Deciding on 4.0 Technologies

It is an exciting time to be in quality. With the Industry 4.0 revolution at hand, some long-desired goals are now within reach. Real-time data from the internet of things, single-piece flow from additive manufacturing, and industry-wide material traceability with blockchain are just a few of the opportunities accompanying the fourth industrial revolution.

Although we are on the cusp of a revolution, desired results have proven difficult to realize. Some companies’ share prices soar with the mere mention of 4.0 technologies,¹ yet there is evidence most companies are failing to achieve their desired results.

One study found that only 14% of surveyed organizations characterized their current progress as successful.²

Fortunately, the chances of a successful 4.0 implementation can be improved by focusing on fundamentals. To keep the focus on fundamentals, three questions should be considered when new technology sparks interest in your organization:

• Should this be implemented?
• Can this be implemented?
• When should this be implemented?

These are straightforward questions, but evaluating critically and honestly is key. The critical analysis starts with evaluating if a particular technology should be pursued.

Just because Wall Street is smitten does not mean every organization should implement a given technology. To be successful, new technology must enhance or revolutionize the unique way that your organization provides value to its customers. Two common impacts of well-integrated technology are cost reductions and delighted customers.

Implementations that delight customers have strong advantages in drawing new high-value customers. Cost reductions generally must be justified with hard savings and strong return on investments, which can be difficult to do with subtle improvements. Conveniently, Industry 4.0 can make entire processes obsolete and facilitate unique offerings to customers, but organizations must question “the way it has always been done.”

Because the most promising technologies require significant change, it is important to make an objective evaluation of your organization’s ability to implement the change. Naturally, it’s rare to have extensive experience with 4.0 technologies, but the same is true of the competition. Organizations can look to experiences with similar or analogous technologies to see through the hype and significantly expedite the implementation learning curve.

The other needed skill is change management. Organizations that train people on change management, such as John Kotter’s eight-step change model,³ and that have practiced successful change throughout the organization, will be better positioned to manage the complexities of such change. Look for objective evidence of past success in technology and change to judge the organization’s ability, without underestimating the challenges.

Having asked the hard questions about opportunities and challenges, an organization must assess when to implement new technology. It may seem a project that should, and can, be implemented must be expedited, but with 4.0 technology, this is not always the case. There are first mover and second mover advantages in the race to 4.0:

• First movers have the advantage in cases with network effect, where utility increases as market share increases, or if there is a finite market to possess.
• Second movers’ advantage is gained by learning from others and letting technology mature over time. Will it be cheaper, better, or both in a few months or years?

First mover advantage is often romanticized, but history is full of successful second movers. In the absence of first mover advantages, the risk and cost may be less while payout more with the practice of restraint.⁴

Industry 4.0 is exciting and full of opportunity. Quality professionals and others will be on the forefront in applying these new technologies, but all should recognize that technology amplifies what is already existing in an organization. The most successful implementations will address their organization’s fundamentals by enacting new technology at the right time, building entirely new processes and finding new ways to delight customers.

REFERENCES

1. Liz Moyer, “Kodak Shares Have More Than Tripled Since Announcing ‘KodakCoin,’” CNBC, Jan. 10, 2018.
2. Jean Pierri Petit, Pascal Brosset and Pierre Bagnon, “Smart Factories @ Scale,” Capgemini Research Institute, 2019, www.capgemini.com/wp-content/uploads/2019/11/Report-–-Smart-Factories.pdf.
3. John P. Kotter, Leading Change, Harvard Business School Press, 1996.
4. Paddy McNutt, Decoding Strategy: Patterns and Predictions, McGraw Hill, 2016.

This article was originally published October 2020 edition of Quality Progress as part of the feature article “Now What? We Asked Seven Experts To Share Their Best Advice. Get On Board!”