The role of KPIs in Industry 4.0 and Automation in IoT

The role of KPIs in Industry 4.0 and Automation in IoT

Since the emergence of technological advances enabling the development of Industry 4.0, there has been a great deal of research and application case studies trying to determine the impact this technology will have on the industry.

I4.0 symbolizes the beginning of the fourth industrial revolution,

which is the first revolution that has been announced ahead of its inception. Based on concepts and technologies that include cyber-systems, the internet of things (IoT) and the internet of services, I4.0 processes include interconnections of the virtual, digital, and physical worlds and the learning in production. These connections include machines, products, services, information and communication systems and people. The result of I4.0 is more efficient, lean, and individualized production.

Adapting to this technology

implies challenges for any productive organization, and especially for those manufacturing industries that use traditional technologies such as the machining and heavy machinery industry. In line with the challenges identified in Industry 4.0, a study by Slovenian researchers asked the following question: How can KPIs contribute to a healthy and socially responsible implementation of Industry 4.0 in the industry? To do so, they analyzed dozens of companies that implemented 4.0 technologies and studied their relationship with KPIs. We will look at some of the key points that emerged from this research.

The essence of I4.0

is a comprehensive and structured use of the digital network of creation, logistics and use of products and services. The promoters of I4.0 expect this to lead to significant improvements in design, engineering, materials use and, above all, industrial manufacturing processes.
While there are many variants of technology involved in the I4.0 phenomenon, the following are the most relevant for the study of this phenomenon: Big data and analytics, autonomous robots, horizontal and vertical integration systems, Industrial internet of things (IIoT), the cloud and last but not least, virtual reality and simulation.

KPI in the implementation of I4.0

  • Review of indicators and results
  • Continuous improvement
  • Search for points of improvement
  • Define clear objectives of managing the production process
  • Define potential indicators and implement them
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Key performance indicators (KPIs)

Now, what is the role of KPIs in this technological change? There is a permanent need to monitor efficiency and effectiveness and a quick and clear overview of the current situation.
The requirements of digitalization and I4.0 indirectly force us to do so. As we mentioned, as it is a technological revolution that we are experiencing live and direct from our workplaces, we in the company must be able to measure the efficiency of new implementations and look for points of continuous improvement. For this we use key performance factors and a wide range of indicators for CNC monitoring solutions.
A performance measurement system is important. In order to be able to analyze manufacturing technologies, we need to develop a set of procedures and indicators that accurately and consistently measure the performance of activities and processes and the organization as a whole, and it is a vital aspect of business management.
So, in a nutshell, a performance measurement system must be able to provide data to track past and future results, and thus strengthen strategies. But how to properly manage such a complex task?
Fortunately, there is manufacturing automation software that facilitates all this work, collecting the information directly from the manufacturing teams, and returning the analyzed information in an agile and accessible format, suitable for quick analysis and decision making.
As the improvement process is never complete, the implementation of the model must be fed back to continue working towards continuous improvement. As the lean manufacturing model indicates, minimizing losses in production systems and maximizing value creation is the best way to work and efficient management of KPIs will help to achieve this.
The paper concludes that the benefits of KPIs (correctly implemented in the ambit of the I4.0 transition) are as follows:
which would be the basis for achieving a higher level of productivity and establishing a reward system based on performance
as there would be accurate data on capacity utilization or equipment availability.
leading to improved achievement of agreed production deadlines, as maximum production capacities could be specified and timed.
in the work and technological processes, which would significantly contribute to productivity gains.
In conclusion, it is possible to state that it is essential to monitor the implementation of new technologies with indicators in parallel, in order to correctly assess their efficiency and improve decision-making.