Why manufacturers should embrace disruptions

Leveraging smart tech and digitization to stay competitive in Industry 4.0.

Photo by Brock DuPont on Unsplash

From the advent of the steam engine, to the history-altering discovery of electricity, mass production, and computer and automation, the manufacturing sector has been gathering the foundational blocks for a seismic shift. Whether you call it “Industry 4.0”, “IIoT”, or the “digital factory”, the fourth industrial revolution is here, alive and well. So well, that industrial companies globally plan to invest over US$900 billion to double their level of digitization.

What does “digitization” entail? McKinsey credits big data and connectivity, advanced analytics and AI, human-machine interactions, and digital-to-physical transfer with being the strongest forces driving the revolution — all together, paving the way for the ultimate ideal: fully automated “smart” factories. Factories that, globally, are expected to deliver an additional $500 billion to $1.5 trillion to the economy by 2022.

[Smart] factories globally are expected to deliver an additional $500 billion to $1.5 trillion to the economy by 2022.

And yes, that’s trillion with a capital T.

All the hype aside, it’s clear that companies that embrace the onslaught of new tech to improve efficiency and productivity will take over the control panel, while the rest will either need to uncover a new competitive advantage, or suffer Kodak-ian consequences. Yet, why is it that so many factories are left in the dust?

Despite all the data that factories collect, Forrester reports that up to 73% of data collected on the manufacturing floor goes unused. The reality is, the path to a fully automatic, data-driven factory—the ultimate smart factory dream—is riddled with obstacles. The lack of clarity around economic benefits, silo-ed data systems, overwhelming amounts of data, and a lack of buy-in from decision-makers stand in the way of many companies’ leap into true efficiency. So, where does one get started?

Say hello to your new colleague, “disruption”.

At the beginning of May, MaRS Venture Programming and MaRS Energy & Environment brought manufacturers and innovative manufacturing tech companies together for a discussion around the importance, and challenges of adopting Industry 4.0. With the launch of Ontario’s Advanced Manufacturing supercluster, bridging the gap between manufacturers and tech companies is more important than ever. How can manufacturers who are being disrupted leverage these new technologies in the new era of the connected factory? We explore 4 key disruptions that address the challenges of adopting new tech below.

1. Call me nosy

As in every other industry, artificial intelligence (AI) and advanced analytics are all the rage. This is the underlying magic behind improvements in productivity, efficiency, and ultimately, a company’s bottom line.

With AI, manufacturers can start being proactive rather than reactive to disruptions in their processes. Companies like Canvass Analytics can layer AI overtop a manufacturer’s existing data and processes, making it possible to optimize processes and worker and machine productivity — fundamentally decreasing time to market, and boosting competitive advantage.

Of course, implementing AI comes with its own challenges. How do you start using AI? Humera Malik, Canvass’s founder and CEO asks her clients the following questions:

  1. What is your process?
  2. What are your metrics, cost, and quality checks for the process?
  3. What data are you collecting, and what are their influencing factors?
  4. What is the algorithm you follow for your process?
These trends are only impactful if the underlying processes and data collected are accurate and meaningful.

Of course, at the end of the day, it’s not enough to blanket your processes in AI and analytics. These trends are only impactful if the underlying processes and data collected are accurate and meaningful, and if you have the types of data you need. Which brings us to…

2. What’s my data

The thing that everyone gushes about: big data. Of course, most manufacturers have an abundance of data; the competitive advantage now is about ensuring the data is relevant, and being strategic about how you analyze and pull insights from data.

A big (pun intended) aspect of this is the use of data transparency and evidence in motivating productivity and asset management — specifically, in cyber-physical systems.

Crash course on cyber-physical systems — essentially, this means connecting computers to processes without human intervention. It includes things like your QR code scanners, or radio-frequency identification (RFID); bluetooth, or wireless sensor networks (WSN); and systems akin to indoor GPS’s, called real-time location systems (RTLS).

