Customer connection missing as manufacturers yet to produce rewards from Industry 4.0

Manufacturers are yet to use Industry 4.0 operating principles such as interoperability, transparency and decentralization to get closer to customers, suppliers and distributors, according to a new Oracle study.

The survey of 700 business leaders from manufacturing companies across the UK, France, Germany, Netherlands, Switzerland, China and the UAE found just a third of manufacturers have used Industry 4.0 technologies to remove all data siloes from across the value chain, while only 40 percent have an open exchange of data with suppliers and distributors. For decision-making processes, less than half have integrated customer data and only 45 percent have integrated supplier and distributor data.

Although the majority of manufacturers worldwide have invested in Industry 4.0-led programs, only 17 percent 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 percent 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 Industry 4.0, but there's clearly a long way to go before investments begin to have the 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. 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 with the research showing similar results there as well. In fact, only 34 percent of Chinese manufacturers had integrated end user and customer data into their decision making, which is lower than the global average (43 percent). However, more than half (53 percent) admitted it was an area where they needed to improve – again, against 43 percent globally.

In fact, when it came to next steps for 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 percent acknowledged they needed to create a more open exchange of data with suppliers and distributors.

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