Industry 4.0 implementation for multinationals

https://doi.org/10.1016/j.psep.2018.06.030Get rights and content

Highlights

  • Contributes to a holistic business solution focusing on enablement of business strategy, system and data integration, facilitating real time business optimisation.

  • The ability to monitor, to manage, any aspect of the business from shop floor to top floor with all available data for decision making.

  • The solution provides for any optimisation initiative, these can include functionality and workflow capacities. Initiatives can be enabled via real time data, through the defined network.

  • With a globally connected business, all contemporary requirements can be included. This could include any cutting edge technologies.

  • Extended the research into business simulations as aligned to business processes with the aim of securing operational data to create a cyber physical system.

Abstract

Delivering on digitalization for large multinational business, in the contemporary context of global operations and real time delivery, is a significant opportunity. Operations of localised facilities independent of global operations can result in compromised global synergies. Centralised functions such as research and development, optimisations of assets, corporate planning (strategy, investment planning, financial), and supply chain together with any other function deliver significant business value. Integration of these functions via industry 4.0 delivers significant business value, delivering strategic and operational benefits. This research proposes a global system approach, as defined by industry 4.0 (vertical, horizontal and total business integration), to this challenge, from ERP through manufacturing systems down to instrumentation. The proposed work resolves the inter-site challenges together with global standardization and inter-functional integration. This proposed architecture is reinforced by a simulation illustrating the benefits of the integrated business.

Introduction

Business development is usually, but not always, related to short, medium and long term financial benefits. Facilitating optimistic growth targets has directed executives into diverse business growth initiatives. With the advent of globalization, it has become increasing natural to seek growth potential outside of the traditionally defined borders (Scholte, 2007; Kristianto et al., 2017). Accompanying the business perspective comes advancement in information technology bringing with it intense global competition. This has resulted in internationally competitive businesses making significant changes to ensure competitiveness (Cigola and Modesti, 2008; Kim and Chai, 2017).

Multinationals have employed various optimisation initiatives such as Functional Excellence (FE), Operations Excellence (OE), Balance Score Cards (BSC), Financial Reporting (FR), Custom Satisfaction Surveys (CSS) etc. Business technology perspective includes information management toolsets; Enterprise Resource Planning (ERP), Process Control Systems (PCS), Business Systems (BS) and more recently Manufacturing Execution Systems (MES) (Hansen and Schaltegger., 2016; Aqlan and Al-Fandi, 2018).

These initiatives have not been totally integrated within the Information Management (IM) capacity inclusive of data automation. The challenge is further exacerbated within the HR area, where the rigid individual “measure” data does not exist. Essentially a total seamless, data enabled business solutions, facilitating near real time decision making is a deficiency.

Total business optimisation requires the agglomeration of strategy, operations, human resources, supply chain together with all business functions into a seamless decision making toolset. This toolset should focus on real time data availability, enabling optimum business decision making. Large corporates have attempted business optimisation but with distinct gaps, this includes optimum technology application and successful vertical and horizontal integration (Stock and Seliger, 2016; Dolgui et al., 2018).

This research focuses on the development of a holistic business solution focusing on Information management (IM) enablement of business strategy; system and data integration, facilitating real time business optimisation. The research presents a toolset: A specialised focus area would deliver on industry 4.0.

The evolution of technology from the most recent industrial age to the technology era, better known as Industry 4.0 has resulted in greater demand for horizontal, vertical and end to end digital integration as defined by Oesterreich and Teuteberg (2016), Weyer et al. (2015) and Stock and Seliger (2016). Industry 4.0 embraces the paradigms; viz., horizontal and vertical integration, end-to-end digital integration (Ivanov et al., 2016; Liao et al., 2017; Bechtsis et al., 2018).

Acquisitions and mergers (Sherman, 2018) combined with the potential of organic growth, of national and international businesses, have become an increasingly familiar practice over the last century. This has resulted in the current scenario of the evolution of business into large international corporates. Growth and centralisation, always-ensuring business sense, however could result in significant unanticipated exertions. With a low-resolution view, the challenge seems purely functional but with a magnified view, the actual challenges become apparent (Henson and Sandberg., 2017). Symptoms of the problem include but are not limited to:

  • Lack of real time, business critical data facilitating optimum business decision making

  • Total business delivery lacks value chain optimisation

  • Low inter-level system integration resulting in manual data or inaccurate data

  • Optimum automated workflows not enabled

  • Organisation outputs become rigid and limited due to hierarchy constraints

  • Apparent gaps in strategy between head office and business units, down to individual employees

  • The inability of an employee to deliver due to unclear roles, lack of appropriate data

  • Different version of truths and different data sources

  • Specialized tools that requires different skill-sets and different training

  • Low performance together with non-measurement thereof

The symptoms/problem identification is simple when compared to the resolution thereof. Various attempts have been initiated in resolving the issues associated with efficient functioning of a large conglomerated business. These include functional excellence, cross-functional excellence, lean manufacturing and process excellence (Quezada et al., 2017; Buer et al., 2018; Moeuf et al., 2018). These are only a limited number of potential solutions that have been introduced, in an attempt to overcome these challenges. The success rate of these has been diverse, from significant to non-impacting. The reasons for the limited success includes; organisational politics, positioning, hierarchy, time constraints, lack of HR inclusion, the limitations of the proposed solution together with the skills for implementation.

The challenge needs to be addressed using a different toolset, a toolset that is independent or has a very low dependency on these limiting factors. The higher level of this research aims at propositioning a total business solution, inclusive of auto data enablement for optimum business decision making. This would provide role based mission critical data for optimum business decision making. The industry 4.0 proposition around system centric, total business integration could provide a resolution. The two key dimensions of business decision making includes location (Global) and site (Hierarchical), see Fig. 1.

