How CEOs can set themselves up for growth with Industry 4.0

By Rob Stummer, APAC CEO, SYSPRO

Australia’s Performance of Manufacturing Index (PMI) was at 48.3 in December according to the AI Group.

The concern is that the downturn in manufacturing recorded in November and December is a clear warning of the growing risk of a more broad-based slackening of the Australian economy.

Facing a range of pressures that may lead to a reduction in order sizes, needing to predict the customer’s next move and with current skills not keeping up with advances in Industry 4.0 technologies; the challenge for today’s manufacturers can seem endless.

Not only are there cost pressures for these manufacturers, but the high level of regulation in the food and beverage and healthcare industries particularly, the increasing costly delivery of raw materials and components as well as high volatility in commodity prices have all put intense strain on already thin margins. 

What every manufacturing company's CEO should be looking to do right now is to set their company up for long term growth, so they can be more competitive. But how can they be proactive rather than reactive to achieve this growth ahead of the competition under more challenging business conditions? 

Introducing smart technology

Manufacturers need to keep up with the challenge of constantly improving their factory’s efficiency. Demands for personalisation and reduced lead times are increasing and requirements are constantly changing. The competition is biting at their heels and therefore the increased pressure to adapt can jeopardise quality and uptime.

The introduction of smart Industry 4.0 technologies that support the long-term growth of manufacturing companies is imperative to securing jobs for Australians and enabling them to be more competitive now and into the future. It is also important to acknowledge that this means letting go of legacy systems that are costly to maintain, are not properly supported, are not integrated with other applications and do not deliver a strong return on investment. 

What should the priorities be in terms of an IT strategy?

Manufacturers of all sizes need to have an Industry 4.0 strategy in place first that encompasses their approach to implementing cyber-physical systems including: the internet of things (IoT), industrial internet of things (IIOT), cloud computing, cognitive computing and artificial intelligence (AI).


AI has the capacity to make sense of the abundance of data gathered by IoT (and IIoT) devices through systems that can adapt and learn. By expanding digital intelligence adoption, AI can help decision-makers convert this data into actionable insights to drive improved innovation, resulting in better operational and financial decision making.

The promise of Industry 4.0

The manufacturing industry is growing increasingly complex and is awash with data gathered from IoT instruments and sensors, machinery, automation systems, production and operation equipment, maintenance records, as well as health and safety applications that all produce a constant flow of data. This shop floor data is growing exponentially, but how do manufacturers use the power of data to thrive in the Industry 4.0 era? 

It is critical for manufacturers to unlock the potential of real-time and unstructured data to make daily decisions that balance quality and throughput. With the average manufacturing site running on over one hundred software applications, it is an enormous challenge to make that data accessible and actionable.

Making that step to implement Industry 4.0 technologies will support the delivery of insightful data throughout their organisation, not only to meet customer needs and to aim for continuous process improvement, but also to ensure that the workforce is allocated with optimal efficiency in mind, especially given the high wage costs in Australia. 

Industry 4.0 is revolutionising manufacturing in Australia, with new abilities to design and manufacture complex, customised products with short lead times, minimal tooling, wastage and low labour demand.

Upskilling for Digital Transformation

Processes, workflows and the knowledge around performance are dramatically changing. Manufacturing operations can no longer work in linear execution, or in isolation of other functional departments including engineering, maintenance and planning. Instead, the value chain needs to operate as a single entity, one that is fully integrated to support the variable demand cycles and increasing costs of supply activities.

Upskilling the workforce to be ahead of their digital transformation journey means that when processes are automated and traditional factory floor manufacturing roles are made redundant, these resources are ready to be moved into newly created high-tech roles that can be increased or reduced according to demand and the required output.

The next step for manufacturers

Many Australian manufacturers have yet to fully embrace Industry 4.0 technologies, however, they will come under increasing pressure to do so. Those that hold back will be driven out of the market and sent to the wall by competitors using sophisticated technology to increase efficiency, reduce costs and the ability to target their market with pinpoint accuracy. 

By Rob Stummer, Asia-Pacific CEO, SYSPRO


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