If you’re a manufacturing executive, you’ve no doubt heard the term industry 4.0 for the past few years. But like big data, it’s a broad term without a specific definition to know whether or not you’re embracing it to set your company up for success. To better understand industry 4.0, let’s take a look at a couple of definitions and some recent survey results.
According to Deloitte, “Industry 4.0 encompasses a promise of a new industrial revolution—one that marries advanced manufacturing techniques with the Internet of Things to create manufacturing systems that are not only interconnected, but communicate, analyze, and use information to drive further intelligent action back in the physical world.”
BCG’s definition is even broader, “The rise of new digital industrial technology, known as Industry 4.0, is a transformation that makes it possible to gather and analyze data across machines, enabling faster, more flexible, and more efficient processes to produce higher-quality goods at reduced costs. This manufacturing revolution will increase productivity, shift economics, foster industrial growth, and modify the profile of the workforce—ultimately changing the competitiveness of companies and regions.”
With definitions this overarching, it should come as no surprise that adopting industry 4.0 practices is not an overnight change. Not only will it take years, it requires diligence and persistence to keep up with the inevitable changes industry 4.0 presents. Deloitte recently conducted a survey to determine how leaders around the world are managing through the fourth industrial revolution.
While there is still plenty of ambiguity, the survey highlighted that in the past year, executives have gained more clarity into the multi-faceted challenges presented by industry 4.0. This includes, “societal and ethical implications, the importance of clear vision and collaborative organizations, the tradeoffs of investing in technology for the short term rather than the long term, and addressing the talent gap.” Below are findings from the study.
Executives express a genuine commitment to improving the world
“Societal impact” is rated as the most important factor when evaluating their organizations’ annual performance, ahead of financial performance and customer or employee satisfaction. In the past year, 75% of respondents said their organizations took steps to make or change products or services with societal impact in mind. They are motivated by the promise of new revenue and growth, but split on whether such initiatives can and will generate profit.
Executives are struggling to develop effective strategies in today’s rapidly changing markets
The ever-increasing array of new technologies is leaving leaders with too many options from which to choose and, in some cases, they lack the strategic vision to help guide their efforts. Organizational influences also challenge leaders as they seek to navigate Industry 4.0. Many admitted their companies don’t follow clearly defined decision-making processes, and organizational silos limit their ability to develop and share knowledge to determine effective strategies.
Leaders continue to focus more on using advanced technologies to protect their positions rather than make bold investments to drive disruption
Some businesses that have made investments in technology are seeing payoffs, while others find it difficult to invest at all—even as digital technologies are engendering more global connections and creating new opportunities within new markets and localized economies. Whether it’s because they are too focused on short-term results or they lack understanding, business cases, or leadership vision, executives are struggling to actively address these challenges. Further, business leaders and governments continue to wrestle with how to regulate Industry 4.0 technologies.
The skills challenge becomes clearer, but so do differences between executives and their millennial workforces
Last year, 86% of respondents thought their organizations were doing enough to create a workforce for Industry 4.0. This year, as they recognize the growing skills gap, the number dropped to 47% who are confident in their efforts. On the bright side, twice as many leaders indicate their organizations will do what they can to train their existing employees rather than hire new ones. And they’re more optimistic than last year that autonomous tech will augment, rather than replace, humans. But Deloitte’s Global’s annual millennial survey notes that leaders and employees (particularly younger ones) differ on which skills are most needed and who is responsible for developing them.
If you’d like to learn more about preparing and staffing for Industry 4.0, send us a note. And if you’re in manufacturing and looking to fill an executive opening, our team of executive recruiters can help. We have a depth and breadth of experience across public and private companies.