reality. Younger, more agile peers take advantage, get ahead, and we look away, thinking that they don’t know what they are doing. Though a natural human phenomenon, decision-makers in manufacturing today need to bear this mind more than ever.

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Smart Factory Insights: Hands-off Manufacturing

07-12-2021

The use of automation has not eliminated causes of unreliability, nor defects, which ironically continues to drive the need for humans to be hands-on, even as part of SMT operations. There is clearly something missing, so cue our digital twin.

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Smart Factory Insights: Me and My Digital Twin

04-12-2021

A fully functional digital twin involves more than it may initially seem. At first we tend to think about access to information. There is a great deal of trust to be taken into account when creating a digital twin, as there is scope for its use both for good and evil.

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2020

Smart Factory Insights: Changing Roles in the Digital Factory

12-01-2020

Experts once required to have a knowledge of specialized materials and processes are giving way to those experienced in the application of automated and computerized solutions. Michael Ford describes how it is time to reinvent the expectations and qualifications that we seek in managers, engineers, and production operators to attract and support a different kind of manufacturing innovation.

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Smart Factory Insights: Smart Factories—Indirectly the Death of Test and Inspection

11-04-2020

In the smart factory, test and inspection are reinvented, contributing direct added value, playing a new and critically important role where defects are avoided through the use of data, and creating a completely different value proposition. Michael Ford explains how the digitalized Deming Theory can be explained to those managing budgets and investments to ensure that we move our operations forward digitally in the best way possible.

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Smart Factory Insights: Trust in Time

08-05-2020

We’ve all heard of “just in time” as applied to the supply chain, but with ongoing disruption due to COVID-19, increasing risk motivates us to return to the bad habit of hoarding excess inventory. Michael Ford introduces the concept of "trust in time"—a concept that any operation, regardless of size or location, can utilize today.

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Smart Factory Insights: It’s Not What You Have—It’s How You Use It

06-03-2020

According to the reports, all the machines in the factory are performing well, but the factory itself appears to be in a coma, unable to fulfill critical delivery requirements. Is this a nightmare scenario, or is it happening every day? Trying to help, some managers are requesting further investment in automation, while others are demanding better machine data that explains where it all went wrong. Digital technology to the rescue, or is it making the problem worse?

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Smart Factory Insights: Seeing Around Corners

04-20-2020

Each of us has limitations, strengths, and weaknesses. Our associations with social groups—including our friends, family, teams, schools, companies, towns, counties, countries, etc.—enable us to combine our strengths into a collective, such that we all contribute to an overall measure of excellence. There is strength in numbers. Michael Ford explains how this most human of principles needs to apply to IIoT, smart manufacturing, and AI if we are to reach the next step of smart manufacturing achievement.

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Smart Factory Insights: Size Matters—The Digital Twin

02-01-2020

In the electronics manufacturing space, at least, less is more. Michael Ford considers what the true digital twin is really all about—including the components, uses, and benefits—and emphasizes that it is not just an excuse to show some cool 3D graphics.

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Smart Factory Insights: What You No Longer Need to Learn

01-14-2020

Naturally evolving layers of technological applications allow us to build and make progress, layer by layer, rather than staying relatively stagnant with only incremental improvement. To gain ground in manufacturing, Michael Ford explains how we need to embrace next-layer hardware and software technologies now so that we can focus on applying these solutions as part of a digital factory.

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2019

Smart Factory Insights: Dromology—Time-space Compression in Manufacturing

11-25-2019

Dromology is a new word for many, including Microsoft Word. Dromology resonates as an interesting way to describe changes in the manufacturing process due to technical and business innovation over the last few years, leading us towards Industry 4.0. Michael Ford explores dromology in the assembly factory today.

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Smart Factory Insights: Trends and Opportunities at SMTAI 2019

10-14-2019

SMTAI is more than just a simple trade show. For me, it is an opportunity to meet face to face with colleagues and friends in the industry to talk about and discuss exciting new industry trends, needs, technologies, and ideas.

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Smart Factory Insights: Recognizing the Need for Change

09-24-2019

We are reminded many times in manufacturing, that "you cannot fix what you cannot see" and "you cannot improve what you cannot measure." These annoying aphorisms are all very well as a motivational quip for gaining better visibility of the operation. However, the reality is that there is a lot going on that no-one is seeing.

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Accelerating Tech: Standards-driven, Digital Design Flow for Industry 4.0

04-24-2019

The term “fragmented manufacturing” is a good way to describe current assembly manufacturing challenges in an Industry 4.0 environment. Even in Germany, productivity reportedly continues to decline. To reach the upside of Industry 4.0, data flows relating to design play a major role—one that brings significant opportunity to the overall assembly business.

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The Truth Behind AI

02-28-2019

The term "artificial intelligence" or "AI" has become a source of confusion for many—heralded as part of Industry 4.0, yet associated with the threat of automation replacing human workers. AI is software rather than hardware, and it's time to put these elements of AI into context, enabling us as an industry to embrace the opportunities that so-called AI represents without being drawn in, or pushed away, by the hype.

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2018

Resolving the Productivity Paradox

12-22-2018

The productivity paradox continues to thrive. To a growing number of people and companies, this does not come as a surprise because investment in automation alone is still just an extension of Industry 3.0. There has been a failure to understand and execute what Industry 4.0 really is, which represents fundamental changes to factory operation before any of the clever automation and AI tools can begin to work effectively.

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The Truth About CFX

10-23-2018

A great milestone in digital assembly manufacturing has been reached by having the IPC Connected Factory Exchange (CFX) industrial internet of things (IIoT) standard in place with an established, compelling commitment of adoption. What's the next step?

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Advanced Digitalization Makes Best Practice, Part 2: Adaptive Planning

08-27-2018

For Industry 4.0 operations, Adaptive Planning has the capability of replacing both legacy APS tools, simulations, and even Excel solutions. As time goes on, with increases in the scope, quality and reliability of live data coming from the shop-floor, using for example the CFX, it is expected that Adaptive Planning solutions will become progressively smarter, offering greater guidance while managing constraints as well as optimization.

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Advanced Digitalization Makes Best Practice Part 1: Digital Remastering

07-02-2018

As digitalization and the use of IoT in the manufacturing environment continues to pick up speed, critical changes are enabled, which are needed to achieve the levels of performance and flexibility expected with Industry 4.0. This first part of a series on new digital best practices looks at examples of the traditional barriers to flexibility and value creation, and suggests new digital best practices to see how these barriers can be avoided, or even eliminated.

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Configure to Order: Different by Design

01-15-2018

Perhaps in the future, sentient robots looking back at humans today will consider that we were a somewhat random bunch of people as no two of us are the same. Human actions and choices cannot be predicted reliably, worse even than the weather. As with any team however, our ability to rationalize in many different ways in parallel is, in fact, our strength, creating a kind of biological “fuzzy logic.”

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2017

Counterfeit: A Quality Conundrum

10-01-2017

There is an imminent, critical challenge facing every manufacturer in the industry. The rise in the ingress of counterfeit materials into the supply chain has made them prolific, though yet, the extent is understated. What needs to be faced now is the need for incoming inspection, but at what cost to industry, and does anyone remember how to do it?

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