Industry 4.0, 5.0 Necessary to Build Future-Proof Businesses

“We’d rather buy another robot. I’m only here for two more years; let the next manager worry about it. We just don’t have enough people for that.”

These are just a few of the typical excuses offered up to explain why long-overdue digital transformation projects get delayed. The smaller the company, the more crucial the leadership’s role is in making them happen.

Large companies have the capital to push innovation-focused investments through no matter what; however, in the case of SMEs, it takes an owner’s total commitment, explains István Nadj, CEO of CAD-Terv Kft. It is the digitization of development processes that must be dealt with first, he explains.

“Development makes up just 10% of the total costs, and the cost of failure grows exponentially if errors are not eliminated in the development phase,” Nadj says. Therefore, a whole new mindset is needed when embracing digital solutions in manufacturing.

“It must be clear from the outset that you don’t want to have Industry 4.0 just because that’s what all the headlines are all about, but because you would like to build a robust future-proof business,” he insists.

Currently, a bunch of factors hinder small businesses in that effort. Silo-structured systems, separate databases, individual processes, and a lack of standards undermine efficiency. Another problem is that people mix the meanings of ‘electronic’ and ‘digital.’

“When data is entered just once in one given database, and all the rest is generated from that database in an automated manner, that’s what’s key,” Nadj notes, giving the example of a boarding card. A digital one gets automatically updated on your cell, but a printed copy, albeit originally produced electronically, won’t.

Zsolt Molnár, senior consultant of GraphIT Kft.

Saving Development Time

One of CAD-Terv’s popular 3DExperience platform solutions, automated inventories, illustrates even more the ultimate advantages of digitization. Once data is entered, the 3D version contains everything, and digital engineers can focus solely on development.

The importance of development time can’t be emphasized enough. Shockingly, on average, less than half (48%) of development time is spent on innovation; the rest goes on non-value-added work and other mechanic data processing tasks.

This underlines the use cases of programs that, for example, automatically collect tolerance figures from manufacturing design. The relevant data in the 3D design is thus converted into an Excel format.

“Continental ordered it from us, and they just love it,” Nadj notes. Audi is another client of CAD-Terv that also needed some productivity enhancement. Its customized automated pneumatic planning solution cuts development time by up to 60%. Development time is just the tip of the iceberg, though. Corporate standards, automation, quality, IP protection and a dedicated workforce are all part of the equation.

“It is beyond any doubt that executives must set clear goals and be open to embracing bottom-to-top initiatives and engaging employees. A new mindset and full commitment are ‘must-have’ things to get the most out of what Industry 4.0 can offer,” Nadj concludes.

Zsolt Molnár, senior consultant of GraphIT Kft., emphasizes digital twins. “Collecting production data alone won’t cut it anymore,” he says.

Digital Twin

The problem is that by the time you gather enough data, production has often changed, and that data is now useless. That’s when a digital twin comes into the picture. “

We build them, which allows you to run the manufacturing data of multiple years in a matter of days,” he explains. “If production changes, the digital twin can be updated accordingly. As long as that digital twin doesn’t exist, though, our hands are tied. This paves the way for simulation, a ‘must-have’ feature for long-term development.”

Companies claim how unique they are all the time, but, in truth, they are not, at least not in terms of processes. In some instances, however, sector-specific adjustments do need to be made. Take salami making, for example, where products must be packaged within half an hour.

“The Siemens software that we rely on was developed for automotive; yet, disassembly can be used as an analogy for chopping up meat at a slaughterhouse, so inventories can be created similarly,” Molnár says, giving an extraordinary example.

Intelligent production timing plays an ever-increasing role, too. The idea is to determine how to deliver the most orders to the greatest effect. It is an area where AI comes in very handy. It can tell you to what extent the penalty on late delivery to “Customer A” would be offset by the profits from another order to “Customer B” if the latter were fulfilled first. Bicycle manufacturers, for example, can use AI-driven predictions to work out when any given customer-picked configuration would be ready.

Molnár also believes that charismatic and purposeful leadership can help SMEs embrace Industry 4.0 tremendously.

“The entry threshold is low; nowadays, subscription plans enable you to access state-of-the-art tech easily,” he says. He cites the example of a 30-person packaging company where design and production planning can take place seamlessly thanks to cost-effective so-called low code solutions.

“When Industry 4.0 was invented, it was designed to reduce the number of humans in the factory to the minimum. Industry 5.0 should be more human-centric. It won’t just mean a carefree collaboration with machines. It will be much more about custom-making ever more products, which will require human engagement. People are going to pay for this hand-made customization; that’s what will make the whole thing human,” Molnár concludes.

This article was first published in the Budapest Business Journal print issue of February 23, 2024.