Industry 4.0: the digital transformation of the manufacturing industry

The supply chain starts with suppliers: how the IT department drives the shift to Industry 4.0

With the Covid-19 pandemic and the war in Ukraine, tension across the supply chain has gone up a notch, starting on the supplier side. In this first podcast episode, Olivier Fiquet looks back at the relationship he maintains, as a CIO, with his suppliers. The company he works for deals closely with thousands of suppliers whose technological maturity varies widely. While some have already begun their transformation, others still need support to get there. Let's look at the techniques Olivier Fiquet has put in place to reduce supply chain tension as much as possible.

Faced with the lack of shared standards and maturity in this first link of the supply chain, it's interesting to see a group's IT department willing to help its suppliers make technology choices or use the right platforms. To keep customer promises on cost and lead times, Olivier Fiquet and his teams want to gather as much information as possible about incoming raw materials. Without a digitized supply chain, that's simply not possible.

As an example, Olivier Fiquet presents his project: with the help of his teams, he rolled out a specific tool tailored to his suppliers. The solution nudges them with notifications and emails so they can send all the necessary information about incoming raw materials on time. Thanks to a notification sent at the right moment, suppliers stay informed and can meet the deadlines.

At the same time, the data challenge is a major one. Sometimes business teams or suppliers don't get the data they need in time, which breaks the supply chain. In other situations, the company ends up with a huge amount of information that isn't necessarily structured. The difficulty lies in selecting and classifying the data — understanding what's urgent versus what's important — so the supply chain performs well. The relationship between business teams and suppliers is a pillar of the transition to Industry 4.0

30 years to optimize the supply chain: a long and painstaking process

Daniel Freyd looks back on the thirty years during which his company has been in constant transformation. Since joining twenty years ago, he and all his teams have worked tirelessly to evolve the supply chain. From modeling the layout of living spaces to installing the furniture, every link in the supply chain has been supported by the IT department:

• Recording the order in store: a designer-salesperson discusses with customers the full set of products they want to buy.
• Sending the order to suppliers: the IT department automatically sends forecasts of the quantity of raw materials the company needs.
• Building the capacity planning and machine capacity: with several thousand pieces of furniture shipped every day, tools developed by the IT department check availability across the workforce, production tools, production sites, and so on — all while sticking strictly to customer demand.
• Machine maintenance: the IT department's goal is to avoid unsustainable breakdowns (an outage of more than two hours has serious consequences for the business).
• Furniture manufacturing and quality control: tools were built in-house (using AI and computer vision) to inspect every piece of furniture as quickly as possible.
• Shipping, delivery and installation: the IT department steps in one last time with its logistics partners, whom it also supports.

What's more, depending on the time of year, the supply chain and the production line are under more or less pressure. Together with the other business departments, the IT department takes the time to find solutions — on the human resources side (recruiting operators, tailored training, workforce management, etc.), but also on the supplier side (factoring in their calendars too) and the data side (order intake, confirmation, tracking).

You can clearly see the difficulty — and the many parameters — the company had to take into account to optimize its supply chain. It's impressive to see how deeply the information system is woven into every step of the supply chain to deliver as much information as possible.

The challenge of building your own production line in Industry 4.0

Pierre Duriez, CIO of Fuji Electric France, explains how his subsidiary managed to break away from the parent company's production line by setting up its own. The French branch of the company decided to call on the IT department to make it happen. Pierre Duriez's teams took the lead in structuring the project team:

First came work on using building blocks that can communicate with one another. The goal is to help the different business units working on the production line with their day-to-day tasks. To choose these solutions, the IT department ran an active technology watch, relying on real-world experience and not just on vendor presentations. In particular, they tested several solutions to compare them through proofs of concept, and went to meet companies already running the solutions they were interested in. Instead of an all-in-one solution that's far more complex to handle, they ended up with a "Lego-style IS" whose building blocks are connected to one another.

Second, he focused on the collaboration between the different entities and these different business building blocks. In both collaborations, the main challenge is the transfer (sending and receiving) of data and information. By working on data flows, the IT department made sure every entity could easily access the data that concerns it. By mastering the data, the company can also trace everything that happens at each link of the production line. That gives access to detailed reports and dashboards — and therefore supports decision-making to improve the line's performance.

