In the landscape of modern manufacturing, the options available to aid companies on their Industry 4.0 voyage are plentiful and diverse. Ranging from straightforward applications that interface with machinery protocols to Software as a Service (SaaS) offerings tracking utilization and on-premise platforms orchestrating interconnected systems, the choices span a spectrum of complexity and investment. Each alternative carries its own strengths and financial implications. It’s within this matrix of possibilities that manufacturers tread to realize their ambitions. However, the linchpin for success lies not just within the technological avenues explored but in the unwavering commitment of the manufacturers themselves.
The bedrock of a fruitful Industry 4.0 journey hinges on an organization’s embrace of cultural transformation, prioritization, and paradigm shift. Without this internal alignment, even the most advanced technology can falter. Regrettably, there are instances of manufacturers who only pay lip service to Industry 4.0 adoption, dedicating token resources and time to yield a lackluster solution that merely fulfills an initiative’s appearance. Simultaneously, other companies erect barriers to shield executive management from disruptive change, championing the heralded evolution of manufacturing while skirting genuine engagement. Boards of Directors receive accounts of pioneering ventures, yet the promised outcomes often remain elusive.
For a company earnestly embarking on an Industry 4.0 journey, pivotal questions must form the cornerstone of their approach. These questions probe the essence of their market reach, sales projections, delivery reliability, product quality enhancement, defect detection, maintenance mitigation, human resources optimization, cost curtailment, traceability augmentation, innovation fostering, automation integration, production efficiency, quality consistency, regulatory compliance, and workforce empowerment.
Merely implementing rudimentary Red Light/Green Light monitoring fails to address these nuanced inquiries, despite its visually appealing allure. Astonishingly, several companies adopt such simplistic monitoring and leave it at that. Conversely, some corporations heed corporate mandates from above without gauging the resource commitments necessary to operationalize these directives throughout the organization. A significant number of companies invest copious resources in elaborate solutions yet struggle to actualize even their first dashboard or report after a year or more. Meanwhile, those opting for a “Safe Bet” approach dip their toes into Industry 4.0 through low-cost SaaS solutions, often underestimating future costs and security implications. Once engaged, extricating oneself from this commitment can be as daunting as the refrain from the iconic song, “Hotel California” – you can check out any time you like, but can never leave.
To triumph in the Industry 4.0 landscape, manufacturers must undertake a dual commitment: a cultural revolution and judicious technological selection. These two pillars, when properly aligned, address the most crucial facets of modern manufacturing:
1. Process Optimization: Iteratively refining production processes to eliminate bottlenecks, shorten cycle times, and enhance overall efficiency.
2. Quality Assurance: Instituting robust measures to minimize defects and ensure adherence to rigorous quality standards.
3. Lean Methodologies: Embracing lean principles to eradicate waste, optimize resource usage, and heighten operational efficacy.
4. Automation and Robotics: Seamlessly integrating automation and robotics to streamline tasks, mitigate human errors, and expedite production.
5. Employee Training: Establishing comprehensive training programs to empower manufacturing personnel, bolstering efficiency and output quality.
6. Sustainability: Implementing energy-efficient practices to curtail energy consumption and ecological impact.
7. Predictive Maintenance: Employing data-driven insights to predict maintenance needs, minimizing downtime and optimizing upkeep schedules.
8. Continuous Enhancement: Fostering a culture of perpetual improvement where employees innovate and tackle inefficiencies.
9. Cutting-edge Tech: Exploring advanced technologies like additive manufacturing, augmented reality, and digital twin simulations to elevate product development.
10. Agility and Customization: Crafting adaptable processes that swiftly accommodate shifting product requirements and consumer demands.
Elevating these aspects can propel manufacturers toward heightened productivity, superior products, and competitive advantages. Industry 4.0 acts as the conduit to these aspirations, its technology, and resources serving as essential enablers. Yet, the chosen technology must seamlessly meld with the intricacies of a company’s operational fabric. Simplicity alone falls short.
Now is a pivotal juncture to embark on a transformational journey that fuels sustained growth and prosperity.
Author Tim Smith, Director of Technology Adoption at Memex Inc., expounds on these principles and more. For additional insights, visit https://memexoee.com/.
In the rapidly advancing era of Industry 4.0, manufacturers must choose the right technology to optimize their shop floor and embrace the potential of digital transformation. While some may opt for quick-fix solutions like cloud-based SaaS monitoring systems due to executive pressure, they often find themselves disillusioned with the lackluster results and the absence of true ownership. In contrast, the perpetual licensing model stands out as a compelling alternative, offering data security and control and a lower cost of ownership in the long run.
SaaS Model: A Short-Term Solution with Long-Term Pitfalls
Many manufacturers, seeking quick wins and minimal effort, gravitate towards Software-as-a-Service (SaaS) models for Industry 4.0 implementation. However, likening this approach to joining a gym and expecting results without putting in the effort is an accurate analogy. The initial allure of low upfront costs and easy deployment can blind manufacturers to the long-term consequences of a SaaS-based system.
The true cost of the SaaS model becomes evident when calculating the expenses over a ten-year period. At $99 per machine per month, with 25 machines, the annual cost amounts to $29,700, reaching a staggering $297,000 over ten years. Shockingly, despite these significant expenditures, the manufacturer does not own any part of the software or infrastructure, making it akin to renting a service rather than possessing it.