This research aims at proposing a contemporary approach to improving the situation via the application and development of a more quantitative toolset, with a human resource focus. The total solution proposed includes the exploiting of IT, engineering, mathematical models, statistics and modern business systems hybridized into a feasible, reproducible and sustainable business solution. Loeser et al. (2013) highlighted the opportunity for business optimisation together with the benefits of “green IT”.

The summarised approach to the research been proposed, would include literature searching, standards search and development, Information Technology (IT) architecture, Functional development, within the human resources, balance score-card, Information technology, business operations and other relevant areas. Identification of opportunities, which would enable implementation of a single total business solution. Development and propositioning of an appropriate enablement model to sustain the proposed system.

Current developments in technology including industry 4.0 and Industrial/Internet of Things (IoT/IIoT) together with the global village concept (the world is contracting based on connectivity) have contributed to large international corporates demanding digital enablement (Rymaszewska et al., 2017; Theorin et al., 2017). Growth of companies has surpassed geological boundaries with business optimisation as the key driver in securing sustainability. Total business optimisation must include, but not be limited to (all business functions), production, supply chain, human resources, finance, information management, sales and distribution research, maintenance, safety, environmental, security, design, project management together with all other business functionality. This has to be achieved on an international basis with a high level of repeatability and consistency, inclusive of all business functions (Laser, 2005; Xu et al., 2018; Yin et al., 2018).

Multinational have adopted various toolsets, including, Enterprise Resource planning, Functional Excellence, Operations Excellence, Kaizen, Advanced Control, Supply chain optimisation and Financial modelling. This would be referred to, in this research, as the optimisation initiatives. The deployment has traditionally been approached via specialised consultants with silos of solution development. In many instances, the individual solutions do not comply with business requirements with distinct cross-functional gaps. Can the 4IR solution cater for all optimisation initiatives?

There appears a distinct gap to deliver a seamless, strategic aligned, total Information Management (IM) business intelligence toolset with global real time enablement. This would be referred to, in this research, as the contemporary opportunities. The toolset should secure real-time data across business thus facilitating optimum, real time, global, business decision making. The all-encompassing toolset catapults the business into an “all Knowing” space where the master system can be extended for any new business requirements from reports to operational changes including new business modules inclusions. This would align to the industry 4.0 concept. Can the toolset provided accommodate the contemporary opportunities?

The research question adopted for this research includes the delivery of industry 4.0 by maximising the three subsets detailed below;

  • business functions: These are the functions such as Finance, HR and Maintenance

  • optimisation initiatives: These include traditional initiatives as currently understood such as balance score cards, lean and operational excellence

  • Contemporary opportunities: These include industry 4.0 subsets such as integration, IoT and intelligence.

The paper is organised as follows. The next section provides the review of extant literature; section three presents the current business functions that must be enabled using Industry 4.0; section four presents the methodology and industry 4.0 framework; section five provides an illustration of industry 4.0 enablement. This section is followed by section six on discussion. The final section consists of conclusions drawn from study, managerial implications, unique contribution, limitations and future research directions.

Section snippets

Literature review on industry 4.0 enablement and considerations

The mechanisms studied here are grounded upon Organization Information Processing Theory (OIPT). Information processing in business management includes the collection of data, converting the data into information for business decisions and storage of the information in database (Egelhoff, 1991). Business processes are open systems and expected to react fast to the changes in dynamic business environment. The main research focus is directed towards managing uncertainties and reducing risks (

Current business perspective

Bringing together the operations detailed above, results in a rather complex structure with individual silos of decision making which has a significant effect on parallel delivery streams. With a view of the above, each site cum location and in even certain circumstances business unit on site runs specialised solutions or subsets of solutions. The business functions above cannot be considered exhaustive and can be extended to include core functionality such as the list detailed in Table 1.

These

Methodology: implication of theory and practice

A seamless, data enabled business optimization solution bring together all business functions, detailed in Table 1. This research proposes providing an optimum total solution fulfilling the above requirement.

The key solutioning approach would be based on a global template approach, wherein the generic business structure enables all requirements. The business may include diverse product operations with any concoction of products on different sites. The proposed generic template should be fully

An illustration of industry 4.0 enablement

A fundamental consideration of the enablement of industry 4.0 is the automation of all business processes. This is illustrated by the architectural and system landscape. Global logistical optimization can be a significant challenge, with a diverse global sourcing and delivery capability. Multi-site capacities producing similar products with sourcing, labour, operational and distribution diversity, operational maintenance and plant availability.

The process flow (refer to Fig. 7) illustrates a

Discussion

The ability to optimise a global business using Industry 4.0 is fundamental, with the ability to deliver a similar technological service globally significant. Adding to this the opportunity to develop solutions once, standardise and ensure a “single version of data” globally makes for a comprehensive Industry 4.0 solution. This paper outlines the delivery of an Industry 4.0 solution aligned to these goals. The delivery on comprehensive business functions, optimisation initiatives and

Conclusion

Multinational total business solution changes the way current single-disciplined applications are implemented. Total business solution benefits include but not limited to total global business integration for optimisation (Cheng et al., 1999). The toolset proposed accommodates the research objects:

  • business functions: Integration of all business functions; this includes the operations layer via the PCN.

  • optimisation initiatives: The solution provides for any optimisation initiative, these can

Acknowledgements

This work is partially supported by Natural Science Foundation of China 6171101169, Guangdong Natural Science Foundation 2015A030313782, Guangdong Education Bureau Fund 2017KTSCX166, the Science and Technology Innovation Committee Foundation of Shenzhen JCYJ20170817112037041, SUSTech Startup Fund Y01236215/Y01236115.

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