Industry 4.0: Why Truly Smart Factories Are Remarkably Simple.

A modern Smart Factory is making extensive use of many modern digital technologies that help to improve the throughput, reduce waste, cut costs and develop new products for the world of tomorrow.

Let’s say for example that a business wants to reduce the production costs of one of its own products. To do this it has a wide array of strategies to choose from: We could change the product design to improve the feasibility, apply automation to reduce handlings, apply lean manufacturing, find cheaper suppliers and even create a digital factory to work paperless.

Every strategy will result in a different outcome. The new era of the Fourth Industrial Revolution forces the management to make a well-educated decision on which route to take to achieve the company’s goals.

Two great questions to ask ourselves in this scenario are:

“What is the operational target we are trying to achieve”


“Which option makes the best return on our investments?

Welcoming the Smart Factory

These days, every manufacturing company has heard about the ‘Smart Factory’ or ‘Digital Factory’. They seem also a great all-in-one solution to all of our challenges. Both are closely related, but one ‘smart’, and the other is just ‘digital’. A huge difference, in which we’ll have a more in-depth later.

Based on many case-studies, it recently became clear that: In order to create a truly Smart Factory, the business process has to be made (very) simple first. To understand this, let’s look at a business case example; Tesla Motors & the U.S.A.  & Russian aerospace industry.

Rocket Science

The more advanced a system becomes, the greater the likelihood that something will go wrong. Tesla recently found this out during their launch of the new Model 3 electric car. Due to high popularity, there was a need for high output and scalability.

To respond to this demand a special ‘lights-out’ factory was built that was almost fully automated by robots and computer controlled systems. At first, this new and brave strategy seemed the appropriate approach for the ‘car of the future’. The reality seemed a bit more challenging, as Elon Musk tweeted:

“Excessive automation at Tesla was a mistake. Humans are underrated” - Elon Musk

The production faced serious delays and as a result, the stock prices of Tesla dropped sharply. It seemed that the Silicon Valley company reached a limit and that sending rockets to space was easier than building series of cars. Simply put: Production of series is actually harder than rocket science.

In the aerospace engineering industry, there is also a well-known story about the Americans vs. the Russians: Faced with the fact that ball-point pens would not write in zero-gravity, both were looking for a (seemingly better) way of writing in space.

The Americans immediately started to spend millions on R&D and testing (even using special planes to simulate the gravityless environment) and presented their ingenious pen: The Fisher Space Pen. On the other side of the globe, the Russians applied a much simpler approach: they decided to use a basic pencil.

I think this is a good illustration of Leonardo da Vinci's famous quote

"Simplicity is the ultimate sophistication".

Let’s take this insight with us in our strategy to improve our production processes.

The Toyota Approach to Industry 4.0.

The principle “simplify your processes before investing in technology" is central to Toyota’s vision on Industry 4.0 - and Smart Factories.

This approach allows the company to avoid unnecessary investments in technology. Only when no more progress towards a goal is possible by simplification is the investment in more smart technology considered. Or simply put by the founder, Taichi Ohno:

"Use your brain before you get out your wallet."

This doesn’t mean that Toyota doesn’t rely on technologies altogether, actually more on the contrary: the business is known to be one of the biggest investors in R&D, Automation and Robotics. The difference is their more effective approach to technology.

Industry 4.0: More Than Technology

For my consulting clients and during my keynotes I always address the importance of using a strategy that relies both on the current products, leverages the current automation opportunities and seek to find new business models that can create exponential growth in the business.

The same applies to the optimization of the production processes.

  • First, we will find ways to improve the process by management strategies such as Quick Response Manufacturing (QRM), LEAN processes and team building.
  • Second, we find a way to automate those improved processes (if only the first step has been checked) by integrating systems (such as MES-software, integrated into the business ERP).
  • And lastly, we start exploring new manufacturing techniques that are completely in unexplored territories, such as 3D printing, Augmented reality or even Big Data Approaches.

Want to know more about Quick Response Manufacturing (QRM), LEAN processes or ERP-integrations? Leave me a message on this page!