In manufacturing, near-term prospects will be influenced by household spending power, commodity markets and investment cycles. The list could go on but, of one thing we can be entirely sure, the fourth industrial revolution (4IR) is upon us and the future of manufacturing, in the UK and globally, is digital.
Technologists describe this as one system which links physical and cyber networks, allowing real-time information flow. This will enable intelligence and product insight to be discovered and acted upon quickly, boosting the value add to customers.
Manufacturers talk about 4IR in terms of using new technologies such as sensors, robotics and data analytics to gain insights into product use, improve productivity and improve competitiveness. This will usher in new techniques that will change the products, processes and relationships involved in every aspect of industry.
This is more than fancy factory jargon. Better customer experiences, higher levels of efficiency and more highly skilled jobs will be part and parcel of the 4IR journey. The opportunity is clear, but with this will come disruption to traditional business models, new models of supply-chain engagement and the need to also take employees on the journey. The UK cannot, however, opt out.
Manufacturers are taking steps on their 4IR journey. EEF’s Manufacturing Ambition survey published earlier this year showed that growth ambitions in the coming years will be underpinned by the development of new business models, including new services. There will also be greater focus on innovation, in both new products and processes, along with closer collaboration within supply chains and investment in new technologies.
That’s not to say that all companies are embracing the new technologies. The application of 4IR technologies is an area where many companies are still trying to understand how best to apply it to their own businesses with three distinct phases having been identified.
The first phase – conception – is when companies become aware of what it can offer and how it could apply to their business. The second phase – evolution – is a period when there can be some advancement on current practice. Concepts and off-the-shelf solutions can be implemented and tested, further optimising current processes and putting in place new solutions. The third, and final, phase – revolution – is when the step-change occurs in terms of how value is derived, and how interaction with customers and suppliers is delivered.
For those at the conception phase, optimising processes and supply chains is where some early wins will be found. The evolution of manufacturing processes and the revolution of the product and service offerings to customers will follow, but are likely to take place in fits and starts.
Sharing of best practice and encouraging its imitation will generate a lot of learning, and EEF is helping manufacturers navigate the complexities and challenges presented by 4IR and to take advantage of the many opportunities it will afford. EEF has launched Be Business Ready to help manufacturers explore and understand what 4IR is and what it means to them.
In addition to manufacturers adapting their own processes to meet this evolving challenge, there is a role for government. Industrial strategy has to play a part in enabling companies to learn, adapt and adopt more quickly; not just to keep pace with competitors, but to propel them to the head of the league table.
Sector deals, such as that led by Professor Juergen Maier on industrial digitalisation, should help inform this, particularly the deployment of new innovation resources from the Industrial Strategy Challenge Fund.
Despite the political turbulence and potential uncertainty, this is a very exciting time for industry in the UK and the economic gains are enormous.
