Author: Anthony Turgman
Raise your hand if you’ve ever purchased equipment or been sold a solution that was never installed. Raise your hand if you’ve ever attended an equipment trade show and thought: “That would be really cool in my factory.”
I’ve been there too. Imagination runs wild, we consider all the possibilities, then we get caught off guard when it comes to implementation and the challenges presented become more than we anticipated. But we are invested in our ideas. We have big plans, grand visions. The possibility of change is alluring to most everyone. The problem is, what if there is something better out there? And that’s where one of two things happens – either we secure the capital to buy that solution, or we try to find comparable solutions that we can weigh against the one we’ve found (the dreaded analysis paralysis death march).
Almost every factory I have worked on, worked in, visited, or discussed with a colleague has a bone yard full of forgotten equipment. Frustration in the systems and “solutions” on which we hinge our operational success.
Truth be told, 87% of manufacturers waste on average $250,000 every year on ‘smart’ equipment or systems that sit idle – but the real scandal isn’t the tech, it’s the captivity trap manufacturers willingly walk into. As a former factory leader, I know the decision to choose an OEM partner is very difficult and often falls short due to the lack of clarity on what my true capital roadmap looked like. It’s tough figuring out what works
Here’s what most salespeople won’t tell you: 70% of Industry 4.0 digital transformation projects fail, and it’s not because the technology doesn’t work. It’s because manufacturers are paralyzed by the fear of making the wrong choice, getting locked into a system that holds their operations hostage, or not wanting to settle until they find the right solution.
In this blog, we will explore the various elements that not only serve to hold the industry back, but also serve to fragment the systems and technology we use to support those manufacturers choosing to adopt advanced manufacturing systems.
The Fear That’s Killing Innovation
Manufacturing leaders are stuck in a perfect storm. They know they need to modernize – 94% acknowledge a serious skills gap and face a projected 2.1 million unfilled jobs by 2030 (here’s that lovely stat again. Thanks, Search). Manufacturing leaders are absolutely terrified of choosing the wrong technology partner and becoming prisoners of their own investments or – now more than ever – choosing the “old tech” that is outdated by the time it’s implemented. Time to implementation is an entirely different issue we can cover later – but a very important part of decision making that often goes overlooked.
This fear is justified. For example, we were able to find that 60% of ERP projects fail, 80% of customers are unhappy with their current ERP, and 90% fail to deliver any measurable ROI. Well, what’s going on here? When your average manufacturing technology investment demands over $1,000 per employee in training costs and 64 training hours per person, the stakes are massive. Steep learning curves, high barrier to entry technology, resource intensive systems. Where are we going with all of this? It almost feels as if we are going backwards instead of forward.
The Captivity Trap: Four Walls of Digital Prison
Cyclical Captivity Is Back. Well, it never really left, did it?
The Sunk Cost Fallacy: Is there such thing as a sunk cost? Did I go to sleep and somehow wake up in Vegas? In all seriousness, this is a paradigm I still struggle with. Even now on the delivery end of solutions rather the receiving end I find it tough to convince myself and our clients that sunk cost is a lesson – not a handcuff.
But as a former factory leader, once I had invested hundreds of thousands or even millions in proprietary systems, switching became nearly impossible. Let me walk up (email, Slack, Teams – for those of you WFH) to my VP or President and tell them that I couldn’t deliver on my promise after getting them to buy into the idea – requiring them to risk their integrity. Not happening. We stick it out. Sunk cost or not, at some point it becomes more than that.
The average manufacturer faces switching costs that include not just new procurement costs, but installation and implementation costs, training expenses, and lost productivity during transitions. Can manufacturers afford to keep switching equipment on the floor? (The answer is no). Why is it then that every OEM wants to replace the competitor’s solution with their solution? Marginal improvements be damned.
Knowledge Dependency
This is a tough one to solve. Even I struggled throughout my time as a Maintenance leader. So, you lead a team of experts. They’re really good at this one system. Enter System 2. Well, 95% of failed company deployments dedicate less than 10% of their total budget to education and training, creating a workforce that’s highly skilled in systems they can’t afford to replace. So, where does System 2 fit in here? Why are we suddenly frustrated with why this thing just refuses to solve all of our problems out of the box. Wasn’t that what we were told it would do?
The jury is still out on that one.
Operational Entanglement
Show me an IT person that doesn’t lose their mind when new solutions are presented, and I will show you a world that doesn’t exist. I totally get it. Modern manufacturing systems create complex webs of dependencies. When your ERP, MES, and shop floor systems are all from different vendors with proprietary interfaces, changing one piece threatens to topple the entire operation. But wait, there is middleware, Edge API, and end points that can help with all of this. It’ll only cost me…what?
