Maturity and Readiness Model for Industry 4.0 Strategy

Abstract

Companies that transform their businesses and operations regarding to Industry 4.0 principles face complex processes and high budgets due to dependent technologies that effect process inputs and outputs. In addition, since Industry 4.0 transformation creates a change in a business manner and value proposition , it becomes highly important concept that requires support of top management for the projects and investments. Therefore, it requires a broad perspective on the company’s strategy, organization, operations and products. So, the maturity model is suitable for companies planning to transform their businesses and operations for Industry 4.0. It is a very important technique for Industry 4.0 in terms of companies seeking for assessing their processes, products and organizations and understanding their maturity level. In this chapter, existing maturity models for Industry 4.0 transformation are reviewed and a new Industry 4.0 maturity model is proposed.

Appendix: Survey Questionnaire

Smart Products and Services

Principles	Technologies
Real time data management (Collection/Processing/Analysis/Inference) Interoperability Decentralized Service oriented	Data analytics and Artificial intelligence Embedded systems Communication and Networking Cybersecurity Sensors and Actuators Cloud RFID and RTLS Technologies

Questionnaire

1. Which functions can your company’s products fulfill the following options?

Communicating with other products/platforms, machines and external systems

Collecting data from environment and other systems

Keeping the data they collect on their system or in the cloud

Having a platform on which the product or cloud applications are working

2. What stages of the data analysis can the product perform? (Porter and Heppelmann 2015)

Descriptive—Capture products’ condition, environment and operation

Diagnostic—Examine the causes of reduced product performance or failure

Predictive—Detect patterns that signal impending events

Prescriptive—Identify measures to improve outcomes or correct problems

3. To what extent can products be tracked throughout their lifecycle? (The University of Warwick Maturity Model)

No or limited product tracking

Products can be tracked as they move between manufacturing and internal distribution sites

Products can be tracked through manufacturing and distribution until they reach the customers DC

Products can be tracked along their complete lifecycle

4. Who do you offer service/insights for according to the user data obtained from the product?

None

Business

Customers

Partners

Smart Business Processes

Production, Logistics and Procurement

Principles	Technologies
Real time data management (Collection/Processing/Analysis/Inference) Interoperability Virtualization Decentralized Agility Integrated business processes	Data analytics and Artificial Intelligence Adaptive robotics Simulation Communication and Networking Cybersecurity Additive manufacturing Virtualization technologies Sensors and Actuators Cloud RFID and RTLS Technologies Mobile Technologies

Questionnaire

1. Which of the following systems do you use? Does the system have an interface to the leading system? (Lichtblau et al. 2015)

	Interface to leading system
	No	Yes
MES—manufacturing execution system
ERP—enterprise resource planning
PDM—product data management
PPS—production planning system
PDA—production data acquisition
MDC—machine data collection
CAD—computer-aided design
SCM—supply chain management

2. To what extent is the current supply chain integrated? (The University of Warwick Maturity Model)

Ad hoc reactive communication with suppliers and customers

Basic communication and data sharing where required with suppliers and customers

Data transfer between key strategic suppliers/customers (for example customer inventory levels)

Fully integrated systems with suppliers/customers for appropriate processes (for example real time integrated planning)

3. To what extent are the production equipment and systems automated?

Machine level: Partial

Machine level: Exact (Loading/Unloading + Operation)

Production line/cell level: Partial

Production line/cell level: Exact (Loading/Unloading + Operation +Transportation)

Factory level: Partial

4. Express the level of personalization in production.

Low—10,000 + batch size

Medium

High—1 batch size

5. Which data about your machinery, processes, and products as well as malfunctions and their causes is collected during production, and how is it collected? (Lichtblau et al. 2015)

	Manually	Automatically
Inventory data
Manufacturing throughput times
Equipment capacity utilization
Production residues
Error quota
Employee utilization
Data on remaining processing
Overall equipment effectiveness (OEE)
Other:

6. How is the data you collect used in production? (Lichtblau et al. 2015)

Predictive maintenance

Optimization of logistics and production processes

Creation of transparency across production process

Quality management

Automatic production control through use of real-time data

Optimization of resource consumption (material, energy)

Other:

7. How is the data you collect used in logistics and procurement? (Schreiber et al. 2016)

Predictive supplier risk management (to detect supplier failures early on)

Digital supplier scorecards, objectives and improvement tracking.

