China and Industry 4.0

China and Industry 4.0

September 3, 2018

China is leading the world in implementation of Industry 4.0.

Industry 4.0 is a digital factory concept that promises to dramatically increase productivity, decrease inventory holding costs, improve quality, and increase forecasting accuracy.  The IT architecture has to be built around the company’s unique business needs and processes instead of building a strategy around a particular technology to make Industry 4.0 work.

Investments in Industry 4.0 should have a payback period of less than two years.

This post is based on the McKinsey article, Imperatives for China’s factories of the future, by Anil Sikka, August 3, 2018. Image source: Shutterstock / Phonlamai Photo.

Discussion Questions:

1.  Industry 4.0 requires a major investment in IT architecture, e.g. data, analytics, robots. Are there limitations to implementation of Industry 4.0 that were not mentioned in the article for companies in the United States?

Guidance: Review the concept of scalability.  Students should recognize that the costs of implementation may limit Industry 4.0 to larger companies.  Additional issues that should be noted are workforce availability to implement and operate the IT architecture, and the requirement for tighter supply chain integration.

2. What happens to break-even quantity when Industry Continue reading

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