Third, the IT department tackled the following question: how do you prioritize continuous-improvement projects? Depending on their importance, projects are prioritized by the time required to deliver them. A very short-term horizon is imposed for day-to-day tasks or problems that must be solved fast. The medium-term horizon leaves a bit more time to improve or renew what already exists. Finally, the long-term horizon makes it possible to launch structural projects (new features, new building blocks, etc.).

Best of breed is gaining ground over the monolithic model

As CIO of the CMR group, Serge Maurey long asked himself the same question: should he work to structure his IS as a single block, or accept that it's made up of many technology building blocks? Rather than adopting an "all-in-one" software suite from a single vendor, he weighs the building blocks he can use around a centralized ERP.

Let's go back to the example Serge Maurey shares: when he arrived at the company, its CIO relied on a central ERP covering a good share of business needs — but not all of them. On top of that, several solutions peripheral to that ERP were already in use by the business teams. Taking the time to analyze his IS foundation, Serge Maurey realized the IS was already shaped like a best-of-breed model. He got his teams involved to perfect it.

Two significant shifts are enabling a more pronounced best-of-breed model, calling the ERP's scope into question:

• More and more SaaS solutions, tailored to specific needs, are being developed. These tools are very appealing to business teams because they aim to meet their overall expectations and come with very good APIs.
• API integration tools have also improved, making it far easier than before to integrate all the solutions you want. Interconnecting SaaS solutions and managing synchronization has become much simpler.

So we can see the monolithic model fading in favor of best of breed. The real question is defining the ERP's scope of action and deciding whether to offer more and more building blocks to business departments. That question seems to be guiding CIOs as industrial companies move toward Industry 4.0

When marketing and IT work together to design a solution

Here's a concrete example of a transformation toward Industry 4.0: when the business and the IT department team up and collaborate to design a service together, for its customers. That's the case at Sames Kremlin with Thibault Cognon's marketing & innovation department. He called on Jean-Stève Hadjistavrou's IT department to automate the control of industrial robots.

The project has a dual objective: address the shortage of qualified staff and avoid losing time on training new operators. By working hand in hand, marketing and the IT department work for the business.

Within this partnership, each department brought its stone to the building and supported the other so everyone could put their skills to work for the project. Marketing fed the IT department as much information as possible to make its job easier, by being present in the factories. That presence allowed the marketing department to make the decisions about the project's progress. On the other side, the IT department focused on the entire technological dimension of the project. The two teams worked as one, always asking themselves the same question: what do we want to end up with?

Together, the two teams laid out the technical and legal constraints of the project so they could move forward with full knowledge of the facts. Bringing the IT department and the business department together around a shared goal gave birth to a new customer service.

Connected maintenance to prevent machine breakdowns on production lines

Alexis de Nervaux, who already appeared on the CIO Révolution podcast (ep. 16 - "Wearing the dual CIO & CDO hat"), returns in this season devoted to the digital revolution in industry. He talks about one of his latest projects, which he has had in mind for several months now. The project rests on the following observation: avoid any machine breakdown that causes production delays. By snowball effect, deadlines slip, which can damage the brand's image.

Connected maintenance is about anticipating machine failures. By getting ahead of a breakdown or malfunction, you can carry out the necessary repairs so they never happen. Well chosen, connected-maintenance solutions are a real aid to decision-making in critical situations. Of course, for this to work, the chosen solution must perform as well as possible — even though the machine fleet is highly heterogeneous. Alexis de Nervaux embarked on a strict selection process:

• Step one: analyze the market of connected-maintenance solutions to understand how they work, understand the different techniques and methods used, list the features, see how they can be deployed at small, medium or large scale, check whether these solutions are easy to use, and so on.
• Step two: pick a small panel of solutions to test in a factory chosen beforehand — the "smart maintenance" project. By choosing a single factory (in this case one where breakdowns can be frequent), Alexis de Nervaux tested three different solutions. He quickly realized the first was not suitable at all, the second didn't fit the company's needs, and the third was the one he would favor for the long term.
• Step three: try to establish a wider scope to deploy the solution at a larger scale by identifying the factories where predictive maintenance would perform best.

