In today’s post we’ll look at some of the Industry 4.0 challenges and risks presented by adopting it, to contrast with the benefits that we looked at in part two. Before adopting any strategy in this area, you should understand these challenges and see how they apply to your own business. 

Cost of Industry 4.0 Adoption

In part two we made the case that Industry 4.0 adoption will lead to lower costs over time and observed that the return on investment time for adopters was decreasing. Neither of these points eliminate the very real cost impact of adoption. There are significant costs, from replacing equipment with modern IoT connected options, to reskilling a workforce to operate these modern digital solutions, to cloud computing costs and so on. All these costs of execution need to be weighed against the projected cost savings achieved after adoption. 

Cybersecurity

Industrial IoT solutions and the introduction of cloud computing into the modern factory of necessity means that companies must increase their focus on cybersecurity. With that many more points of contact with the outside world come that many more possible vulnerabilities that can be exploited by bad actors. Additionally, your workforce will need training in anti-fraud and proactive cybersecurity measures to avoid the possibility of accidental exposure from within.

Data Privacy & Industry 4.0

Related to cybersecurity is the issue of data privacy and security. Ensuring that data is safely and securely stored, and encrypted, if necessary, is integral to protecting personally identifiable information, confidential company and trade secrets, etc. The standards for data security are high and vary in different markets so it’s important to be aware of them. Ransomware attacks are now a commonplace occurrence, and every company must ensure that their approach to data and cybersecurity is extremely robust. 

Workforce Impacts of Industry 4.0 Adoption

Another consideration is the impact on your workforce. Can your workforce adjust to the more modern manufacturing experience you bring in? How will they react to change? Will they require training, as we’ve already noted under the cost challenge? Whose role might be replaced by automating aspects of your current factory? What new roles might you be creating? Is there enough available skilled workforce to take on these new roles? There are a lot of things to consider here.  

Legacy Systems 

In the manufacturing sector, by way of example, many factories are running with 10-, 20-, even 30-year-old software systems. Some of these are off the shelf products, many of them are custom solutions. In adopting Industry 4.0 many, if not all, of these systems will need to be replaced or rebuilt. This means looking at a build/buy strategy. Are there new systems you can buy to replace the old? Do you need to invest in IT solutions to modernize the software you are running in your factory? (Hint: the answer is yes!)  

The list above is again not meant to be complete, there are many other factors that could be considered. The point is to take an eyes wide open approach and understand the trade-offs you’ll be making. 

Next time, we’ll take a general look at the key components of Industry 4.0, before we have a look at some specific Microsoft-based solutions in part five. Improving Winnipeg has a proven track record of application modernization success, so if legacy system replacement is your greatest challenge, let us be your partner in solving it.  

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