Disrupted Supply Chains, Smart Technologies, Stalled Industry 4.0 Promises

The Fourth Industrial Revolution promised rapid social transformation with advances in smart technologies such as VR, AI, robotics, and 3D printing. Richard Markoff and Ralf Seifert of the International Institute for Management Development discuss why the revolution has stalled and their suggestions for accelerating it.

It’s been almost a decade since the term “”.fourth industrial revolution‘ was coined, but many people have never heard of it or don’t know what it refers to.

Also known as Industry 4.0, it is a way of explaining how connecting different advanced technologies will change the way things are made. One example is the integration of artificial intelligence (AI) into factory robots.

There is no formal agreement that we are living in this new era, but this shows that many people attach great importance to these developments and their potential. as follows. Increased steam power late 18th century, Use of electricity to power machines the end of the 19th century, and Shift to digital electronics It started in the 1970s.

These were defined by clear milestones. However, many emerging technologies can claim to be part of Industry 4.0. These include virtual reality (VR) and 3D printing that simulate what is happening on the assembly line. There are also lesser-known developments such as: digital twin – Virtual models that accurately reflect the behavior of physical objects such as wind turbines and aircraft engines.

Blurring the lines between the digital and physical worlds, “smart” or “cyber-physical” technologies can be argued to be part of the Fourth Industrial Revolution.

However, many companies seem to be failing to take advantage of these developments. Here we explain why and what changes are needed to allow these revolutionary technologies to reach their full potential.

Blurring the lines between the digital and physical worlds, “smart” or “cyber-physical” technologies can be argued to be part of the Fourth Industrial Revolution.

A stalled revolution?

A supply chain represents the entire system for producing a product, from raw materials to delivery of the finished product to the consumer. It is therefore instructive to examine the impact of Industry 4.0 technologies on these chains.

Measuring the economic impact of any particular technology is difficult. However, one thing we can do is see how it impacts corporate decision makers.

One of us (Ralf Seifert) recently investigation Or hundreds of senior managers. The survey asked executives for their views on supply chain management.

None of the top priorities listed by management are related to Industry 4.0. High-profile technologies strongly associated with the Fourth Industrial Revolution, such as AI and machine learning, Internet of Things, robotics, and 3D printing, are in the bottom third of the priorities.

Looking at online trends, we can see that searches for “Industry 4.0” peaked in 2019, but have since fallen to significantly lower levels.

There are several possible reasons for the disappointing adoption of Industry 4.0 by companies. 2020 survey by accounting giant KPMG Among all Industry 4.0 technologies, only cloud computing has shown to have reached an advanced (albeit still incomplete) level of implementation.

Other key technology benefits remain unclear for many companies. As daily pressures of service and cost take precedence, it takes effort to move away from familiar solutions. This is in line with the decline in the number of Industry 4.0 searches. Interrupted by the coronavirus pandemic, Suez Canal route to be closed in 2021, Flooding hinders rail transport And a shortage of shipping containers.

According to a 2020 KPMG report, less than half of business leaders are familiar with the term “Fourth Industrial Revolution.”

High risk, high scrutiny

Lack of awareness is one hurdle to adoption of Industry 4.0 technologies. the other one is, build a business case Spending on new technology solutions.

The more ambitious the technology, the higher the risk and scrutiny. Not all companies have leaders ready to champion and support innovation in the face of uncertain or unseen outcomes.

Industry 4.0 initiatives can also lead to workers’ resistance to change. After years of training to find solution providers for large enterprises, IT departments are reluctant to recommend niche solutions for small businesses.

One way to address this is to dedicate resources to building a separate team responsible for identifying and prioritizing Industry 4.0 capabilities. However, even then, it must be aligned with the company’s broader business strategy.

From Crisis to Opportunity

The unprecedented supply chain disruptions of the past two years have led executives to consider restructuring their supply chains. But more often than not, they choose to do this the traditional way.

Reshoring (returning manufacturing to the country of origin) and nearshoring (moving manufacturing to a nearby country rather than a distant country) have become popular options for companies. Companies looking to build supply chain resilience.

The unprecedented supply chain disruptions of the past two years have led executives to consider restructuring their supply chains.

Industry 4.0 technologies have a role to play in this transition. For example, the rethinking of global supply chains resulted from the need to reduce labor costs.

Driverless forklifts, or automated guided vehicles (AGVs), are one example of how robotics can mitigate rising costs elsewhere. Additive manufacturing, the industrial name for 3D printing, can simplify and reduce costs for production processes that involve two or more costly steps.

Cross-border supply chains will use digital platforms to improve their ability to track inventory—a term that encompasses everything from raw materials to finished goods—adding incentives to help move goods. This allows businesses to identify unplanned disruptions more quickly and respond appropriately.

The very supply chain malfunctions that have made headlines and perhaps slowed Industry 4.0’s near-term progress may ultimately prove to be the engine that delivers on its promise.

To Richard Markoff and Ralf Seifert

Richard Markoff is a US supply chain researcher. International Institute for Management DevelopmentHe is also a supply chain coach, consultant, entrepreneur and lecturer. He has a PhD in supply his chain management from ESCP Europe.

Ralf Seifert is Professor of Operations Management. International Institute for Management Development. His primary research and teaching interests relate to operations management, supply chain strategy, and technology management. He holds a PhD in Management Science from Stanford University.

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