5 Steps to Prepare Your Organization for an Industry 4.0 Transformation

March 13, 2024

Manufacturers face increasing disruption. From supply network issues to workforce challenges, they face ongoing pressure to innovate their manufacturing strategies. Industry 4.0 offers manufacturers a path to address these disruptions.

When it comes to Industry 4.0 initiatives, manufacturing leaders must be able to provide a clear vision to drive transformational change in their organizations. We can talk all we want about the convergence of Information Technology (IT) and Operational Technology (OT) to create a cyber-physical environment, or how connectivity and intelligence can integrate systems and processes. But unless leaders understand how to build a change-management culture, they are likely to find it difficult to implement technology while sustaining day-to-day operations and activities. 

Looking back at dozens of Industry 4.0 readiness assessments over the past few years at CONNSTEP, part of the MEP National Network™, it would appear that many manufacturing leaders are not fully prepared for the scope of change needed to transform their organization. You will be better prepared to launch your adoption of new technology if you can:

  • Communicate why you need Industry 4.0 applications. Your company is not going to be able to solve workforce issues with more people, so upskilling the current staff is critical. If you are like most manufacturers, you also must increase labor productivity.
  • Rally the troops. You must be able to articulate the connections between new behaviors and organizational success and see initiatives through implementation until they create sustainability that replaces old habits. Define what success looks like and how you will track progress.

Industry 4.0 is about people, processes, and technology. The technology helps you leverage the process change, but it is dependent upon the people. 

Here are five steps for you to follow to vastly improve the chances of long-term success with an Industry 4.0 technology adoption and a business transformation.

1. Create a Sense of Urgency

This early step requires a delicate balance. It involves ensuring people grasp the threats and impact of not evolving as well as understanding why this change is important. The focus here is on turning threats into opportunities. Your goal at this stage is to inspire people to act, which demands passion and purpose to excite people to work together outside of their comfort zone.

Be honest and open in gathering feedback before you launch this kind of initiative. Involve key people and stakeholders in your organization to understand their challenges and concerns. Eventually everyone involved will ask, “What’s in it for me?” 

Make sure your efforts are directed at problems that need to be solved. Create a clear theme that connects the initiative with your vision. Invest in a solution that has a clear benefit to your company. Don’t be like the client that bought a cobot, figuring they would be able to find a spot for it in their operation only for it to end up in a closet.

  • Must do: Relate a sense of urgency about your business situation. Perhaps you need to deliver additional products more quickly or improve quality.
  • Keep your eye on: The burdens of day-to-day activities. You are building urgency on top of existing urgency. 

2. Form a Strategic Vision

This step can be difficult for many manufacturers who regularly struggle with how to bring strategy into such a tactical environment. Leaders must be able to articulate a message that clearly resonates and aligns across the organization. They must account for the company’s core values, what they will be working on, and what they will not be working on. They must link this vision to goals in every department.

This is not just about choosing your shop floor intelligence package. Think about this as a series of initiatives. What are you going to do with legacy machines? Even your newer machines may have to be upgraded. What about data? How are you going to analyze all the data you will be capturing?

Change also brings disruptions in manufacturing operations, which not only impacts production output but also takes people further out of their routines. People don’t know what they don’t know, so how can they be comfortable about where they are going?

  • Must do: Show a clear path for success, individually and for the operation.
  • Keep your eye on: Buy-in is essential, so don’t overlook the importance of clarifying how the future will be different from the past.

3. Enable Actions by Removing Barriers

Three main areas present barriers to digital transformation: financial, organizational, and technological. Companies grapple with the challenge of funding digital deployment without the benefit of immediate returns. Lack of leadership focus and a failure to invest in talent can also impede digital transformation progress. The complexity of understanding multiple platform choices can hinder a company’s ability to move quickly. Overcoming these obstacles is a key example of how exceptional companies embrace digital transformation. 

Your organizational structures and processes will need to change to accommodate technology adoption. Remember, the goal is not fitting new equipment or a new application into your existing workflows. The goal is leveraging innovation to its fullest potential. Establish a cross-departmental task force to facilitate agile collaboration across silos and generate impact more quickly.

People often serve as barriers to change. Recognize the significant shift employees are asked to make, moving away from procedures that have emerged over time. Additionally, some chaos may be inevitable during technology adoption. Acknowledge and reward people for their efforts, especially early adopters. Demonstrating appreciation for new behaviors incentivizes broader adoption throughout the organization.

As an example, a small manufacturer was implementing model-based definition (MBD) into their production processes. Implementing MBD would allow them to respond to more opportunities from one of their primary original equipment manufacturer customers. They found that there was a gap within their workforce that caused some of the workers to revert to 2D drawings, slowing the process and negating some of the benefits of MBD. By partnering with a local community college, they were able to upskill the staff to work with 3D digital models, enhancing their processes for MBD.

You should be prepared to dedicate resources as needed. Breaking down some barriers will require financial investments – such as with additional equipment or software – or a change in staffing.

  • Must do: Frequently check in about the state of barriers and limiting factors.
  • Keep your eye on: Provide solutions for what key people in the initiative are no longer doing. When a customer needs immediate attention, how can you solve that issue without extracting key people from the transformative work? 

4. Generate Short-Term Wins

A comprehensive Industry 4.0 transformation can take years, and many facets of it will take several months or more. Be sure to celebrate early wins, even if they seem small, to help people see value and provide momentum. Find ways to frequently reward contributions.

For example, we have seen a company that implemented a new production monitoring software share the dashboards with its machine operators. This involved them in the process of refining the dashboards and understanding what the data is showing on production processes. This also sets the stage for future wins, such as when machine operators use that data to make adjustments to avoid shutdowns, increase output or reduce waste. 

  • Must do: Find ways to break down long and involved stages into segments or activities that can be measured and celebrated. It might be the first time you reach a certain threshold on your way to a final goal.
  • Keep your eye on: Initiative fatigue is real. You don’t want to lose momentum.

5. Sustain Acceleration

You can initiate your Industry 4.0 journey with a small-scale project or at a single site. Each achievement gains you credibility, motivating you to scale up by pressing ahead with the next initiative.

An Industry 4.0 transformation takes significant effort, and setbacks are inevitable (and often beyond your control, such as macro or micro market shifts). A key to maintaining focus and discipline through disruptions is the persistent connection of change to success. A transformation is a series of impactful changes. Some will be internal (behaviors and processes), and some will impact the business (productivity, quality, cycle time, or cost). 

Old habits die hard. Make sure to evaluate systems and processes and reinforce new behaviors. Continuously measure and adjust accordingly. Maintain an unwavering commitment to advancing forward.

Must do: Have a passionate leader, a strong project manager or champion, and have buy-in throughout the entire organization.

Keep your eye on: If you get stuck, revert to the PPT framework – people, process, and technology – to find ways to move forward. 

Your Local MEP Center Can Help You Get Started on Your Industry 4.0 Journey

Purposeful leadership and organizational readiness are crucial for success in implementing new technology. Experts at your local MEP Center can help you prepare your leadership team to drive transformational change through your organization.

About the Author

Jeff Orszak

Director, Business Technology & Innovation

Jeff Orszak is an industry expert in digital transformation. He assists companies with innovation and product development in his role at CONNSTEP, part of the MEP National Network™. Jeff is responsible for coaching companies in originating new ideas, generating innovative concepts, and establishing best practices that contribute to organizational improvement and problem solving. Jeff also works with companies in creating innovation partnerships to bring new technologies to market. He has more than 20 years of product development and program management experience, leading diverse teams in telecommunication, semiconductor, and aerospace industries.

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