Is the manufacturing industry ready for the fourth industrial revolution?

First came steam and water power, then electricity and assembly lines, and then computerisation. As 2016 comes to a close and we look to the future, there’s one big question: What is next?   

The answer: the fourth industrial revolution, or industry 4.0 (4IR). 4IR will represent the combination of cyber-physical systems, the Internet of Things (IoT), and the Internet of Systems. In its simplest form, it is smart factories with machines that are connected to the internet and are part of a system that can visualise the entire production chain. Moreover, entities throughout the system can make their own decisions based on data analytics and artificial intelligence. While many are eager to embrace the dawn of a new era for mankind, there is one sector that is surprisingly lagging behind; the one that kick-started the first revolution – manufacturing.

Looking particularly at the U.K. manufacturing sector, it’s fair to say that 2016 has not been without its challenges. Fluctuating sector growth, the impact of Brexit, and apparent industry skills shortages have left a wave of unrest. As we look to the future, this is likely to continue again with the emergence of 4IR. A recent report from the Engineering Employers' Federation (EEF), the industry body for manufacturing and engineering, issued a stark warning that the manufacturing industry was in fact, ‘ill-prepared’ for the next wave of technological developments.

Following a survey of organisations, it revealed that only 42% of manufacturers were in fact prepared to embrace the new wave of technical change being brought about by the arrival of 4IR. Interestingly, these findings are not only consigned to this side of the Atlantic. Another report, Sprinting to Value in Industry 4.0, produced by U.S.-based Boston Consulting Group (BCG), uncovered the desire of manufacturers to adopt advanced digital industrial technologies. The findings, like in the U.K., demonstrate critical, obvious barriers that manufacturers will need to overcome, including defining an effective implementation strategy for 4IR adoption, as well as overcoming culture change within an organisation.

While caution to change is understandable, failing to act on such a momentous movement is really inexcusable. Over the past few years, technology has made it significantly easier to manage multiple facets of business. Almost every industry has or is going through some element of digital transformation that will make its processes smoother and lives easier.

Historically, one of the common issues manufacturers face is ensuring consistent quality across multiple plants that are geographically spread out. Manufacturers can have multiple plants producing the same product, all with varying degrees of quality and deficiencies. Many manufacturers believe adopting new software and processes across operations requires a large investment and, therefore, are unwilling to upgrade. This is especially true since many of their current systems would be tidied into a significant CapEx expenditure.

Many manufacturers are fairly mature in their specific industries and their technology hasn’t changed over the years. The use of legacy IT systems and the idea that ‘if it isn’t broken, why fix it’ permeate the industry with many manufacturers skeptical about the true benefits that the cloud can have for their business. It is therefore the responsibility of cloud providers to ensure manufacturers are adequately educated about the true benefits of cloud technologies so they will fully embrace 4IR.

For early cloud adopters within the manufacturing space, the benefits have been huge. These companies will most likely continue to reap the most advantages as the revolution gathers pace. The cloud can help to increase product quality across all plants, reducing the chances of costly recalls and damaged reputations. Cloud offerings can boost processing speeds, turning quality into a competitive advantage and increasing insight into suppliers’ operations to ensure they are matching the manufacturers’ high levels of quality. By adopting a Software-as-a-Service (SaaS) approach, a manufacturer’s CapEx expenditure is turned into a lower, predictable OpEx expense, offering the opportunity to reduce the overall costs associated with operating software.

Many manufacturers do recognise the benefits that digital technology can bring to their operations, with research from the EEF stating that 61% of organisations believe it would boost their production. A number of respondents, however, were concerned that they would not be able to keep up with the changes expected from the introduction of digital technologies into their plants. This hesitance, therefore, suggests that many manufacturers are happy to remain with the status quo, and in doing so, risk escalating the possibility of being further left behind by those manufacturers who embrace the digital revolution. This unwillingness to move to a unified system of quality control across manufacturing plants exposes these manufacturers to quality variables that can put the company in jeopardy of recalls.

Ultimately, 4IR is set to bring huge benefits to the manufacturing industry, but only if there is a willingness from the plant managers and executive leadership to adopt these new changes. The barriers associated with cost, training, and security can be easily counteracted by the speed, efficiency, and uniform quality that will be delivered across plants once the new systems are in place. Digitally transforming the manufacturing plant is the next step in the ongoing manufacturing revolution.   

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