At a glance
Industry 4.0 is indispensable for SMEs, but implementation involves many hurdles. A modern ERP system forms the central basis for introducing digital processes step by step rather than in a risky big bang. This allows initial successes to be realized quickly, costs to be reduced and competitiveness to be secured in the long term.
A study by management and technology consultancy BearingPoint shows that Industry 4.0 continues to be of great importance for the manufacturing industry in Germany. Over 81% of the companies surveyed plan to invest in digitalization in the coming years (as of January 2024). So those who don’t get on board now will soon be bringing up the rear.
However, the digital transformation poses a huge challenge for many SMEs. A shortage of skilled workers, a lack of financial resources and the complexity of the topic make it difficult to get started. We have therefore taken a look at how a suitable ERP system can pave your way to Industry 4.0. And give you tips on how to successfully master the mammoth task step by step.
What does Industry 4.0 mean?
The term Industry 4.0 describes the end-to-end digitalization of industrial production. The focus is on the intelligent networking and self-control of machines and production systems with the help of future-oriented
Today, however, digitalization is no longer limited to the area of production. Rather, digital technologies are currently being used in all areas of the company and along the entire supply chain. They are driving the development of innovative business models and paving the way for new service offerings. This is why we now talk less about Industry 4.0 and more about digital transformation.
The ERP system: the key to the smart factory
A goal that is often mentioned in connection with Industry 4.0: The so-called smart factory. This intelligent factory refers to a digitally networked production process that enables flexible and responsive manufacturing of individualized products at the cost of mass production. With the help of automation, data analysis and real-time communication, the smart factory monitors and optimizes its processes independently.
The ERP system plays a key role in the realization of this autonomous factory of the future. It has two important functions:
1. the ERP system as a data hub
The smart factory can only make independent decisions and control objects if sufficient data is available. And lots of data – big data to be precise. A suitable IT landscape is required to integrate this data, with a suitable ERP system at its center. As a central data hub, the ERP solution provides the necessary infrastructure to integrate data, automate processes and network innovative technologies.
2. the ERP system as a central communication node
In a smart factory, machines and production systems exchange information with each other in order to automatically process a production order. The prerequisite for such smart communication is the
Stephan Grieß, Asseco Solutions
Industry 4.0 may be intimidating when viewed as a complete package – but each section is feasible in its own right.
No smart factory without smart ERP functions
A modern ERP software solution is therefore a basic prerequisite for a successful start in Industry 4.0. It also offers other functions that are of key importance for the digital transformation:
- Real-time analysis
ERP systems record and process data from production machines, sensors and other sources in real time. They are able to evaluate and interpret large volumes of data using analysis tools and present them clearly in dashboards. - Automation
Modern ERP systems automate routine tasks such as processing order documents or managing stock levels. They also create flexible, user-defined workflows that adapt to changing business requirements. - Artificial intelligence (AI)
AI-supported ERP systems make predictions based on historical data and trends – for example, about future demand and the required stock levels. Machine learning enables the automated optimization and continuous adaptation of work processes. - Mobile ERP
Ideally, ERP systems can be used on mobile devices such as smartphones and tablets so that decisions can be made in real time even when on the move . A user-friendly design facilitates access to complex data and processes. - Collaboration and communication functions
ERP software supports collaboration between departments through shared data platforms and tools. As all data is stored in a central location, teams can work together on projects. - Security functions
Strong security functions that protect sensitive company data are essential. These include effective authorization management, secure data encryption and multi-level authentication. ERP systems also support companies in complying with legal regulations.
The theory is all well and good. But what measures can you take to break through the wall to the smart factory in practice? Our tip: Start with small steps instead of pulling the project off as a big bang. The following areas of application are ideal for getting started:
Get started: 3 application examples to get you started
1. smart manufacturing: precise control of production processes
In the smart factory, machines and production systems are connected to each other via the Internet of Things (IoT) and communicate with each other constantly. This allows information to be collected and exchanged in real time so that production and delivery processes can be precisely controlled and monitored. If delivery failures occur or an unexpectedly large number of orders arrive, you can react immediately.
Networking also enables the automation of replenishment control. The system automatically recognizes when components or materials are running low and reorders them in good time without the manual intervention of a person.
Practical tip:
Smart manufacturing is only possible if you have previously equipped your warehouse with sensors. These sensors measure the actual stock level and pass it on to the ERP system in real time. For example, a crate filled with screws could autonomously measure the current fill level. Or a shelf could use RFID communication to report how many spare parts are on it.
You don’t even have to extensively adapt the functionality of the ERP software. What you need to change is not the ERP system itself, but the way in which information enters the system – namely via sensors instead of manual input.
Most ERP systems can manage stock levels as standard and raise the alarm when materials are about to run out. Depending on the interfaces and configuration, the software can even automatically reorder materials. However, ERP-supported inventory management is still based on the offsetting of purchasing and consumption, not on actual stock levels. In practice, this is not necessarily realistic, as unplanned shrinkage can always occur.
The advantages of smart manufacturing
- Flexible adaptation of production and logistics processes
- Finding solutions quickly, for example by increasing the production volume
- Increasing efficiency through automation
- Cost reduction through optimized use of resources and less downtime
2. predictive maintenance: predictive maintenance
If you equip your machines and production systems with sensors, you can measure performance and wear in real time. All parameters that influence the condition of a machine are important here – such as the ambient temperature, vibrations and operating hours. By analyzing the collected data, you can predict an impending malfunction and calculate the optimal time for the next maintenance with relative accuracy.
Practical tip:
Thanks to predictive maintenance, you can, for example, replace a wearing part on a welding robot before it fails and brings production to a standstill. In addition, you do not have to adhere to unrealistically specified maintenance intervals, but simply carry out maintenance as required.
In contrast to smart manufacturing, however, predictive maintenance is somewhat more complex to implement. In addition to the sensors, you need a cloud-based IT infrastructure that collects the measured data and analyzes it using algorithms.
The advantages of predictive maintenance
- Reduction of maintenance and production costs
- Avoiding downtime and increasing productivity
- Extended service life of machines thanks to early reaction to signs of wear and tear
- More efficient use of resources
3. supply chain management: optimization of supply chains
Thanks to intelligent networking, the smart factory offers transparent processes across the entire supply chain and is in a state of constant self-monitoring. This allows companies to monitor suppliers, stocks and orders in real time. Transport routes, warehouse processes and distribution networks can also be optimized. Bottlenecks and production downtimes are a thing of the past, as is the inefficient planning of transportation.
Practical tip:
Real-time monitoring of goods, objects and delivery vehicles plays a major role in ensuring a smooth supply chain. You can achieve this through Asset trackingRemote monitoring systems track and localize objects equipped with QR codes or IoT sensors based on mobile radio standards and GPS data.
Devices equipped with eSIMs send information that can be accessed via the cloud. Geofencing zones make it easy to prevent theft or the general loss of items. IoT-supported asset tracking can therefore help you to use your capacities more efficiently, improve operating processes and always maintain an overview of your smart factory. This ensures seamless processes along the entire supply chain.
The advantages of supply chain management
- Early detection of disruptions along the supply chain
- Cost reduction through better coordination between suppliers and manufacturers
- Efficient planning thanks to the constant availability of status information
- Simple monitoring of compliance requirements
Conclusion
Industry 4.0 may be intimidating when viewed as a complete package – but each section is feasible in its own right. It is best to approach the digital transformation slowly. You can already use your ERP system today to implement parts of Industry 4.0 and celebrate your first successes.
By gradually implementing digital processes, you gradually increase the efficiency, flexibility and sustainability of your company. You create the basis for future-proof production that can react
