For manufacturers, a digital transformation often means looking for new ways to leverage technology and IoT (Internet of Things)-derived data to generate revenue. And in many cases this means talking about the next generation of manufacturing. What does this actually look like, and what steps do manufacturers need to take to achieve Industry-4.0 status?

Manufacturing is quickly finding the benefits in servitization, and the industrial sector has been front and center throughout many of our discussions. As a result, services are an increasingly important part of manufacturers’ digital transformations.

As part of the industrial IoT, devices and machines collect and share massive amounts of data throughout the manufacturing process. Plant floor managers and manufacturing executives can use this realtime data to make business decisions that affect workflow and production.

Some of the value of the industrial-IoT in manufacturing includes streamlined processes through improved automation as well as increased on-time production, in part due to predictive maintenance and reduced unplanned downtime. This is what Industry 4.0 looks like.

But it’s always important to examine not only the opportunities, but also the roadblocks. Industrial-IoT adoption challenges include security, interoperability and complex legacy systems, system reliability, and budgetary constraints.

Interoperability, for instance, is an important one. In order for a smart factory to work as it’s intended to do, all of the different components of a system need to be able to “talk” to each other.

I frequently use this metaphor about the IoT and the need to “speak the same language” because it just illustrates the point so well. We can’t have some machines on a factory floor speaking German and other machines on the same factory floor speaking Chinese. They ultimately will not be very efficient.

Mutually agreed upon standards for the Industrial IoT and the entire supply chain in manufacturing are important in supporting interoperability and reliability going forward.

Zebra Technologies recently released a whitepaper delving into manufacturing and Industry 4.0, and one important hurdle it points out is the gap between IT and operations departments.

This gap will need to be bridged in order to fully leverage the benefits of the Industrial IoT. For instance, if equipment on the factory floor is generating a bunch of data that’s being funneled to the IT (information technology) department, operations is going to need to know what the data is revealing about areas in which operations can be improved.

To achieve digital transformation manufacturers will need to invest in the concept of individualized manufacturing and what some call “batch size 1.”

Looking to history, manufacturing started out extremely customized, with things being built one at a time, by hand or, eventually, by machine. Mass production changed the manufacturing business dramatically in the 20th century after the movable assembly line was invented. But after several decades of mass production, customers began to want more options—more customization.

Manufacturers adapted their business models to provide options. And now, there’s a trend toward individualization, in large part due to connected devices and the IoT. How so?

In the consumer realm, some examples are location-based couponing, connected-car systems that connect to smartphones to create a seamless, personalized experience inside a vehicle, and smart-home systems that learn homeowners’ preferences and adapt accordingly.

We’re not exactly back to building things by hand, but we’re no longer satisfied by the lack of individualization inherent in mass production, either. The IoT is making it possible for manufacturers to get closer to the goal of “batch size 1” manufacturing.

Perhaps one day, a customer will be able to send a manufacturer some requirements, and then a product will be built based on those requirements and delivered within a reasonable timeframe.

Importantly, this will need to be done in a way that supports manufacturers’ bottomlines. Also, 3D printing is one technology in particular that will make mass customization possible. This business model will resemble a MAAS (manufacturing-as-a-service) model.

Can you imagine a world in which a production batch size of just one unit makes actual business sense? Manufacturers need to be asking themselves a few questions to create a roadmap for their digital transformations. To what degree have shortages or discrepancies affected manufacturing efficiency in the past 12 months? What does equipment downtime typically cost? How do you manage asset maintenance? How do you currently identify quality issues?

These questions will help them build a case for the IoT. What’s more, they can use their answers to these questions to begin to create a priority list based on their operations’ particular needs.

We’ve talked about some roadblocks to IoT adoption in this column, and we don’t want to ignore the reality of those, but it’s also reality to admit that Industry 4.0 is the future of manufacturing. Leveraging the IoT to maximize operations and get closer to the “batch size 1” vision will help manufacturers navigate the changing tide that is this connected world.

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