Opportunities And Challenges of Industry 4.0




Opportunities And Challenges of Industry 4.0

by,

Manoj Kumar Trivedi
Founder, CEO & Business Mentor
iGlobal Research and Analytics


Deeply concerned with FDI and income inequality, several advanced economies are implementing the concept of Industry 4.0, marking the Fourth Industrial Revolution. Business shift to other countries in search of skilled labors has a marked effect over economies of advanced countries. Such a move is in anticipation of reversed flows of foreign direct investment and a further manifestation of an already widening technology gap. 

Mr. Bernardo Calzadilla-Sarmiento, Director, Department of Trade Investment and Innovation at UNIDO (United Nations Industrial Development Organizations), emphasized the profound impacts that Industry 4.0 will have on society, factories, households, the public sector, on advanced economies and developing economies and economies in transition. While discussion has focused on what Industry 4.0 means for developed economies, less discussion is devoted to the impact on developing countries and economies in transition. There are developing countries that are already preparing for and adopting strategies regarding Industry 4.0, such as China and India. It is therefore important to take into account their experience. 

UNIDO has opined "....Taken together, these developments would lead to the emergence of more sustainable production and consumption patterns, and could thus provide opportunities for developed and developing countries to achieve economic growth and sustainable development in line with the 2030 Agenda for Sustainable Development. The consequences of Industry 4.0 on employment, wealth creation and distribution, are not fully understood. One of the biggest concerns is the impact on jobs in developing countries. Increasing automation of production processes and the displacement of workers by machines is likely to eliminate routine types of jobs, decrease demand for cheap labor in lowend manufacturing, increase inequality, and cause migration....."

They may be partially right.For being globally competitive, organizations of developing and developed countries may have to change the way they do business, but it can no way replace human consciousness. Robots, IoT, Computers, Digital equipments have no mind. They work on defined parameters. Intervention of Human consciousness is therefore inevitable, rather will be more intensive. The only difference will be IR4.0 will replace all existing skills. Talents will have to be re-skilled with relevant skill for being more analytical with logical conseqences meeting characteristic of IR 4.0. Talents will have to be empowered inducting "Industrial Democracy" for quick decision at the execution level. Deriving alternatives in the product and process for value addition, they have to be empowered for being more creative shunning objective heirarchy of commandment and rustic management principles. Digital equipments will remain supportive tool. Business models for being more efficient across functions has to be strategized.


They need to re-build the organisational structure which is efficient through value addition across all resources and dynamics of Supply Chain. No function could now afford to be supportive- be it HR, Accounts, Finance, Administration, Industrial Engineering etc. Direct intervention through business mainstream of operation and at shop floor level, collaboration & co-operation is the requirement for being globally competitive adding direct value to each unit of money administered. Linear business model has seen its days.

Challenges
Many organisations, irrespective of their success through numbers, are still actively exploring alternative metrics for measuring the long term health of their companies and the communities they serve, beyond just earnings or stock price, and boards are facilitating that shift by asking more qualitative questions: 

  • What are we doing on talent? What is our pipeline of innovation? 
  • How do our actions align with our mission statement? 
  • Are our customers satisfied? 
  • Are we contributing to our community and society as a whole? 
They may have acheived numbers and targets but such achievements when put to test through EVA for real time value, they are proved to be much behind with same numbers.

Underperformance conundrum still haunts them leading to blame game, adopting hire and fire policy and high attrition resulting into  "Low productivity and disengagement".

Basic reason of underperformance lies in lack of understanding of economy's stress point and operational economic fine prints to address ever changing macroeconomic implications.

PwC in its 21st CEO Survey report says- "While celebrating the prospects for global economic growth – at least in the short term – CEOs in every region report heightened levels of anxiety about their own organisation’s longer-term prospects for revenue growth as they confront growing stakeholder expectations and unprecedented threats that are not of the market’s making...".

Adopting new measures of prosperity that look beyond economic growth to social progress, and, fostering beneficial for technology in our society will create new industries and unforseen type of new jobs- jobs that will be more creative and fulfilling is set to replace all skills.





Too much focus on leveraging finance and customer analytics deflects our attention from leveraging operation causing  margin to diminish at the cost of growth.

Problems like-
  • Why savings made across board, clocks- off, leaving Business Leaders wonder where all the money gone?
  • Why profit does not commensurate change in sales volume, though each unit produced carry's same amount of profit?
  • What are the factors that determine average total cost of manufacturing which keeps on changing through days, weeks, months and years?
  • How to control ever changing variable cost to neutralize macroeconomic implications at micro level of operation?
  • Many more such questions.....

still haunts business leaders and CEOs.No effort has ever been made to address such value evading complex problems. 

Opportunities

Industry 4.0 has the potential to improve productivity and competitiveness, increase energy and resource efficiency and effectiveness and hence to protect the environment. It could, further enable the transition to a circular economy, or industrial economy in which end of life products are reused, remanufactured and recycled. 

The World Economic Forum considers that the current paradigm change goes beyond Industry 4.0: “The Fourth Industrial Revolution is characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres”. The technologies today include artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing. The crucial question is whether the combination and widespread application of these technologies would also result in a positive net effect for our economies and societies at large. Some of the challenges and opportunities of Industry 4.0 are on their way - and in some areas are moving at high speed.

Many will be correct in thinking that IT skills are the key prerequisite and will help to engage in automation, in Big Data Analytics, in connecting global value chains, in creating transparency in public administration, and in understanding how cyberspace will become a new dimension for governments, where traditional approaches will reach their limits. But that is not sufficient.


To meet all the characteristic of IR 4.0, Economic Value Engineering of product and process will be mandatory. No automation/sensor will be able to read economic behavior of all the available resources,neither will it has the ability to read operational economic fine prints. No science could ever replace human consiousness. 

But, high level of intellectualism too reduces leadership ability.So as the growth. Procrastination is the effect of high level of intellectualism. It reduces risk taking ability. Certainty blocks opportunities. Ever changing macroeconomic environment is uncertain.The world of uncertainty through disruption is engulfing fast, changing the way we do business in complex environment.World today lives in an ambience of known - knowns, known - unknowns & unkown-unkowns.

To counterbalance ongoing fast paced transition and shift, organisations have to improve their ongoing underperformance conundrum through economic reasoning skill and Economic business model. Future of Business building block lies in practical application of Business Economic principles deriving Business Econometrics measuring performance and margin and weighing decisions against real time cost while neutralizing macroeconomic implications at micro level of operation. Such model will help meet characteristic of IR 4.0 for economic value engineering of value chain through critical thinking, analysis, empathy, rational thinking at margin and creativity determining market determinants through alternatives across product and process as an opportunity cost.




A transformation is not a series of incremental changes. Rather, it is a fundamental reboot that enables a business to achieve a dramatic, sustainable improvement in performance and alter the trajectory of its future. 

Second to none across globe,going beyond general descriptive discourse, we take to the realm of realistic economic reasoning preparing for the future using Operational algorithm and econometrics with applied research across business segments. 

We help measuring prosperity with multifaceted matrix using Economic Engineering and Econometrics, a future busisness building block. Our two days highly specialized discourse will not only improve industrial underperformance conundrum but will also guide through Industry 4.0 characteristic and environment, preparing for the unkown and fast aproaching disruption. Our discourse is most suitable for Business Leaders, Entrepreneurs, Executives, SMEs, Employees and Intrapreneurs.

Located in India, we will be at your doorstep in the next given opportunity reskilling you and your talents with competitive edge taking forward your organisation to sustainable paradigm with most relevant Business Skill. Write to us at trivedi.k.manoj@gmail.com

-------000-------



Comments