Bottom Line: The expertise, insights, and intensity it takes to excel at quality are the guardrails Industry 4.0 projects need to stay on course and deliver results.
- 62% of manufacturers are focusing on improving quality as the cornerstone of the customer experiences (CX) they deliver today.
- Increasing operational efficiencies (67%), improving CX, and modernizing IT infrastructure (both 65%) are the most important Industry 4.0 short-term goals manufacturers have today.
- 89% of manufacturers interviewed say their Industry 4.0 initiatives to date have been successful.
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Product quality says more about who a manufacturer is versus the millions of dollars they spend on marketing to create a brand. Their quality is their true brand. These and many other interesting insights are from BDO’s 2020 Middle Market Industry 4.0 Benchmarking Survey published earlier this week. A copy of the results is downloadable here (PDF, 41 pp., no opt-in). The 2020 BDO Middle Market Industry 4.0 Benchmarking Survey was conducted by Rabin Research Company, an independent marketing research firm. The survey was conducted in late 2019, before the global COVID-19 pandemic. For additional details on the methodology, please see page 4 of the study or the survey’s page online. The survey found that at the start of 2020, 30% of manufacturers were implementing their Industry 4.0 strategies, up from just 5% in 2019.
Key insights from BDO’s 2020 Middle Market Industry 4.0 Benchmarking Survey include the following:
- Manufacturers succeeding with Industry 4.0 pilots progressing into production ad prioritizing customer experience (CX) as a key strategy for retaining customers in a downturn. For middle-market manufacturers with revenues $1B or below, they’re often suppliers to larger, more distributed manufacturers. A proven strategy for excelling as a supplier is to exceed quality levels for the most valuable customers regularly deliberately. And for manufacturers selling directly to customers, excellent quality earns brand loyalty. Industry 4.0 succeeds when all variation is taken out of production processes, so perfect quality is delivered every time.
- When asked for the top six priorities their customers have in early 2020, manufacturers say Quality and New Products and Services lead all others. Industry 4.0 initiatives and pilots make it to production by accomplishing three key tasks. First, the most effective Industry 4.0 pilots deliver data that demystifies why product quality, production yield rates, and costs fluctuate. Second, there needs to be a compelling business case that shows how production efficiency delivers cost reductions. Third, answering the question of how Industry 4.0 is going to diversity revenues needs to be addressed. Achieving these three key tasks sets up any manufacturer to excel at the customer wish list below:
- Comparing the rankings for short-term and long-term business objectives for Industry 4.0 reflects why excelling at product quality is essential to their success. What every short- and long-term business objective has in common is that each either directly relies on or contributes to keeping product quality excellent. Even bolstering cybersecurity has a key role to play in product quality by alleviating the risk of data exfiltration, Intellectual Property (IP) theft, thwarting the sabotage of production systems, or the interruption to production lines. Excelling at quality makes each of these goals below more achievable and brings greater meaning to everyone involved in making them happen.
- 41% of manufacturers say achieving greater market differentiation is a top short-term business goal, and one of the primary factors driving their Industry 4.0 strategies. Using Industry 4.0 to understand then automate key production processes, improve supplier quality, and increase the reliability of products is key to staying competitive in any downturn. It’s better to use new technologies to improve yields to support stable prices instead of sacrificing margins in price wars.
- Realizing that every identity is the new security perimeter of their organizations, manufacturers need to take a Zero Trust-based approach to securing operations. Manufacturers are most concerned with cyberattacks or privacy breaches (48%). 31% see industry disruption being the #1 digital threat. Taking a Zero Trust approach to their cybersecurity strategies enables them to treat and scale every identity as a new security perimeter. Manufacturers would do well to follow the example of the U.S. Department of Defense (DoD) Armed Forces who rely on MobileIron to defend user’s devices globally. MobileIron provides the industry’s first mobile-centric security platform that makes the mobile device the ID that is used by the user to access the infrastructure, according to Dr. Chase Cunningham of Forrester. Chase writes in his recent book, Cyber Warfare – Truth, Tactics, And Strategies, “because the mobile device is the ID, it is possible to fully eliminate passwords and enable a secure user authentication from user devices without requiring the user to remember or even type in passwords” (pg. 241).