The Fourth Industrial Revolution—Industry 4.0—calls into question the very definition of manufacturing, blurring the lines between tangible and intangible, digital and physical, product and service. At its core, Industry 4.0 redefines how manufacturers derive and deliver value.
Industrial innovations today are less about products, materials and equipment, and increasingly about the integration of human, machine and data. Enabled by data analytics, unlimited storage, decentralized computing power and Internet connectivity, manufacturers have the potential to transform into connected, customer-centric organizations capable of developing highly customizable products safer and more efficiently, and delivering them faster and at lower cost. And as manufacturing is digitized, a whole new universe of production data opens up endless possibilities for monetization—new services, platforms and payment models.
According to BDO’s 2019 Middle Market Industry 4.0 Benchmarking Survey, 99 percent of middle market manufacturing executives today are at least moderately familiar with Industry 4.0. Yet, despite all its potential to create value, only 5 percent are currently implementing—or have implemented—an Industry 4.0 strategy.
Industry 4.0 comes with a jumbled mix of lofty concepts and flashy technologies that confuse rather than illuminate the opportunity. But underlying the buzzwords are real-world applications offering significant ROI.
Because their resources are finite, middle market manufacturers have to be prudent in their Industry 4.0 investments. The possibilities of tomorrow must be tethered to concrete goals and a clear sense of purpose. And the middle market has a limited window of time before the technology enablers underpinning Industry 4.0 become essential to competing in an ever-advancing digital world. They must master the art of balancing quick wins with longer-term, strategic investments.
The 2019 BDO Middle Market Industry 4.0 Benchmarking Survey was conducted by Market Measurement, Inc., an independent market research consulting firm. The survey included 230 executives at U.S. manufacturing companies with annual revenues between $200 million and $3 billion, and was conducted in November and December of 2018.