Automated tracking of target achievement and bonus payments

Digital claim management system with integrated automatic warning system

Big data analytics to detect new suppliers globally

8. To what extent does your supply chain an end-to-end visibility? (The University of Warwick Maturity Model)

No integration with suppliers or customers

Site location, capacity, inventory and operations are visible between first tier suppliers and customers

Site location, capacity, inventory and operations are visible throughout supply chain

Site location, capacity, inventory and operations are visible in real time throughout supply chain and used for monitoring and optimization

9. What is the level of real-time traceability of the operation in the digital environment? (Digital-twin concept)

None
Machine level
Production line/cell level
Factory level

10. What is the use level of technologies in production, logistics and procurement?

	Mobile and virtual technologies	3D Printers	Adaptive and collaborative robots
None
Low
Medium
High

Smart Business Processes

R&D— Product Development

Principles	Technologies
Real time data management (Collection/Processing/Analysis/Inference) Virtualization Agility	Data analytics and Artificial intelligence simulation communication and Networking Cybersecurity additive manufacturing virtualization technologies cloud RFID and RTLS technologies

Questionnaire

1. To what extent are the manufacturability and terms of use of the product simulated during product development?

None

Low

Medium

High

2. To what extent is the data obtained from the product used in the new product development?

None

Low

Medium

High

3. Do you use 3D printers in the production/prototyping processes?

No

Yes

4. Is product design information automatically transferred with the CAD/CAM systems to the machine?

No

Yes

5. Can your customers customize your products before production according to their preferences?

No

Yes

Smart Business Processes

After Sales Services

Principles	Technologies
Real time data management (Collection/Processing/Analysis/Inference) Virtualization Agility Service oriented	Data analytics and Artificial intelligence Embedded systems Communication and Networking Cybersecurity Virtualization technologies Cloud RFID and RTLS technologies Mobile technologies

Questionnaire

1. How do you benefit from data you collect in after-sales services?

Early detection of product quality issues and focused recalls

Improved product design

Advanced supplier recovery

Optimized spare parts planning

Minimized suspect and fraudulent claims

Reduced “remorse returns” and no trouble found rates

Increased reserves forecast accuracy

Enhanced service quality and service information

Intensified customer intimacy and next best action

2. Which services do you provide by using data analytics and other technologies in after-sales services?

Remote maintenance

Assistance with problems or faults in real time

IT-assisted claim management

Order management (CRM, order history, delivery tracking, etc.)

Display of product history

Delivery forecast

3. Do you utilize from digital technologies (mobile and virtualization technologies) in after-sales service processes?

No

Yes

Smart Business Processes

Pricing/Promotion

Principles	Technologies
Real time data management (Collection/Processing/Analysis/Inference) Decentralized Service oriented Integrated business processes	Data analytics and Artificial intelligence Communication and Networking Cybersecurity Cloud

Questionnaire

1. Which of the following studies are conducted within customer analytics?

Customer segmentation

Customer lifetime value

Cross selling

Campaign management

Market basket analysis/product bundling

Product recommendation

Customer churn analysis

Product portfolio management

2. Do you utilize from data obtained from environment/other platforms in product pricing or dynamic pricing?

	Product pricing	Dynamic pricing
No
Yes

3. Do you generate new campaigns from purchasing and product usage data?

No

Yes

4. Do campaign management systems work integrated with other systems?

No

Yes

5. Do you analyze campaign performance to use these analyses in new campaigns?

No

Yes

Smart Business Processes Sales and Distribution Channels

Principles	Technologies
Real time data management (Collection/Processing/Analysis/Inference) Agility Service oriented	Data analytics and Artificial Intelligence Communication and Networking Cloud Mobile technologies