Perpetual Licensing: The Gateway to Ownership and Lower Total Cost
In contrast, the perpetual licensing model offers a more attractive path to ownership and a lower total cost of ownership. Although the initial investment may appear higher, it pales in comparison to the cumulative expenses of the SaaS model over time. Let’s delve into the numbers for a clearer understanding.
With perpetual on-premise deployment, the licensing and deployment cost amount to $120,000 (for 25 machines) plus annual software maintenance of $12,900, totaling $129,000 over a decade. Adding these costs together results in a total cost of ownership of $249,000. While this number may seem substantial, it is significantly lower than the $297,000 spent on SaaS with no ownership rights.
Advantages of Perpetual Licensing over the SaaS Model:
1. **True Ownership**: Manufacturers gain full ownership of the software licenses by opting for the perpetual licensing model. This ownership grants them more control over customization, data security, and future upgrades, ensuring they are not at the mercy of a third-party provider.
2. **Data Security and Control**: Perpetual on-premise deployment guarantees data security within the manufacturer’s infrastructure. This level of control is particularly crucial for sensitive manufacturing data that needs to be safeguarded from potential cyber threats.
3. **Lower Total Cost of Ownership**: As demonstrated by the comparison, the perpetual licensing model proves to be the more cost-effective choice in the long term, offering considerable savings over the SaaS model, especially beyond the ten-year mark.
4. **Flexibility and Customization**: Unlike SaaS, perpetual licensing allows manufacturers to tailor the software to their specific needs and processes. This customization can lead to greater operational efficiency and productivity gains.
5. **Predictable Costs**: With perpetual licensing, manufacturers have more predictable costs, knowing exactly what they need to budget for the software and maintenance expenses without unexpected price hikes.
While the SaaS model may appear tempting at first glance with its lower initial costs and easy setup, it eventually reveals itself as an expensive and unfulfilling option in the long run. On the other hand, the perpetual licensing model proves to be a prudent investment, granting true ownership, data security, control, and a lower total cost of ownership. By committing to “own it” through perpetual licensing, manufacturers can confidently navigate the Industry 4.0 landscape, embracing the transformative potential of advanced technology while optimizing their shop floor operations.
Note to reader: The perpetual licensing model is reflective of MERLIN Tempus. Discounts on licensing increase with volume. The example for SaaS is a real-life example of a simple monitoring system costing more than a comprehensive operations management system. There is no denying the fact that there is cost justification in on-premise deployment with perpetual licensing. Furthermore, with emerging data of shocking data retention and egress charges, the scale is tipped fully in the direction of ownership and control.
As organizations navigate the treacherous landscape of data breaches in cloud environments, it becomes evident that the illusion of security is shattered. The Verizon Data Breach Investigations Report (DBIR) 2020 reveals an alarming surge of 43% in web application breaches, with over 80% of these incidents leveraging stolen credentials [¹]. Compounding the issue, nearly a quarter of all breaches involved cloud assets, with compromised credentials responsible for a staggering 77% of these cases [²].
Amidst these vulnerabilities, a stark reality emerges: the reliance on cloud vendors and third parties exposes organizations to potential security gaps beyond their control. The lack of complete oversight in securing and protecting access to data within cloud environments raises concerns about maintaining a robust security posture.
To address these challenges and avoid exposing the organization to expanding threats, an alternative solution presents itself: embracing on-premise machine monitoring systems. By adopting an on-premise approach, organizations regain control over their data security and mitigate the risks associated with cloud environments.
An on-premise machine monitoring system empowers organizations to establish stringent measures within their own infrastructure. By safeguarding sensitive information in their secure environment, organizations eliminate the vulnerabilities inherent in relying solely on cloud platforms. With complete control over data management, access controls, and security protocols, organizations can proactively safeguard against stolen credential data breaches.
Moreover, on-premise machine monitoring systems seamlessly integrate with existing internal IT security measures. By augmenting robust password policies and implementing multi-factor authentication (MFA) for all users, organizations fortify their defense mechanisms. Combining technology-driven solutions with comprehensive security training for employees further strengthens the overall security posture. By equipping users with knowledge and tools to identify and thwart social engineering attacks, such as phishing and vishing, organizations can effectively diminish the risk of compromised credentials.
Embracing an on-premise machine monitoring system not only addresses the vulnerabilities of cloud environments but also empowers organizations to take charge of their data security. By investing in their own infrastructure, organizations regain control over their security landscape, mitigating the risks posed by expanding threats.
In conclusion, the vulnerabilities of cloud environments and the reliance on cloud vendors and third parties necessitate a strategic shift towards on-premise machine monitoring systems. By adopting this alternative solution, organizations regain control over their data security, reduce the risks of stolen credential data breaches, and reinforce their overall security posture.
References: [¹] “Verizon DBIR 2020: Credential Theft, Phishing, Cloud Attacks” – CyberArk. Available at: [Link to the source] [²] “Stolen credentials, cloud misconfiguration are most common causes of breaches: study” – IT World Canada. Available at: [Link to the source] [³] “Tackling The Double Threat From Ransomware And Stolen Credentials” – Forbes. Available at: [Link to the source] [⁴] “How to Prevent Stolen Credentials in the Cloud” – CSO Online. Available at: [Link to the source]
MEMEX, with its visionary attitude, has been on the leading-edge of the convergence of the industry trends in Computing Power, Connectivity of Machines, Industry Standards, Advanced Software Technology, and Manufacturing Domain Expertise. MEMEX is the developer of MERLIN, an award winning IIoT technology platform that delivers tangible increases in manufacturing productivity in real-time.
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