COVID-19 can be a catalyst for change in the Global Manufacturing Industry

  Dec 9, 2020 6:16:47 AM

The global manufacturing and supply chain industry is experiencing a level of disruption that has never been seen before. Latest market reports suggest that the COVID-19 pandemic has hit the manufacturing sector severely. For some it has posed an existential threat while some others have ceased production completely or are witnessing a sudden reduction or surge in demand.

While it is said to have a lasting impact on business, manufacturers need to have plans in place to emerge stronger than before. Thus, COVID -19 can be a catalyst for a major change in the manufacturing sector.

The Smart Manufacturing phenomenon, or Industry 4.0, started over a decade ago with focus on creating smart factories or factories of the future. What the World Economic Forum dubs as Lighthouse Factories are basically smart factories that are a part of the Forum’s Global Lighthouse Network and are paving the way in the adoption of Industry 4.0 technologies. These factories have proven that to bring operational flexibility and substantial performance benefits, IIoT needs to be deployed at scale.

With the adoption of IIoT technologies, some manufacturers have increased productivity by 10% to 50%, reduced costs by 5% to 40%, and decreased time to market by 30% to 60%. The concept of Lighthouse Factories is an exciting subject with huge potential benefits but in many companies it is still in an evaluation or proof of concept stage. Some other are waiting to ‘cross the chasm’ into mainstream adoption to get future clarity with respect to the expected benefits across different areas for different types of industries.

However, COVID-19 has exposed the loopholes in the manufacturing sector, accelerating the shift towards digital transformation.

Manufacturers are reshaping their business processes and the idea of digital transformation is not a luxury anymore but has become a necessity. An overwhelming majority of manufacturers are describing Industry 4.0 as an essential element in their future survival, emergence, and growth strategy. As per a recent MPI 2020 Industry 4.0 study, 83% of manufacturing leaders see Industry 4.0 as extremely or very important to their companies and 56% believes that “Industry 4.0 will have a significant impact” in the next five years. A survey conducted by HFS Research found that manufacturers are willing to invest in technologies that will provide them with visibility, efficiency, improved productivity, and quick cost savings.

Here are examples of some companies who have adopted Industry 4.0 to ensure safety and improved productivity due to COVID-19:

  • Eaton: Ensuring employees’ safety by empowering them to conduct vital work functions remotely using Microsoft HoloLens 2 AR glasses, which display 3D image of the physical factory space in real-time without requiring the employee’s physical presence.
  • Hitachi: Monitoring factory employees with thermographic cameras as well as keeping track of PPE usage via video surveillance.

According to McKinsey, manufacturers who can move quickly to digitally transform their operations and supply chain can respond better to operational changes brought on by COVID-19 and will be able to ramp up production again. While they must envision a robust digital strategy with clearly defined financial and performance goals, these need to be aligned with real business needs and defined timelines to achieve the transformation. Companies that can make their operation and supply chains more transparent, predictable, and resilient will have a considerable advantage over their slow-moving competitors.

Sasken partners with enterprises to assess their Industry 4.0 maturity by using its in-house Maturity Framework and create roadmaps for successful IIoT implementations. Sasken’s ability to implement proven use cases that offer high business benefits in areas of operational efficiency, supply chain, worker productivity, and utilities, makes us the ideal partner of choice for our customers who are looking to digitally transform their Industrial enterprises.

Leveraging its decades of chip-to-cognition expertise, Sasken has developed Industry 4.0 solution accelerators with state-of-the-art features that can be customized quickly to reduce time-to-market and lay the foundation for Industry 4.0.

Posted by:
Neeraj Rattan
Senior Pre-Sales Consultant, Industrials Business, Sasken

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