Experiments combining these technologies have married the best of different worlds. Peytec’s technology, for example, brings together GPS localization and sensor technology in what Peyman Moeini, founder and CEO of Peytec, calls a Wireless Positioning and Sensing Network (WPSN). Multiple sensors and tracking technologies are combined in one tag, allowing for more data that’s actually meaningful.

3. Agile is in

Now, cleaning up data is important, but so is cleaning up processes critical to your production line. And often, for manufacturers, this means the actual equipment and hardware.

With the rise of the digital era, comes new efficiencies for digital-to-physical transfer. Long-gone are the days of detailed, slow product development. Agile/SCRUM/Kaizen is in, and the lean startup approach has been brought into everything — including classic hardware manufacturing.

The lean startup approach has been brought into everything — including classic hardware manufacturing.

It’s time for design automation to shine, and companies like Vention have been able to shorten months-long design cycles into mere days — three, in Vention’s case. Vention allows quick and easy, iterative hardware development—that is, the “agile” for hardware.

In today’s day and age, where companies are collapsing left and right under the pressure of constantly pushing out new, innovative products, natural selection favours those that can keep up. And as Mathieu Provencher, COO/CFO of Vention says — for physical and hardware manufacturers, this means shrinking the design cycle period if they hope to maintain a competitive edge.

4. IoT couples counselling

Now that you have the data and your processes, it’s time to feed data into your processes to optimize your production line. But your data is siloed, in different formats, and don’t match up. How do you address your fragmented data and mitigate inconsistencies?

To effectively leverage the benefits of connected systems, your data and processes have to communicate effectively together. And second only to couples therapy, companies like Litmus Automation that offer system integrations have become top-of-mind in driving efficiency. Specifically, as John Younes, COO/Co-founder, says, Litmus is able to collect and manage data across all their vendors and create multiple applications and workflows — all while adhering to compliance standards and cybersecurity needs.

Integrated platforms are the first step to a truly connected factory.

Integrated platforms are the first step to a truly connected factory — one that identifies its own flaws, and optimizes itself. A real dream for the manufacturing futurist.

Uber is coming.

The Uber of manufacturing is coming, and you bet it’s Fast & Furious (and just as predictable). Just as Uber came for taxis, the next Uber of manufacturing is on its way — and maybe it’s even Uber itself. The industry is becoming demand- and usage-based. Question is — who’s ready to bear the onslaught?

A word of caution

It’s easy to jump on the first venture-backed startup that pitches a magic pill to fix one of your machines. And for startups, it’s easy to narrow your focus to one machine, to one symptom.

Both of you, please don’t.

As Sight Machine CEO Jon Sobel states in a Wharton interview, with the hundreds of factories in companies, and the (likely) thousands lined up in supply chain, just curing symptoms or one type of problem is simply un-economical. Henceforth, success for both startups and manufacturers will be scale — creating and employing solutions that offer enterprise-level results and insights across the supply chain. How forward-thinking.

But of course, keeping in mind the obstacles between a factory’s path to becoming smart, an overarching theme arises.

Start small to go big.

Bring the lean startup approach into your company. Design digital sprints. And test to see if theories translate to reality. In other words: start small, to go big.

That’s how the disrupted can use disruptions to, in turn, become disruptors themselves.

Tannya is a creator, operator, and founder (prev. @ Tiba Health) writing in-between startup life. You can find her at @MaRSDD running programs for entrepreneurs and diving into human behaviour & design, human potential, & startups/tech.

Thank you to the incredible speakers from the Cleantech Tech Disruptors event for contributing to some of these key insights.

The MaRS Tech Disruptor Series. MaRS Tech Disruptors series brings together visionary founders and thought leaders to educate attendees on emerging trends and topics critical to the success of many leading companies today. Our mission is to create a conversation across and between the industries at the heart of innovation. The goal: to help those being disrupted to become the disruptors and embrace change.

MaRS Cleantech. The Cleantech Venture Services team works with high-growth ventures that are addressing a range of complex global challenges — from improving energy storage, generation and distribution to defining the future of transportation. We help at every stage of growth — providing them with expert advice, connections to talent and capital, and access to global markets.