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Indiana manufacturers are making significant investments in Industry 4.0—technologies that can help them gain insights and efficiency improvements previously not possible.
The emerging challenge: Making sure employees have the know-how to unlock the technology’s full potential.
It’s an important task for a manufacturing-heavy state like Indiana.
According to the National Association of Manufacturers, about 19% of the state’s workforce is employed in the manufacturing sector, making Indiana the most manufacturing-intensive state in the country. As of 2022, the association says, the state’s manufacturing workforce included 543,813 employees and 7,847 manufacturers.
“We see adoption of investments in technology—now, what we want to see is advances in digital skills,” said Mitch Landess, vice president of innovation and digital transformation at Indianapolis-based Conexus Indiana. “It’s becoming increasingly clear that [technology adoption and workforce training] need to be tied more closely together.”
Although much remains to be done on that front, numerous groups are working to advance both technology adoption and related workforce development in Indiana’s manufacturing industry, especially among the small companies that represent the bulk of Indiana’s manufacturers.
Among them is Conexus, an initiative that supports the state’s advanced manufacturing and logistics industries, as well as Purdue University, Ivy Tech Community College, the West Lafayette-based Wabash Heartland Innovation Network and the Indiana Economic Development Corp.
“It’s an all-of-ecosystem effort,” said David Watkins, the IEDC’s vice president of entrepreneurship and small business.
StarPlus Energy in Kokomo, a new joint venture between Stellantis N.V. and Samsung SDI, has tapped into a few of these efforts as it gears up to begin production. StarPlus will make lithium-ion battery modules for Stellantis. The plant expects to begin producing sample products for Stellantis this summer, with full production set to begin early next year.
Ivy Tech’s Kokomo campus invested in equipment that StarPlus maintenance technicians trained on late last year to prepare for the plant’s startup. Ivy Tech said it expects to train additional StarPlus employees as the company ramps up employment.
StarPlus also tapped into the state-funded Manufacturing Readiness Grants program to purchase “smart manufacturing” training kits and curricula for students at Lewis Cass Polytechnic Academy, a high school in Galveston.
Josh White, senior training and development specialist at StarPlus, said the plant’s advanced manufacturing technology includes production equipment with sensing capabilities that have machine vision for quality control. The machine vision will detect product defects and irregularities and will be an alternative to humans doing visual inspections, White said.
Even for experienced maintenance technicians, White said, operating in an Industry 4.0 workplace requires additional training. “Industry 4.0 is all about information. It’s ‘How do you digest supplemental information?’”
What is Industry 4.0?
Exact definitions can vary, but in general Industry 4.0 refers to the use of technology that brings connectivity and digital capabilities into the manufacturing process, allowing for insights that would not otherwise be possible.
As one example, an automaker could use Industry 4.0 technology to gather data from different parts of its production line, giving employees an overview of the entire system at once.
“You’re looking at all the machines at the same time,” said Stephan Biller, the Harold T. Amrine distinguished professor of industrial engineering at Purdue University. Biller and fellow Purdue engineering professor Ajay Malshe co-chair Purdue’s Excellence in Manufacturing and Operations initiative, which is focused on physical, digital and sustainable manufacturing.
Having this whole-system overview could help a company more quickly identify and address production bottlenecks—a big challenge for any manufacturer, especially at a huge operation that might encompass a million square feet or more.
“The bottlenecks move around constantly, and the data you’re collecting for Industry 4.0 is helping you identify where those bottlenecks are,” Biller said.
Industry 4.0 technology can also include cobots—small robots that can work alongside humans and that can be programmed for different tasks as needed. Or equipment sensors that collect performance data for a particular machine, helping the company schedule preventive maintenance and avoid breakdowns.
The technology might also entail a system that helps track the flow of inventory throughout the shop floor, showing real-time information on which production employees need a fresh delivery of parts.
Signs of progress
Not long ago, many Indiana manufacturers were behind the eight ball when it came to Industry 4.0.
A 2022 report from Conexus and Indiana University’s Kelley School of Business at IUPUI said that, as of 2020, many Indiana manufacturers had not started adopting Industry 4.0 technologies.
Only 15% of respondents said they had implemented at least one Industry 4.0 technology, while 6% said they were conducting their first pilot project. And 31% said they had no foreseeable plans to adopt such technologies.
Some survey respondents said they had not heard of Industry 4.0 and didn’t know what it was.
Only two years later, the situation was already evolving. By 2022 (the most recent year for which information is available), 32% of respondents said they had implemented at least one Industry 4.0 technology, and 26% said they were conducting a pilot project. Only 4% said they had no foreseeable adoption plans.
“We’re doing a lot better than we were,” Watkins said.
Conexus is currently working on its 2024 Industry 4.0 report, which is due for release in August.
Watkins and others credited the state’s Manufacturing Readiness Grants program as one factor boosting Industry 4.0 adoption.
