Industry 4.0 is Gaining Steam: What Should Your 2024 Budget Prioritize?
Industry 4.0 spending is projected to grow more than 500% from 2022 to 2032, at a rate of more than 20% annually according to Market.us. Manufacturing leads the pack of industrial adopters, forecast to grow at the highest rate over this period.
As manufacturing organizations create their budgets for 2024, one question that’s top of mind is where digital strategies should be on their priority list.
The short answer: digital investments will be vital to staying competitive and winning the war for talent, with quality technology also providing a critical lever for operational excellence. What’s more, companies will need to be strategic about their investments, looking for solutions that provide maximum return for the cost and effort.
The Future Is Digital
There’s no question that the future is digital, and that tomorrow’s leaders will be the ones who make smart investments in digital and Quality 4.0 technologies.
Automotive OEMs like Toyota, BMW and Ford have embraced Quality 4.0 as a core manufacturing focus, making it critical for their suppliers to adopt a similar focus. Those that don’t are already at risk of being left behind.
Experts at LNS Research note that among industrial transformation (IX) leaders, the benefits of investing in digital technology are growing, as is the speed and quality of organizational decision-making. This in turn promotes agile operations and greater resiliency overall for companies.
There are several factors driving the growth of Industry 4.0, including:
- New technology such as cloud software, big data analytics and Industrial Internet of Things (IIoT)
- Growing demand for real-time data and insights that allow operations and quality leaders to make data-driven decisions
- Desire to use new technologies to improve operational efficiency by improving productivity while reducing waste and costs, which can help offset the burden of inflation
- Labor market challenges including staffing shortages, loss of institutional knowledge with the retirement of baby boomers and difficulty attracting and retaining new manufacturing talent
Quality 4.0 in the Spotlight
One element helping fuel the momentum behind industrial transformation is the rise of Quality 4.0, which focuses on using digital technologies to improve quality and production processes.
Despite the hype around applying artificial intelligence (AI) to quality, research from the Journal of Intelligent Manufacturing indicates up to 87% of big data projects don’t deliver the desired benefits.
What does this mean for manufacturers?
For many, the answer lies in starting with smaller projects—and leveraging digital solutions proven to deliver results for well-defined objectives.
Take, for instance, connected worker technology that allows plant floor employees to access information, guidance and audit checklists in real-time. LNS Research’s 2023 State of Industrial Transformation (IX) survey reveals that more than 75% of companies are implementing, piloting, or have plans to implement a connected worker initiative. Those identified as IX leaders are also nearly three times as likely to be engaged in connected worker projects as compared with IX followers.
Making Strategic Investments in Quality
94% of respondents in a recent McKinsey survey said digital solutions will be a central part of future automation efforts. They also point out that companies have in recent years moved away from internally developed solutions that never reached full implementation.
As companies create their 2024 budgets, they should look for opportunities where modest investments can generate big returns. Plant floor audit software like EASE that lets companies monitor process adherence is a prime example, providing rapid time-to-value in terms of reducing defects, complaints and quality costs.
Industry 4.0 spending is on the rise, but manufacturers need to choose solutions wisely to achieve real value from their Quality 4.0 efforts. Projects that are both cost-effective and high impact will be crucial in moving companies forward, setting the stage for improved productivity, profitability and operational excellence.