The 4th Industrial Revolution - it's not all about technology

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The manufacturing sector is on the cusp of the 4th industrial revolution (4IR), bringing with it new technologies and techniques that will change the products, processes and supply chains involved in every aspect of industry.

But beyond technology there are also steps manufacturers must take to prepare their business to ensure any move towards 4IR is a success.

EEF’s work, in partnership with Oracle, and through our discussions with manufacturers and from focus groups, has found three key areas identified by Managing Directors and Chief Executives where they feel the culture within UK manufacturing will need to change to enable 4IR technologies to foster competitive advantage - all of which is discussed in our new report that was released yesterday.

These actions are linked less to technology, but are more to do with fostering the right culture for eventual technology investment to deliver expected benefits:

  • the culture towards innovation
  • the role of technology as part of business planning
  • the need for a reorientation of leadership away from day to day operations and towards shaping an uncertain future.

 

Culture towards innovation

Manufacturers are by nature innovators, they carve out niches and find ways to create value, enabling their companies to reduce the costs of production, boost sales and enhance margins.

Manufacturers have to constantly evolve in order to remain competitive and meet customer needs, and there is no sign that this requirement will change in the years to come.

Innovation is a resource intensive activity, and firms must choose where to focus their efforts. In some cases that will mean that companies adopt a cautious approach to certain aspects of innovation and investment. However, in order for 4IR to be a reality in the UK, and for the UK to become a major player in this arena, a fresh and perhaps different focus on innovation will be needed.

Twenty-nine percent of companies describe themselves as conservative when thinking about their approach to adopting new technology

IT – from back office to front and centre

The role of technology and the IT department within companies will become ever more important as more and more of the factory floor, processes, tasks and products become connected.

Manufacturers will increasingly need to think of themselves as digital companies, rather than viewing digital capabilities as an add-on to existing processes.

In many cases, the IT department is seen as the ones who provide essential IT support and maintenance. But they play an important role in helping firms to become connected, and the relationship needs to become more strategic within an organisation.

Nearly three-fifths of companies in our survey do not have a director or senior manager with responsibility for developing and implementing new technology solutions

Leading from the front

Nearly all the companies we have spoken to have raised the importance of business leaders in driving through change. The culture of innovation and the role of IT will not change unless it is driven and has buy in from the top.

While uncharted waters lay ahead, UK manufacturers are adept at managing change and manufacturers recognise that for 4IR to be a success, they must lead by example. Boards must outline a vision for the future, their ambitions and goals and drive this strategy through the business.

And this may not only be setting the vision within a company, but OEMs and supply chain leaders must also set out their views, in order for their suppliers to come with them on the journey.

Not all change associated with the 4th industrial revolution will be technology focused, there has been a clear steer from manufacturers that they recognise the need to foster the appropriate culture at all levels of the business in order for any endeavours to be a success. And, as no manufacturer is an island, there will also need to be this culture embedded in companies across supply chains for 4IR technologies to deliver the competitive advantage and step change in performance that can be achieved.

 

Read more on all of these areas in the EEF and Oracle report

The 4th Industrial Revolution (4IR): A primer for manufacturers

Author

Senior Policy Researcher

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