US manufacturers too slow to adopt Industry 4.0, finds report
US manufacturers too slow to adopt Industry 4.0, finds report
US manufacturers too slow to adopt Industry 4.0, finds report (Image credit: BCG)

US manufacturers too slow to adopt Industry 4.0, finds report

The Boston Consulting Group claims many manufacturers in the U.S. lack the urgency or strategy to adopt Industry 4.0 in its latest piece of research.

The global management consultancy, which surveyed 380 US-based manufacturing executives before reaching this conclusion, also said that while most manufacturers recognize the potential of Industry 4.0 (known as Industrie 4.0 in Germany – Ed) to create value, they do not necessarily see the full opportunity and are therefore not rushing to adopt it.

For example, nearly 90 percent of manufacturers regard adopting new digital industrial technologies as a way to improve productivity, but only about one in four see opportunities to use these advances to build new revenue streams. Thus, without direction from the top, many are pursuing fragmented initiatives.

Click here for further details on our Internet of Manufacturing North America conference, the industry-leading event exploring Industry 4.0 and the Industrial Internet.

Industry 4.0

Industry 4.0 is widely regarded as the next phase of digitization in the manufacturing industry – the fourth industrial revolution if you like – but it’s not some impressive new technology, it’s simply a different way of doing things. It involves the increasing move towards automating previously manual processes and regular data exchange between machines. The enablers of this are Internet of Things (IoT) technologies, cloud computing and cyber-physical systems in order to ultimately create “smart” factories and production lines.

Yet, despite this world of possibilities, BCG’s report, Sprinting to Value in Industry 4.0, indicates that there is not much of an appetite for Industry 4.0. In part, as mentioned, this is because manufacturers see the opportunity to reduce costs, but do not view Industry 4.0 as a means to improve their overall revenue.

But it also comes down to culture. Indeed 40 percent of respondents cited changing culture as the biggest challenge to embracing this new industrial revolution. Change isn’t always easy, and it seems that some manufacturers in the U.S are struggling to define a strategy before implementing that change, while others are finding it hard to attract the right talent to help carry out adoption.

Related: 9 examples of manufacturers making IIoT work for them

A global problem?

The US is not alone in this problem, though. Research conducted by the British trade organization, EEF, found that, while 42 percent of manufacturers feel they “have a good handle” on Industry 4.0, only 10 percent feel ready for it, according to the Daily Telegraph.

While we don’t have enough evidence to suggest this is a global problem, it certainly comes as a surprise that two of the most advanced nations in the world – including the architects of the first industrial revolution – are struggling with the next logical step.

Vlad Lukic, BCG partner and co-author of the report, indicated that the problems stem from a lack of understanding.

“Our findings point to the need for US manufacturers to gain a deeper understanding of how they can apply Industry 4.0 and accelerate the pace of adoption,” he said.

To do this they need experience, BCG principal consultant and co-author of this report, Tom Milon said. “Providing hands-on experience is essential for helping managers understand the state of the art in Industry 4.0 and the innovative ways they can apply these technologies in their plants.”

Lukic summed up with a running analogy: “The winners will approach the race to Industry 4.0 as a series of sprints but manage their program as a marathon.”

Related: Q&A: MIT expert Frank Piller talks smart manufacturing & Industrial IoT

Internet of Manufacturing North America is the only event bringing together solely C- and VP- Level business and technical manufacturers to share best practices and inspire new revenue opportunities.

The two-day conference and pre-event welcome day deliver high-level presentations from high-profile speakers at BoschCaterpillar, Konecranes and thyssenkrupp Elevator. Attendees also get the chance to attend hands-on and interactive sessions, a live tour, as well as extended networking and team-building sessions to an audience of pre-qualified manufacturers. Click here for further details.