Industry 4.0 -- Is Your Organisation Ready For The New Revolution?
The manufacturing sector, from automobiles to consumer electronics and a lot more, has seen high-growth in recent years. India will be among the top three world manufacturing destinations by 2020 with marked rise in its contribution to the country’s GDP.
In this impressive growth forecast, the role of ‘Industry 4.0,’ or the Fourth Industrial Revolution, is yet to be clearly defined. A decade ago Artificial Intelligence (AI) and a digital revolution was futuristic. But today they are very much real. Technology is taking over monotonous and unskilled jobs, not only routine assembly-line tasks but also complex creative jobs.
The manufacturing sector survives on its critical resource, ‘Human,’ to optimise the use of its other four resources - Money, Machine, Material and Method - to produce anything from specific parts to the entire product. However, as new technologies and systems like Industry 4.0, Blockchain, Internet of Things (IoT), Additive Manufacturing, Electromobility and Artificial Intelligence (AI) emerge, the human role becomes negligible in the manufacturing ecosystem. The driving force behind this is the premise that machines will do better than humans.
These systems are changing the entire dynamics of the manufacturing sector. Competition no longer relies on experience or expertise but on the adoption of digitalisation and creation of necessary skill-set. With the new wave of digital revolution, organisations need to distinguish themselves in the adoption of technology across the enterprise rather than for any particular system.
Industry 4.0 has brought about a big change in the manner technology is adopted. Innovation refers not just to a new concept or tool but to the holistic change in the way technology is used to automate factory operations. Robots work along workers to optimise production, while autonomous vehicles change the driving dynamics.
Industry 4.0 is changing the way cars are conceptualised and produced. The potential of autonomous or driverless driving has made many OEMs make significant investments. In some countries ride sharing has led to a drop in the number of new driving licenses as many prefer ride sharing to driving. This revolution also triggers the use of greener fuels and electric transmission to reduce the carbon footprint and enhance passenger safety.
A cohesive system of networks and technologies operated by a skilled workforce are the core of this industrial revolution. Just like any change, it has its share of resistance and acceptance.
The adoption of Industry 4.0 has several advantages and it offers many opportunities: better profitability, reduction in overheads, deeper customer relations, increasing growth opportunities, and use of data as a competitive advantage.
Better profitability: For a business, Industry 4.0 acts as a major reason for the adoption of a new practice. With the successful implementation of a digital transformation, companies can integrate products and services better to generate additional revenue and profit.
Reduction in overheads: Industry 4.0 can help reduce cost by introducing smart manufacturing initiatives such as integrated planning. Technological systems combine and analyse data for timely alerts on inventory levels, changes in customer demand, optimum asset utilisation, maintenance of key assets and programming repair and maintenance schedules, among others.
Deeper customer relations: Digitisation can help companies place the customers at the forefront and customise their products according to their individual needs. A detailed network of technological systems and data analytics can help companies understand their target market more deeply and customise their products for enhanced loyalty.
Increasing growth opportunities: With technology taking the place of human beings for basic organisational tasks, people will now be able to focus on innovation and other significant activities.
Use of data as a competitive advantage: The depth and quality of data will keep improving making it very valuable. Better data implies better artificial intelligence (AI) and therefore, better performance which will provide a significant competitive advantage to companies.
The adoption of Industry 4.0 has several challenges, including changing the cultural mind-set, tackling the training gap, ensuring data security, and enterprise-wide data integration capability.
Changing the cultural mind-set: Organisations that have been running their operations in a certain manner are more likely to resist change and step away from their trusted manufacturing process. Here, before the technology can be adopted, the top management needs to have a clear vision of the future and its role in it.
Tackling the training gap: Adoption of digitisation in the correct manner requires a specific skill-set that is still insufficient at the workplace. India dominates the industrial factories with the strength of its workforce, but often lags in certain skills. Training and skill development across categories such as data visualisation and analysis can be considered a challenge in the adoption of new systems.
Ensuring data security: With digitisation taking precedence, data security is a critical factor for every organisation. Solutions need to be in place to avoid operational disruptions caused by data theft, data loss, cyber-hacking, loss of intellectual property, violation of user privacy and other data concerns.
Enterprise-wide data integration capability: With outsourcing operations playing a big part in the manufacturing sector, many organisations lack the capacity for integrated data analytics. A lot of companies have poor quality of data or no data. Several others lack the ability and systems to process and analyse data. For them adopting digitisation may be a tough ask.
Industry 4.0 is here and it’s here to stay. Ignoring it is not going to help as digitisation is going to become the new norm. Early adopters and first movers will have the advantage to build customer relations with benchmark products.
For the manufacturing companies, overcoming challenges will be made easier with the right data governance and analytics development. Data analytics is the core of this revolution. Unqualified data dilutes the quality of information. The availability of quality data along with a skilled workforce in data analytics can lead better the change to Industry 4.0.
A profitable transformation will require technology providers to work in sync with manufacturing veterans and this should be done immediately. Organisations need to commit to the implementation of Industry 4.0 and make investments now to avoid obsolescence and huge capital cost later.
Digital transformation does not happen overnight. It needs gradual, step-by-step implementation. A checklist is given below:
Know your digital capabilities and set achievable targets in blocks of 3-5 years for improved adoption in line with company goals.
Run a small project on the concept of Industry 4.0 to highlight major areas of weakness and strengths.
Draw up a plan to overcome the weaknesses observed and to streamline the entire business process.
Make data analytics your best friend by delving deep into it while simultaneously training your employees in enhancing their data analytics skills.
Draw up a clear vision for the future with well-defined goals and targets to enable harmony within the organisation.
The Human Resources (HR) division in every organisation will be a critical force to spearhead adoption of digitisation and set the ground rules for Industry 4.0. Changes in skill levels, competition and growth imperatives will increase the demands on the HR division which has to create the employee support to take the organisation forward.
HR has to build a strategic, talent-centric and skilled team of employees. With competition on the rise and every organisation in pursuit of the best talent to boost adoption of Industry 4.0, HR will have to move beyond traditional measures of salaries and perks to attract, engage and retain the right employees. Strategies and incentives such as training opportunities, holistic work atmosphere, health benefits and other features are sure to see a step up in companies in the future.
Reaching New Heights
The manufacturing industry is amid revolutionary technology systems that emerge at an unprecedented pace. To remain competitive, the manufacturing companies have to adapt to them now. The fourth industrial revolution will transform the traditional manufacturing companies into digital enterprises led by data-based and customised physical solutions. It will also change the dynamics of the entire industry by integrating customers, manufacturers and suppliers across industries.
(This article first appeared in the Anniversary Edition of Auto Parts Asia, Jun 2018)