Customer Connection Missing as Manufacturers Yet to Produce Rewards From Industry 4.0

Manufacturers are yet to use Industry 4.0 operating principles to get closer to customers, suppliers and distributors, reveals a new study from Oracle.

The research showed just over a third of manufacturers have used Industry 4.0 technology to remove all data siloes from across their value chain, while only 40% have an open exchange of data with suppliers and distributors. For decision making processes, less than half, have integrated customer data and just 45% have integrated supplier and distributor data.

Although the majority of manufacturers worldwide have invested in Industry 4.0-led programmes, only 17% have transformed their business models as a result, with only a quarter of manufacturers gaining greater visibility into how customers purchase and use their products. Just over half, meanwhile, are using customer data to inform the design and manufacture of new products.

The research did show encouraging initial results from manufacturers that have created an internal digital thread within their own organisation, with 82% of those who had integrated data internally seeing a benefit from it.

John Barcus, Vice President, Manufacturing Industries at Oracle, said: “It’s good to see manufacturers reaping some rewards from their Industry 4.0-led programmes, but there’s clearly a long way to go before their investments begin to have the disruptive and transformative impact they promise. Removing siloes internally is a good start but that digital thread has yet to extend outside the organisation and throughout the value chain. That is when real business transformation will take hold. Using interoperable and interconnected cloud-based systems is the easiest way manufacturers can securely integrate supplier and distributor data and make better use of customer and sensor data to manage the impact of disruptive forces.”.

Promisingly for European manufacturers, the survey showed their Industry 4.0 gains are on a par with their Chinese counterparts, the research showed results to be relatively flat. In fact, only 34% of Chinese manufacturers had integrated end user and customer data into their decision-making – lower than the global average of 43%. However, more than half (53%) admitted it was an area where they needed to improve – again, against 43% globally.

In fact, overall, when it came to next steps for their Industry 4.0 implementations, manufacturers ranked customer-facing operations as the most crucial place for change within the next three years. Half said they would be focusing on removing data siloes and 47% acknowledged they needed to create a more open exchange of data with suppliers and distributors.

To learn more about the research and Oracle’s Manufacturing SaaS solutions, including the recently announced Oracle Adaptive Intelligent Applications for Manufacturing, visit: https://www.oracle.com/uk/applications/manufacturing.html