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Proving the Value and Achieving Measurable Outcomes From Your First Industry 4.0 Initiatives

Proving the Value and Achieving Measurable Outcomes From Your First Industry 4.0 Initiatives

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In specialty manufacturing operations, companies use various types of complex production machinery, such as blenders, centrifuges, tanks, pumps, extractors, motors, process controllers, and reactors. Systems that regulate temperature, the air quality, and other conditions are important in facilitating the environment required to perform quality manufacturing.

Some of these industrial assets are business-critical; without them, production would come to a halt or employee safety could no longer be maintained. They are also clearly connected to creating customer value. Consequences of their failure or poor performance might include late delivery to customers with resulting customer dissatisfaction and the risk of a competitive takeover of your accounts.

Solid metrics are in place, but information has a limited reach

Many specialty chemicals companies already closely monitor the performance of their industrial assets and the conditions in their production environments. Production and maintenance managers review asset data on machine terminals or download them to their devices to help them plan and improve maintenance and asset management. Companies use metrics such as Overall Equipment Effectiveness (OEE) and Overall Facilities Effectiveness (OFE) to minimize waste and improve the performance and business outcomes of their machinery and facilities.

Often, data gathered from industrial assets are available only to a small group of managers and planners responsible for maintenance, facilities, and production. Using machine histories and records for plants and production lines, they do their best to improve their processes, increase the productive contribution of the company’s investments in machinery, and ensure an industrial environment that keeps workers safe and supports the company’s quality standards.

For many chemical manufacturers, this approach may have worked well in the past. But when industry growth projections are low, margins are small, and global competition is fierce, it makes sense to seize any opportunity for improving an organization’s productivity and nimbleness. Using digital tools more effectively and strategically in managing your production machinery, facilities, and industrial assets can also serve as an effective proof-of-concept for Industry 4.0 in your operation.

Switching from history to the present

An Industry 4.0 practice would not draw primarily on historical data and past analyses of your industrial assets and facilities. Instead, you can use the sensors that may already be present on your machinery and building systems to gather live data and view them in real time. To avoid ongoing investments in increasingly large storage systems, you can save the data in the cloud, where subscription-based storage resources are scalable and where you can also use analytics and reporting solutions available on the same platform. You can connect your IoT data stores and analysis with the ERP system and the business processes it facilitates.

Manufacturers are effectively using condition monitoring on their industrial assets to transform maintenance from reactive to proactive mode. Reviewing the vibrations, sounds, temperature, flow throughput, and other phenomena associated with a machine, you can spot emerging trends that indicate a likely breakdown long before it happens. Your maintenance team can then make a correction and avoid unplanned downtime with its cost and productivity consequences.

You can also set up thresholds that connect to a notification mechanism in your ERP system. When a machine threatens to fail or its output diverges from the product standard, technicians will know immediately and can rush out to perform a repair. In the same way, you can enable facilities and production managers to act when dust, fumes, or other conditions are hazardous or detrimental to product quality.

Optimizing standard industry KPIs

If you track OEE, using IoT data in condition monitoring gives you the evidence to dig into the performance, uptime, and quality values that combine in the overall OEE score. For specialty chemical manufacturers, it will also be helpful to weigh these OEE components properly. Often, quality is paramount for them and any deviations are problematic, whereas throughput performance and uptime may not rank at the same level of urgency. If you calibrate the OEE formula to reflect your company’s production objectives, you will report more meaningful results and become more effective in improving OEE. Accomplishing that can greatly benefit your bottom line and boost the value you provide to customers. You would take similar steps to boost OFE values.

Extending the use of IoT condition monitoring

From production machinery and facilities, you can extend your IoT condition monitoring into logistics, especially when distribution involves specially designed vehicles, train cars, or containers, or hazardous materials subject to stringent regulation. Live data from these objects can tell you where a shipment is and what kind of environment surrounds your product or shipping container. You can track shipments through to customer delivery, maintain optimal environmental and quality standards, and also use the information to enable better use of equipment and resources. Many companies use IoT evidence from specialized vehicles to enhance operator training, improve fuel efficiency, and perform proactive maintenance.

A broader horizon of data-based collaborations

By sharing subsets of your production, facilities, and asset data from the IoT in secure cloud workspaces and opening these to some of your vendors, trading partners, and customers anywhere in the world, you can support a number of activities and goals within your Industry 4.0 strategy. For example, you can

  • negotiate production schedules and product quality standards with customers;
  • scope and prepare the outsourcing of part of your production process, then monitor the quality and performance of your subcontractor;
  • engage with the manufacturer of your machinery and equipment to improve engineering designs and OEE performance of business-critical machines;
  • work with logistics providers to improve capacity utilization and optimize shipping routes;
  • collaborate with utility companies to improve the energy efficiency of your production lines and facilities;
  • draw on the expertise of industry consultants to improve planning, deployment, and utilization of production machinery and the design of industrial facilities; and
  • provide auditors with evidence of your compliance and quality management results and processes.

On today’s leading cloud platforms, such as Microsoft Azure, you can subscribe to the ERP functionality, data processing and storage resources, IoT solutions, and analytical tools to enable these scenarios and see your Industry 4.0 efforts through to success. If you are satisfied with the results of your Industry 4.0 proof-of-concept projects, you can extend the initiative, for example by transforming customer relationships and digitizing products and services.


At Sikich, we have the industry and technology insight and solutions to help you shape your Industry 4.0 strategy and use the best current software solutions to get it underway. Sikich provides several free resources to help you move into your Industry 4.0 initiative. You can now download our whitepaper, Getting past Industry 4.0 hype to take advantage of transformative opportunities for creating value.

Chem Industry 4.0 white paper

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