The world has been talking about Industry 4.0 since 2012; The digital transformation is set to disrupt nearly every process across industry. However, many businesses are reluctant to take the next steps in transforming their manufacturing businesses into an advanced manufacturing business, and for good reason. The technology is disruptive to the processes these companies have been using for years and can be an expensive endeavor.
However, Tom Kelly, the CEO and executive director of Automation Alley, Michigan’s Industry 4.0 knowledge center, sees these changes beginning to occur across Michigan. Kelly, in conversation with Tony Uphoff in the latest episode of the Thomas Industry Update Podcast, says that digital transformation will be the key factor in keeping your manufacturing business relevant in the next era of industry.
"Advanced manufacturing is about the rapid change of the digitization of manufacturing,” he explains. "At Automation Alley we constantly focus on paying attention to what’s happening, [and how important it is to] get started, do something, and learn. [I’m] not saying to bet the farm on those technologies yet, but you better have a very good understanding of what’s coming and how you will maybe have to bet the farm in the future when the time is right.”
Bringing Digital Transformation Stateside
As a leader of the advanced manufacturing industry in Michigan, Kelly is a strong advocate for bringing many of our outsourced processes back into the U.S. and says that this could be achieved through our adoption of advanced manufacturing processes.
"If you want to be a player on the global stage, we have to pay attention in America,” Kelly says. "In Industry 4.0, all the things that it stands for, how do you accelerate innovation? How do you rapidly change? Those are America’s assets. So we need to understand that Industry 4.0 is how you actually unleash America’s potential back into manufacturing… The reality is we have to have that business, and it’s actually coming back to us in the path of innovation around Industry 4.0.”
This is especially important to Kelly because of Michigan’s massive impact on manufacturing in the U.S. He told Uphoff that 20-22% of Michigan’s GDP is tied to manufacturing, compared to 10-12% nationwide. Because of this, Kelly acknowledges that the state is having trouble overcoming the hurdles associated with a digital transformation.
"We believe, like you, that Industry 4.0 is a cultural problem, not a technology problem,” he explains. "Most people that rise through an organization and get to the top of the food chain got there by not taking a lot of risks and not failing anywhere. Big organizations are designed to weed out the people that are costing money and taking the risk and outsize risk. Yet in an Industry 4.0 world, you have to have a culture of learning.”
As a result, Automation Alley’s biggest initiative is changing the culture of manufacturing in Michigan, where the second industrial revolution originated. Kelly explains that this has created an especially rigid culture of resistance to change across Michigan businesses. He currently works to advise these businesses to change their ways and adopt Industry 4.0’s new culture of change and innovation.
"We advise CEOs of Tier Ones and Tier Twos to create a culture of learning. Have people in your organization who are allowed to think big, and then give them budgets to go fail,” he recommends. "Not to bet the farm on the production line yet or the products that are going to get pushed into the OEs, but to say, ‘I want you to go figure out all the ways that you can destroy our business.'”
Making Your Business an Advanced Manufacturing Business
Although changing your traditional practices can seem like a risk to your business, Kelly actually explains it’s quite the opposite — not staying with the times can cost you.
"We have to decouple and understand the risks of holding on to the way we’ve always done things, because the world is changing around us, and the rest of the world doesn’t necessarily have the assets tied to these older ways of doing things. We’re taking on great risk,” he says.
So where should your business start in adopting technology into its manufacturing processes? Sensors, according to Kelly.
"If you’re small, go buy a sensor” and incorporate it into a machine, Kelly says. "See what you learn about that machine. And see what takes you to the next step of ‘Okay, I got that data – so what could I do if I aggregated that data across multiple machines? Could I start creating a predictive analytics package? And if I’m collecting all this data, do I see any patterns? And would it make sense to bring AI in to start looking at those patterns so I don’t need a human looking at those patterns?’ And on and on and on,” he explains.
Step by step, you can move the data analysis and process optimization forward. "And all of a sudden, you find out you’ve gone 10 steps down the path. [The key is to] get started. Do something. And then say, ‘What did I learn?'”
According to Kelly, "There is no such thing as failure in Industry 4.0. It’s ‘What did I learn, and how do I apply it to my next test?'”
Changing Modern American Manufacturing
A significant part of Kelly’s job in modernizing American manufacturing lies in changing the American perception of the industry — modern manufacturing doesn’t align with the archaic vision of a dirty, dangerous factory anymore.
"When we were younger, at least for me, when you were coming up, people said, ‘Oh, don’t go into manufacturing. That’s dirty, dangerous, dull. You’ve got to go get a college degree, and you’ve got to go do something great,” he explains.
"Well, guess what? College degrees are meeting manufacturing; That’s what Industry 4.0 is. And everybody is going to have to be skilled to actually do this kind of manufacturing. It’s going to be a great career for people.”
