Europe Still Skeptical of Industry 4.0
A large majority of European manufacturers – but not those in Russia – are adopting some form of Industry 4.0 technology, yet many believe these technologies will increase both up-front and ongoing maintenance costs, according to a study by Shell.
Industry 4.0 refers to the current global trend of revolutionizing manufacturing through adoption of technologies such as digitalization and automation. The term originated in 2011 with the German strategic initiative Industrie 4.0, an effort to establish the country as a leader in advanced manufacturing, but it quickly grew to a global movement.
Industry 4.0 technologies range from cloud-based computing – which accesses applications, services or resources through the internet rather than a company’s own server – to robotics, autonomous vehicles, artificial intelligence and connected technologies, which allow data to be exchanged between products and systems.
The survey received responses from 451 lubricant decision-makers working in general manufacturing. There were 50 participants in each of Germany, Russia, the United Kingdom, France, Italy, Spain, the Netherlands and Turkey, plus 51 in Poland.
Seventy-nine percent of those surveyed are currently using at least one Industry 4.0 technology, reported Shell. Turkey had the highest number – 96 percent – followed by Italy, Poland, and the U.K. at 94 percent and France at 92 percent. Spain and Germany were next with 86 percent and 84 percent respectively, and Russia was far behind at 18 percent.
Seventy percent of respondent companies said they are using Industry 4.0 technologies to keep up with equipment maintenance. “When used for equipment maintenance, companies believe Industry 4.0 technologies play an important role in reducing breakdowns and enabling a smarter maintenance strategy,” Shell added.
Fifty-four percent of companies opined that using these technologies for maintenance leads to fewer equipment breakdowns, 48 percent said they provide immediate notifications of equipment breakdowns and 46 percent expect notifications of issues will be sent before equipment breakdowns.
Sensor-based and cloud-based technologies were the most popular – employed by 42 percent and 34 percent of respondents, respectively. Self-operating equipment was the next most popular category at 30 percent, followed by connected equipment (28 percent), robotics (24 percent) and artificial intelligence or machine learnings (19 percent).
“Eighty-one percent say their company could save money by incorporating Industry 4.0 technologies,” Shell stated in its report, including 98 percent of respondents in Turkey, 96 percent in the U.K. and 94 percent in France.
Although few Russian respondents are using them, 54 percent said they believe Industry 4.0 technologies could save their company money. Despite their high adoption rate, companies in the Netherlands reported the lowest confidence – just 40 percent – that the technologies could deliver cost savings.
When asked to “rank the top three most important factors that would be taken into account if your company was to consider purchasing Industry 4.0 technologies,” 51 percent said increases in productivity, 41 percent said reduction in maintenance costs and 40 percent said improvements in the quality of finished products. Following closely behind was reduction in equipment operating costs (38 percent), expected improvements in equipment reliability (38 percent) and the upfront price of the technology (36 percent).
Despite the anticipated savings and other benefits – such as operational efficiencies or product quality improvements – approximately 71 percent of European manufacturers are still concerned about potential increases to the total cost of ownership. Total cost of ownership refers to the estimate of all direct and indirect costs involved with acquiring and operating the equipment.
Sixty percent believe more up-front investment will be required, 41 percent think there will be higher maintenance costs, and 30 percent anticipate more unplanned breakdowns from implementing Industry 4.0 technologies.
Other barriers to the implementation of Industry 4.0 technologies include a perceived lack of trusted third party experts to provide support (57 percent), a lack of understanding on the part of senior managers about the benefits brought on by the technology (55 percent), a lack of understanding about how the technologies work (55 percent) and difficulty training workers in new skills to enable them to run the new technologies (54 percent).
As is true of most machinery, Shell said that equipment used with 4.0 technologies – at least those that require lubrication – need adequate products and effective maintenance schemes to operate properly.