Ironically, since these tests proved conclusive while shedding light on this technology for factories and operators, some factories wanted to seize the project much faster than Alexis de Nervaux had planned. At times it's hard to get business teams involved in certain projects, but when those projects work and hold real value for them, they take the time to look into them. Sometimes the solution's rollout can even overheat, with business teams absolutely wanting to acquire the tool. It's up to the IT department to slow the game down and make sure the rollout goes as smoothly as possible.

Connected maintenance — and more broadly, tools powered by artificial intelligence or the Internet of Things — are concrete examples proving that innovation can help companies transform.

The cybersecurity stakes in Industry 4.0: how to bounce back after a massive attack

On February 21, 2021, the company Manutan was hit head-on by the DoppelPaymer ransomware. Sylvain Coquio, CIO of the Manutan group, looked back at how the company bounced back after suffering such an attack. After a long overhaul of its cybersecurity, Manutan managed to get back on its feet by leaning on four fundamental pillars:

• A real overhaul of the IS. As soon as it was attacked, the entire company stopped working. The whole organization realized how vital the information system is. When a company's information system is obsolete, aging and disorganized, chances are it's highly vulnerable — easy prey for hackers. Legacy is a poorly locked entry door for these malicious actors. Sylvain Coquio therefore set about taking back control of the legacy and introducing new solutions that are independent of one another.
• Recruiting new skills. Every quarter, Sylvain Coquio takes stock with cybersecurity specialists to understand, know and absorb the trends and new risks companies may face. A new department was also created: the Marketing Business Technology (MBT) department, present at the executive committee, to create synergy between the marketing teams, customer-experience teams, e-commerce, data, master data management and IT.
• Changing the budget paradigm. The company gradually increased its IT budget to move toward a more digital positioning. That generates huge expectations, particularly among business departments impatient to get new capabilities. Sylvain Coquio has to juggle long-term projects (like the IS overhaul) with delivering short-term solutions to meet the business units' needs.
• Raising employee awareness. Manutan launched major training campaigns to make every employee aware of the basic habits and concepts needed to avoid any new risk of attack. Every new hire goes through this mandatory training and must pass a test validating the knowledge they need to master. If they fail the assessment, they must take the training again.

Thanks to concrete work on these four pillars, Manutan managed to get back up after suffering a large-scale attack. Unintentionally, this cyberattack also proved that every part of the company was able to collaborate and stick together to solve problems while transforming the business. Cybersecurity is a critical stake for Industry 4.0.

Hypergrowth: from an SME to an industrial mid-sized company

In this final podcast episode, Emmanuel Artigue, CIO of Toupret, discusses the IS challenges of an SME morphing into a mid-sized company. It's a key moment in a company's life where IT fully has a role to play. Thanks to its international expansion, the company has been growing steadily for nearly 20 years and recently crossed the 250-employee threshold.

Emmanuel Artigue's IT department strives to support the company's subsidiaries in their transformation strategy while managing their hypergrowth. These subsidiaries are semi-integrated: while some chose to adopt the parent company's ERP, others chose independence because of their size or the specificity of their market. Rather than trying to "fight" the spread of shadow IT, Emmanuel Artigue preferred to adapt, live with it, and support these entities to give them maximum agility.

To accelerate the company's transformation, he had no choice but to outsource certain skills, moving from 90% in-house skills to a perfect balance between external and internal ones. In time, he wants nearly two-thirds of skills to be outsourced so internal teams can focus on structural projects tied to the company's growth.

For Emmanuel Artigue, the CIO supports this shift from SME to mid-sized company thanks to the multiple hats that come with the role. He combines the profiles of the technologist (as the IT specialist), the strategist (the one who constantly asks how IT will bring value to the company) and the operator (making the company culture evolve toward transformation). It's with a CIO steering the transformation through these different hats that companies transition to Industry 4.0.