MIT Sloan Executive Education Blog

What’s your next move? A systems approach to Industry 4.0

John Carrier Speaking

By John Carrier, Senior Lecturer of System Dynamics at the MIT Sloan School of Management

In response to being asked the number of chess moves he looked ahead, World Chess Champion Jose Copablanca reportedly replied, “I only look one move ahead at a time, but I always pick the right move.” With respect to your organization’s transformation, how will you find the right next move?

The problem is not the lack of research reports estimating trillion dollar markets or a shortage of digital transformation roadmaps. What is lacking is a systematic framework for identifying that critical next move, supported by relevant use cases.

Why is finding the right next move so difficult? Proper selection requires the simultaneous consideration of new technologies, system thinking, and cultural norms in order to scope down from the long-term vision to this week’s next steps. The answer lies within every system if you know how to look and where to listen. Therefore, understanding your system—and training your people to be “system thinkers”— is the key to leveraging the power of Industry 4.0 and the IIoT (Industrial Internet of Things).

An organization’s competitive edge no longer resides on privileged access to technology or capital, as these are readily available to all. Instead, it depends on the organization’s ability to quickly incorporate new technologies to improve internal processes and adapt to ever-changing customer demands. These technologies will allow expert problem solvers to see and solve problems that competitors don’t even know exist. These new technologies will also provide greater visibility into the existing organization and its role in the entire supply chain.

What is your next move? Repairing degraded feedback loops

All systems contain “hidden factories,” made up of poorly understood processes and behaviors, due to a lack of proper feedback loops. As Industry 4.0 has significantly reduced the cost to implement feedback loops, the most successful use cases arising today are those that take advantage of inexpensive sensors, open source algorithms, and low cost connectivity. The early returns on these use cases are impressive:

  • A leading candy company realized significant savings by adding temperature sensors to its processing lines and is now scaling these IIoT improvements across the entire operation, saving millions per year.
  • At wind turbine farms, new sensors measuring local wind speed and direction have the potential to increase production by 20%.
  • At an order processing organization, automated measurement of operator entry identified a 50% loss in response time during busy periods due to process server latency, freeing up staff resources to place greater focus on customer understanding.

The last hurdle: Culture

Ultimately, successful Industry 4.0 transformation is 20% technology and 80% how people work together. In the words of Professor John Van Maanen at the MIT Sloan School, “Culture is a problem-solving device created by people to solve common problems.” In short, the companies with the best cultures will survive and ultimately thrive.

For a more in-depth understanding of how system control concepts can be used to improve your Industry 4.0 journey, watch this recent webinar, 7 systems principles you need to know before implementing IIoT.

John Carrier’s two-day course, Implementing Industry 4.0: Leading Change in Manufacturing and Operations, trains leaders to become system thinkers in the context of Industry 4.0. MIT faculty and a panel of industry experts will help you understand:

  • The nine pillar key technologies of the IIoT
  • How to reinvigorate Lean and Six Sigma efforts by leveraging the IIoT to produce a new level of synchronization and performance
  • How to wire up an IoT device from sensor to cloud and back to controller with MIT Hackathon pros.
  • How to construct the winning IIoT playbook that will work for your company

You will also see examples from companies who have won the problem-solving game in the age of IIoT and find out how they are building dynamic competitive advantage within their supply chains.


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