An increasingly competitive market will drive manufacturers to fully embrace digital transformation and pay attention to the trends leading the Fourth Industrial Revolution – Industry 4.0 – if they want to remain competitive. By Mike Russell.

The manufacturing industry is undergoing dramatic changes. Companies face growing demand to deliver quality products with minimum go-to-market time. A recent survey from Statista reveals that by 2020, the industrial manufacturing industry is forecast to invest more than US$175bn in Industry 4.0 endeavours. Therefore, the onus is on the businesses to embrace the required technological advancements in order to become more efficient and build a competitive advantage.

The Fourth Industrial Revolution encompasses a range of concepts, including the Internet of Things (IoT), Big Data, human-machine interaction through augmented reality and digital-to-physical transfers, and technologies such as 3D printing. The industrial IoT will further enable interconnectivity of technologies to create seamless manufacturing processes.

According to PWC, 86% of 2,000 manufacturers are expecting to see cost reductions and revenue gains from their digitisation efforts over the next five years. With investments in digitisation expected to reduce costs by 3.6%, manufacturing will evolve into smart factories with increased productivity and accelerated on-time delivery of products.

Game-changers in Industry 4.0

Big data is the emerging player in the manufacturing industry. The ability to collect, store and analyse data through cloud services and analytics solutions will enable businesses to successfully streamline information, subsequently increasing efficiency and accuracy, as well as providing better services and products. Retrieving actionable insights will become a growing source of economic value for businesses, no matter their size.

Additionally, using machine learning analysis to perform quick product enhancements and changes will become crucial to preserve high-priced assets and machinery. Leveraging the IoT to undertake predictive maintenance can accurately predict failure and reduce downtime for maintenance. With benefits such as decreased malfunctions, improved safety and increased efficiency, predictive maintenance will prove to be a game changer for manufacturers competing to stay relevant in the technology revolution.

Embracing the transformation

According to a Deloitte report, only 2% of Australian business leaders are highly confident that they are ready for the changes associated with Industry 4.0, in comparison to 14% of their global counterparts. On the other hand, 71% of Australian executives (compared with 40%percent globally) say they have people in place with the right skills to maximise their potential – the highest percentage of any country surveyed.

Within the manufacturing industry, skill proficiency in the likes of computer-aided design (CAD) and building information modelling (BIM) is critical in ensuring a business is responding to the changing demands of the industry by allowing complex products to be designed and manufactured faster than ever before. In the current digitised world, customer experience needs to be revisited as consumers are constantly connected to the industry.

Solutions like CAD and BIM are becoming a strategic imperative to increase customisation capabilities and improve production of bespoke goods at small volumes. By embracing next-generation manufacturing, businesses can leverage from the efficiencies of new processes to allow for mass customisation of unique products. Customers are now looking for companies with high-quality products and quick turnaround time; consequently, the manufacturers who prioritise production lifecycle with customisation will stay ahead.

Transforming your workforce

Industry 4.0 will change how manufacturing works and as a result; it will also change who is needed to work within the industry. Traditional skills like machining and tooling will remain valuable, but manufacturers will require employees with proficiency in fields like augmented reality, big data and robotics to get the most out of the new technology. To keep up with digitisation, current employees will need to prepare for more value-added responsibilities, as businesses must invest in up-skilling their facilities to be able to leverage the new technology and adapt to its implications.

Moreover, giving direct access to the information that the employees need the most will make them feel more connected and empowered. Training through collaboration platforms and tools will make it easy for employees to access data remotely and will also enable organisations to attract potential global talent in the future.

As Industry 4.0 emerges as the key digitalisation trend and continues to make a major paradigm shift in the manufacturing industry, it also offers opportunities for companies to optimise the production cycle and be efficient. For manufacturers, keeping up with the pace of digital transformation is critical for success. Industry 4.0 will continue to create changes, whether it’s through the use of machine learning analysis or big data extraction, and manufacturers must make sure that both their processes and workforce are evolving to meet these growing demands.

Mike Russell is the Chief Operating Officer at Central Innovation.