The IEDC, in partnership with Conexus, launched the program in 2020 to encourage manufacturers to modernize their operations with advanced technologies. A company can apply for grants more than once, with a lifetime cap per company of $250,000. Grants require at least a 1:1 match by the company.
To date, 526 grants—$56.9 million in total funding—have been awarded in 79 counties. Combined with the private investment grant recipients have made, Watkins said, the program has spurred $800 million in spending.
The program is on pause until July 1, when the state’s new fiscal year begins and $20 million in Manufacturing Readiness Grant funding becomes available. More than 300 parties have already expressed interest in applying for the next round of grants, Watkins said.
Unlocking the potential
Once manufacturers invest in new technology, they need to be sure their employees know how to get the most out of it.
To use a simplified analogy, an individual who upgrades from a flip phone to a smartphone can continue to use that smartphone for just phone calls and texting. But if the person wants to tap into the smartphone’s advanced capabilities—the internet connectivity, the camera and alarm clock, the customizable display options—he or she will need to learn how to use them.
Likewise, if companies don’t know how to tap into the complexities and capabilities of their new technology, Landress said, “they’re getting benefits from the investment, but they’re leaving some of the value on the table.”
Industry 4.0 technology is typically highly customizable and generates lots of data companies can use to glean insight about their operations.
“All of that data is great—but if you don’t do anything with it, it is sort of a useless investment,” Biller said.
With that in mind, Conexus and Ivy Tech have just started working together on a project to develop training that’s better suited for the era of Industry 4.0.
“What we’re seeing is, this digital transformation is truly transformational,” Landess said. “It’s across the workflow. And so you need less skills on operating the equipment and more skills on maintaining the equipment, optimizing the equipment, installing the equipment, choosing the equipment, looking across the workflow. We’re trying to figure out how to change that.”
Starting this month in Terre Haute, Ivy Tech and Conexus are having conversations with employers about their Industry 4.0 training needs and how Ivy Tech might help address them.
Similar to the work it’s doing with Ivy Tech, Conexus is also working with Purdue to help it connect with manufacturers on training and workforce development.
Conexus is also helping the university make connections within the Indianapolis region as it builds its presence here as part of the split of IUPUI into separate Indiana University and Purdue University operations.
Malshe, the co-chair of Purdue’s Excellence in Manufacturing and Operations initiative, said the university is opening an office at Indianapolis’ 16 Tech Innovation District this summer, in part to be close to Conexus. Conexus also operates from offices at 16 Tech.
“Bringing people together physically is very important,” Malshe said.
An ongoing effort
Though much has been accomplished, those involved in the transition toward Industry 4.0 say they still see a long road ahead.
Even with the success of the Manufacturing Readiness Grants program to date, Watkins said, fewer than 7% of Indiana manufacturers have taken advantage of the program. “There’s definitely a sense that there is more work to be done.”
The challenge of technology adoption can be especially difficult for small to medium-size manufacturers, which make up the majority of the state’s manufacturing base.
An independently owned 50-person manufacturer, for instance, likely doesn’t have the resources, time or expertise to easily determine which technology will give it the best return on investment or how to best use that technology.
“They’re kind of at a loss: ‘How do I start? Where do I start? How do I show ROI?’,” said Greg Ottinger, vice president of strategic partnerships at the Wabash Heartland Innovation Network.
Founded in 2017, WHIN is a not-for-profit working to advance digital adoption in the agricultural and manufacturing industries in a 10-county area centered in Tippecanoe County. In April, WHIN earned a TechPoint Mira Award for its efforts.
One way WHIN is helping advance Industry 4.0 is through its Manufacturing Alliance, a membership group that currently includes 41 employers. For a $500 annual fee, these members gain access to a vetted list of technologies that WHIN has deemed most likely to be useful, and the members can also receive discounts on the purchase of those technologies.
The idea, Ottinger said, is to ease some of the burden involved in figuring out which technology to invest in. “We’re doing the R&D homework for you,” he said.
(WHIN also has a similar program for local farm operations called the Agricultural Alliance.)
Several months ago, WHIN launched a program to help manufacturers implement Industry 4.0 technology once they’ve made the investment.
The program, called Innovation as a Service, offers Manufacturing Alliance members the chance to hire WHIN to help implement new technology and train staff on its use. Costs range from $10,000 to $100,000, depending on project demands.
Taking the larger view, Purdue’s Biller said part of the challenge for smaller manufacturers lies in the type of technology currently available.
Using a transportation analogy, Biller said much of the current Industry 4.0 technology is like a Cadillac—stuffed with options, at a premium price. What small manufacturers need, he said, might be more like a scooter.
“Some of these tools are just too complex. They’re too expensive, and they’re too complex,” Biller said. “If I have a machine shop with 20 people, I don’t need the same sophistication that I use for a 2-million-square-foot facility.”
This is a market problem, Biller said, and one that has yet to be solved. “I don’t think that we really have found the right answer for that yet.”•
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