New research from Siemens Financial Services (SFS) identifies six key challenges facing manufacturers in the process of moving to an Industry 4.0 model
A new research paper released by Siemens Financial Services (SFS) titled “Practical Pathways to Industry 4.0” has identified six key challenges facing manufacturers in the process of moving to an Industry 4.0 model. The research paper also found that digital skills and access to finance for digital transformation are the top two challenges to a successful transition.
“Considering financing possibilities early on and in the very first stages of strategy and planning will give manufacturers a wider range of options when managing the acquisition of new-generation digital technology,” comments Sunil Kapoor, MD and CEO, Siemens Financial Services Pvt Ltd. “Specialist financiers like us have a deeper understanding of the technology and assets required for transitioning to Industry 4.0, and its implementation – thus enabling investment while easing pressure on manufacturers’ cash flow and working capital.”
According to the research paper, implementing an Industry 4.0 model is likely to be achieved in a series of steps, rather than a wholesale and sudden change. SFS interviewed over 60 manufacturers and expert management consultants in order to understand the hurdles associated with the transition. Manufacturers identified six key challenges in the paper, which include (ranked in order of importance): Developing digital skills, access to finance for the scale of investment, creating a culture of collaboration, overcoming data and cyber security concerns, gaining comprehensive access to a broad enough volume and range of proof points and specialised strategic management capabilities to create a clear, phased plan to achieve Industry 4.0.
Building a practical plan for Industry 4.0 cannot be reduced to a single, simplistic formula since each company’s circumstances are different. Nevertheless, respondents agreed that a robust methodology is essential for building a sustainable plan for digitalisation and automation.
Respondents repositioned finance as an early consideration in building a practical plan for Industry 4.0. Considering financing possibilities as a first step in planning opens up a range of technology investment options to consider as part of an organisations strategy development towards their quest for Industry 4.0.
Specialist financiers have developed a set of financing tools – ‘Finance 4.0’ – that enable the transition to new-generation digital technology in a way that is affordable, sustainable and is designed to ease pressure on the manufacturer’s cash flow and working capital. The paper explores these specialist financing methods, including pay-to-access or use equipment and technology finance, technology upgrade and update, software finance, pay for outcomes, transition finance and working capital solutions.