Questionnaire

1. What is the level of sales team support with digital products and services and real-time access to systems?

None

Low

Medium

High

2. Do you conduct real-time profitability analysis?

No

Yes

3. Do you use real-time and automated performance management systems for local sales force?

No

Yes

4. To what extent are your sales channels integrated?

None

Low

Medium

High

5. To what extent do you use integrated channels to communicate with customers and to manage customer interaction?

None

Low

Medium

High

6. To what extent do you collaborate with partners to reach customers (i.e. exchange of customer insight, etc.)?

None

Low

Medium

High

7. Which content analyses are performed on social media?

None

Sentiment analysis

Trend analysis

Smart Business Processes

Human Resources

Principles	Technologies
Real time data management (Collection/Processing/Analysis/Inference) Agility	Data analytics and Artificial intelligence Cloud Mobile technologies

Questionnaire

1. In what areas is the data collected and data analytics is used?

	Data collected	Data analytics used
Capability analytics—(a talent management process that allows you to identify the capabilities or core competencies you want and need in your business.)
Capacity analytics—(seeks to establish how operationally efficient people are in a business.)
Competency acquisition analytics—(the process of assessing how well or otherwise your business acquires the desired competencies.)
Employee churn analytics—(the process of assessing your staff turnover rates in an attempt to predict the future and reduce employee churn.)
Corporate culture analysis—the process of assessing and understanding more about your corporate culture or the different cultures that exists across your organization.)
Recruitment channel analytics—(the process of working out where your best employees come from and what recruitment channels are most effective.)
Leadership analytics—(unpacks the various dimensions of leadership performance via data gained through the use of surveys, focus groups, employee interviews or ethnography.)
Employee performance analytics—(seeks to assess individual employee performance.)

2. Can your company share real-time data with employees in the field?

No

Yes

3. Can employee training be carried out in a virtual environment?

No

Yes

Smart Business Processes Information Technology

Principles	Technologies
Real time data management (Collection/Processing/Analysis/Inference) Interoperability Virtualization Decentralized Integrated business processes	Data analytics and Artificial intelligence Communication and Networking Cybersecurtiy Cloud Mobile technologies

Questionnaire

1. How far along are you with your IT security solutions? (Lichtblau et al. 2015)

	Solution planned	Solution in progress	Solution implemented
Security in internal data storage
Security of data through cloud services
Security of communications for in-house data exchange
Security of communications for data exchange with business partners

2. Are you already using cloud services? (Lichtblau et al. 2015)

	Cloud-based software	For data analysis	For data storage
Production, Logistics and Procurement
R&D—Product development
After sales services
Sales and Distribution channels
Pricing/Promotion
Human resources
Information technology
Finance

3. Do IT dashboards be used for traceability of company processes?

No

Yes

4. How would you evaluate your equipment infrastructure when it comes to the following functionalities? (Lichtblau et al. 2015)

	No, not available	Yes, to some extent	Yes, completely
Machines/systems can be controlled through IT
M2 M: machine-to-machine communications
Interoperability: integration and collaboration with other machines/systems possible

Smart Business Processes

Smart Finance

Principles	Technologies
Real time data management (Collection/Processing/Analysis/Inference) Decentralized	Data analytics and Artificial intelligence Cloud

Questionnaire

1. Do you perform real-time cost calculations with data obtained from production?

No

Yes

2. Do you analyze company’s cash flow and investments on a historical basis?

No

Yes

3. To what extent do you utilize from financial data when make investment decision?

None

Low

Medium

High

4. To what extent are your financial systems automated?

None

Low

Medium

High

5. How do you perform financial risk measurement?

None

Historical basis

Real-time

Strategy and Organization

Business Models

Questionnaire

1. Do your existing products and services comply with innovative digital business models?

No

Yes

2. To what extent are you aware of the “As-a-service” business model? (The University of Warwick Maturity Model)

No awareness.