We don’t sign up for complicated. Sometimes we don’t even know it’s coming until it’s too late to make the change. The internal sales pitch takes so long – regardless of organizational size or agility – change is always a tough sell. Then why aren’t we made aware of the challenges only until after the ink has dried? And why does this keep happening to companies?
Vendor Entrenchment
We all know the culprits here. I am not going to name names. The biggest players in manufacturing solutions have been around for decades, either gobbling up smaller companies and growing by acquisition or often running with their preferred groups for generations. These partnerships become locked in, sometimes to the point of suffocation. We discussed Operational Entanglement above, but this is much worse. The freedom to choose and innovate beyond what “…we’ve always done” is lost and creativity gets written out of the lexicon.
This has positives to it. We know long-standing solutions are reliable and proven. We cannot deny this. However, if our collective desire is to push manufacturers into the next century (I think we’re finally approaching the 20th century in across US manufacturing), we need to challenge the status quo and push beyond what we have proven. Sometimes it takes risk to innovate. Or you can just try a new vendor for once. We might just know someone who can help with that.
The Controversial Truth: Most “Smart” Factories Aren’t
I think we stumbled on a random statistic when assembling our “justification” for our Labor 4.0 talk. Roughly 40% of automated manufacturing systems faced major tech failures in 2024, leading in to 2025. It was reported that 70% of downtime incidents were linked to technology breakdowns, not human error. I am sure that’s not all true as anyone leading a shop floor can attest to, sometimes those go hand-in-hand. Personally, I will never blame man when machine should arguably be much simpler to manage than it currently is.
Must I emphasize again that as manufacturers our focus is to push product out the door? In other words – if we aren’t producing, we are losing money. Most factory leaders know and understand the impact of downtime on their operation. So why would I ever sign my team up for extra downtime or production interruptions? How is it that 65% of automated facilities face delays of three to six months when reconfiguring production lines due to the need to “Go Smart”? If it isn’t “broke”, why should I “fix” it? I think we can stop trying to prove that flexibility – the supposed benefit of automation – often becomes its biggest benefit. Sounds like it’s the opposite.
The dirty secret? Half of small manufacturers report automation costs exceeding projections by 20%, and nearly two-thirds believe the skills shortage has seriously impacted their ability to meet customer demand. We’re not just failing to solve problems – we’re creating new ones. This is not surprising. We typically chase new and shiny with high hopes. I’ve said it before – the disillusionment is hard to catch when it comes to spending someone else’s money. It’s also incredibly appealing solving for the problems of today with technology from tomorrow.
The Live Solutions Approach: Breaking the Captivity Cycle
Enough with the negativity. Sometimes we just need to review what we already know to make sense of what to do next. I apologize for the sarcasm and nonchalant approach to proving why we are really bad at Industry 4.0. But look, we’ve watched this tragedy unfold across hundreds of manufacturing floors. And I am not talking about the big names – they have enough money to get it wrong hundreds of times (and never ask about their boneyards). But what we’ve tried to do is develop intentional tools to help manufacturers solve their problems with a straightforward, measured approach. We have in no way created this methodology, but we will take the liberty of trying to name it. Let’s call it the “Hybrid Reliability Cocktail” and let’s say it takes a more practical approach that combines:
- Old School Wisdom: Capturing the tribal knowledge of your workforce before it walks out the door. Don’t worry, we’ll share it with you.
- Tactical Technology: Implementing low-cost, interoperable solutions that don’t require proprietary training. And your team will thank you for it. I promise you can have fancy things too…
- Vendor-Agnostic Integration: Building systems that work together without creating dependencies. Unicorns do exist and it’s not always going to cost you more to find them.
We have to start somewhere. The truth is that a vast majority of manufacturing companies don’t have the basic technology to even limp towards Industry 4.0 implementations. Throw in the recent market volatility and the manufacturing industry is experiencing unprecedented cost pressures while fighting a $1 trillion economic impact from the skills shortage. The solution isn’t always more technology – it’s smarter technology implementation with intention that preserves your freedom to adapt, evolve, and maybe even change course when necessary.
The question isn’t whether you can afford to invest in automation. It’s whether you can afford to become a prisoner of your own technology choices or wait out the future until we all revert to mechanical equipment and paper reports. The choice is yours.
I would love to hear if this resonated with anyone. Have you ever been locked into a solution you grew to regret? Have you found yourself trapped by systems that promised freedom but delivered captivity instead? Leave a comment. Or don’t. No judgment on my part, but I can’t speak for anyone else on the internet. Those people are brutal.
Let’s talk about building systems that serve you, not punish you for buying them.
