The 4th Industrial Revolution
Many industry observers say that we are in the early stages of a 4th Industrial Revolution (4IR). This is the fusion of modern digital technologies, such as IoT, robotics and cobotics, augmented reality and virtual reality, and AI, with product design, production, and logistics, and also throughout the life of the product. The 2017 Made Smarter Review (MSR) highlighted the significant economic benefits that digitalizing UK manufacturing could achieve:
“The work undertaken for the Made Smarter Review found that the positive impact of faster innovation and adoption of IDTs could be as much as £455 billion for UK manufacturing over the next decade, increasing manufacturing sector growth between 1.5 and 3 percent per annum, creating a conservative estimated net gain of 175,000 jobs throughout the economy and reducing CO2 emissions by 4.5 percent. Overall, from the data and evidence collated, we are confident that industrial productivity can be improved by more than 25 percent by 2025.”
Predicted benefits for manufacturers include increased efficiencies, better connection with customers through more personalized products, lower environmental impacts and more successful innovations and services. BSI research suggests that to achieve these will require digitally connecting manufacturing supply chains end-to-end throughout the life of the product. This connection will not just include machines, but also the behaviours and expectations of the people working in the companies. The fourth industrial revolution will be just as much about digital technologies changing behaviour of people as it will be about developing and adopting new technologies.
The MSR identified poor levels of digital adoption by UK manufacturers, particularly by SMEs. BSI looked into this and identified a number of reasons that contribute to this. We found that:
- There are perceived unknown risks with adopting the technologies. Many SME senior managers are well aware of the dire consequences of getting an investment decision wrong, and the impact this could have on their balance sheet, reputation with customers, and disruption to day-to-day business.
- Many managers within SMEs are very cautious about dealing with vendors, and very aware of being sold a solution that does not do what is advertised, and in fact may be highly unsuitable or prohibitively costly to implement. They often feel they are not equipped to properly investigate potential solutions and discuss their true implications with the vendors offering to sell their services.
- There is a lack of confidence in using the technologies. The SME senior managers are well aware they need to change their internal operations and put data at the centre of their business. It is not clear how to do this, however, and this acts as a brake on investment.
Clearly there is work to be done in creating a much more vibrant and confident marketplace among manufacturers for digital tools and services. At the heart of this should be a good quality management system operated by each company, which can lead to a number of benefits:
- Continual improvement in cost management
- Winning more new business
- Satisfy customer requirements more effectively
- Create a safer, more sustainable and resilient business
- Show effective governance
- Work better with the supply chain
The link between the benefits of digital adoption by manufacturers and their QMS is obvious, and BSI can drive forward the rate of investment in these technologies by helping to create an environment where there is more trust and confidence, and reduced risk.