Industrial Transformation Blog

Building business cases is often the first of many challenges today’s industrial companies have to face as part of their Industrial Transformation (IX) programs. The ideal business case should help companies identify and prioritize the correct problems and provide a clear roadmap for the solution.

Quality 4.0 is a concept LNS Research first introduced in 2017, and it has been gaining momentum ever since. However, the concept has also picked up some misconceptions along the way. To clear up any confusion, we will redefine Quality 4.0 here and answer several key questions about its scope, value, and role in Industrial Transformation (IX).

Industrial Transformation (IX) is the proactive and coordinated approach to leveraging digital technologies to create step-change improvement across the value chain. IX is a key mechanism that Consumer Products and Goods/Food and Beverage (CPG/F&B) companies are using to address the changes rolling across their industry: pandemic driven demand fluctuations, worker shortages, increasing competition from local brands, new channels to the consumer, and ever-increasing use of contract manufacturers and copackers. Yet the industry is falling behind in IX and is paying the penalty in the form of sub-optimal financial performance compared to manufacturers more generally.

Industrie 4.0 is often referred to as the Renaissance of manufacturing. But many of us don’t realize how many parallels there really are between today’s Industrial Transformation (IX) programs and the Italian Renaissance period – a time famous for transitioning from the Middle Ages to modernity. In this blog post, we will describe three such parallels and explore how today’s manufacturing leaders can apply them in their IX programs.  

LNS Research has defined Industrial Transformation (IX) as the proactive and coordinated approach in leveraging digital technologies to create step-change improvement across the value chain. By definition, we are contrasting IX from such Continuous Improvement (CI) programs as Lean or World Class Manufacturing (WCM) by its focus on step-change. Further, we consistently note that IX is particularly challenging as solutions must be deployed across a manufacturing network that is diversified by manufacturing models, culture, Operational Technology (OT), and digital maturity.

Industrial Transformation (IX) is the proactive and coordinated approach in leveraging digital technologies to create step-change improvement in industrial operations. Industrial Transformation has become a very real phenomena across industrial operations. More than two thirds of companies surveyed have implemented, are currently implementing, or plan to implement an Industrial Transformation (IX) program. The worldwide COVID pandemic is not slowing IX down with 78% of companies maintaining or accelerating their programs in the face of the economic turmoil created by the pandemic. IX Leaders are three times more likely to be increasing their IX budget in face of the pandemic.

Recently, I noticed an interesting data point from our Analytics That Matter research survey: 58% of surveyed companies claimed to be implementing or piloting an analytics program, but only 11% are seeing dramatic business impacts. The reason? I believe that while these programs are often led by the right vision, most of them aren’t necessarily supported by the required execution.

LNS Research has long followed the major automation vendors. All are either current LNS Research members or have been in the last few years. Recent developments have prompted us to take a closer look at their strategies, what’s happening, and why. We refer to mergers, acquisitions, partnerships, and entering new markets or strengthening positions in certain industry verticals as recent developments. These "giants" are waking up to new challenges as they seek to grow their businesses.

In our last blog on Operational Excellence, we defined OE 4.0 as “sustainable value creation through a holistic approach, supported by an enabling execution platform.” We said that with OE 4.0, we shift away from safety, compliance, and Continuous Improvement (CI) to comprehensive risk management, moving beyond mere EHS & PSM compliance to a proactive, integrated operations system. Of course, we don’t leave CI behind as incremental progress is always welcome, but OE 4.0 seeks a permanent and continuing step-change in performance.

Quality management has been one of the earliest areas of research for us here at LNS Research, and we have been closely monitoring the space for several years now. Our recent research on Quality 4.0 Readiness shows that Quality 4.0 programs have been gaining steady momentum and have become an important piece of the Industrial Transformation puzzle today’s manufacturing companies are trying to solve; so much so that the Quality 4.0 adoption rate has jumped from 16% to 27% in just two years.