Aware of concept with some initial plans for development

High awareness and implementation plans are in development

“As-a-service” has been implemented and is being offered to the customer

3. Which degree of resource is allocated to digital business models?

None

Low

Medium

High

4. Is the current business model of the company evaluated and updated during the interim period in the matter of digitization?

No

Yes

5. To what extent do you monetize your new data-driven services?

None

0–2.5%

2.5–10%

Over 10%

Strategy and Organization

Strategic Partnerships

Questionnaire

1. Does your company have partnerships for Industry 4.0 projects with following options?

None

Academics

Technology providers

Suppliers

Customers

2. How would you describe the implementation status of your Industry 4.0 strategy? (Lichtblau et al. 2015)

No strategy exists

Pilot initiatives launched

Strategy in development

Strategy formulated

Strategy in implementation

Strategy implemented

3. Do you use indicators to track the implementation status of your Industry 4.0 strategy?

No, our approach is not yet that clearly defined

Yes, we have a system of indicators that gives us some orientation

Yes, we have a system of indicators that we consider appropriate

Strategy and Organization

Technology Investments

Questionnaire

1. Which technologies in your company are driving Industry 4.0?

None

Data analytics and Artificial intelligence

Adaptive robotics

Simulation

Embedded systems

Communication and Networking

Cybersecurity

Cloud

Additive manufacturing

Virtualization technologies (VR & AR)

Sensors and Actuators

RFID and RTLS technologies

Mobile technologies

2. To what extent do you allocate sufficient budget to investments in Industry 4.0?

None

Low

Medium

High

3. How often do you conduct a cost/benefit analysis for Industry 4.0 investment? (The University of Warwick Maturity Model)

No measurable Industry 4.0 investment yet

No ongoing review of cost/benefit analysis for Industry 4.0 investment yet

Annual cost/benefit analysis of Industry 4.0 investment

Quarterly cost/benefit analysis of Industry 4.0 investment

4. In which parts of your company have you invested in the implementation of Industry 4.0? (Lichtblau et al. 2015)

	Planning investment	Investment done
Production, Logistics and Procurement
R&D—Product development
After sales services
Pricing/Promotion
Sales and Distribution channels
Human resources
Information technology
Finance

Strategy and Organization

Organizational Structure and Leadership

Questionnaire

1. Are business units/project teams structured in interdisciplinary in the company?

No

Yes

2. Is there any business unit to maintain relationship or communicate with customers?

No

Customer service

Customer relationship management

3. Is there any data-driven organizational structure? (Data scientists, analytics team, digital transformation director, etc.)

No

Yes

4. To what extent are employees equipped with relevant skills for Industry 4.0? (The University of Warwick Maturity Model)

Employees have little or no experience with digital technologies

Technology focused areas of the business have employees with some digital skills

Most areas of the business have well developed digital and data analysis capability

All across the business, cutting edge digital and analytical skills are prevalent

5. Do you have training for the digital transformation in the company?

No

Yes

6. How is your IT organized? (Lichtblau et al. 2015)

No in-house IT department (service provider used)

Central IT department

Local IT departments in each area (production, product development, etc.)

IT experts attached to each department

7. To what extent do departments collaborate with each other? (The University of Warwick Maturity Model)

The business operates in functional silos

There is limited interaction between departments (i.e. S&OP process)

Departments are open to cross-functional collaboration

Departments are open to cross-company collaboration to drive improvements

8. To what extent does the leadership team support Industry 4.0? (The University of Warwick Maturity Model)

Leadership team does not recognize the value of the Industry 4.0 investments

Leadership team is investigating potential Industry 4.0 benefits

Leadership team recognizes the financial benefits to be obtained through Industry 4.0 and is developing plans to invest

Widespread support for the Industry 4.0 within both the leadership team and across the wider business

9. How is your Industry 4.0 team organized to execute innovative projects?

There is no employee for Industry 4.0 projects

There are employees for Industry 4.0 project; but in different business units

There are employees for Industry 4.0 project in the same business unit

10. Is there any working environment where OT/IT units work together?

No

Yes