Originally published on LinkedIn Pulse.
We’re living in an unprecedented time of fundamental changes to both society, economics and business. When change is forced upon us at this pace it’s clear to see the major failings of our current infrastructure such as healthcare and goods distribution. These legacy systems have worked for many years in periods of relative consistent growth but as we enter the unknown future two things are very clear:
- Successfully emerging from this current situation will be dependent on an organization’s ability to adapt and shift – breaking away from the existing processes that are crippling slow moving and heavy organizations.
- The future is ready to be re-defined by those organization that will embrace change and diversity, adopting more open, systemic and agile ways to inquire into future possibilities and guide decision making.
From where we stand, nowhere is this more prevalent or timely than our beleaguered manufacturing industry, global supply chains and labor force.
The Bigger Picture
The Industrial segment has faced challenges for many years and has been in need of reinvention even prior to the onset of the current situation and global crisis. The cause of this being not only an outdated system that is finding it hard to adapt but also an increasingly changing market landscape and demand.
We no longer live in an industrial society; we live in a service- and information-based society that requires a very different set of needs compared to the past. Today’s demands for a more inclusive, sustainable, and contextually adaptive ways of consuming services and goods are not readily supported or fulfilled by our accustomed industrial development model.
We see three main influences affecting this stasis and driving the growing need for change. These cover aspects from social demands to systemic thinking and long term sustainability for business growth:
1) The Challenges of Continued Growth
What we are all experiencing is the breakdown of a development model that is exposing the fragility of the industrial systems we still largely rely on and these symptoms begin to manifest in society years before the economic impact of the COVID-19 pandemic. According to the IMF the global economy is in a synchronized slowdown driven by reduced manufacture needs and global trade. In this context “business as usual” won’t provide a long-term strategy for development.
The existing economic and production paradigm appear to have exhausted their social incentive and ability to produce “progress” and therefore is in need of ‘re-direction.’ It’s time to redefine purpose and re-aligning production with the needs of society and the planets ecosystems.
2) New Social Demands and a Threatened Labor Force
The fabric of our societies is being tested to its limits and the demand for equality, responsiveness and social inclusion is driving a new agenda while creating tension between some of our previous behaviors and workforce practices. There are a few consequences of our old ‘industry habits’ that are perhaps worth mentioning as they have restricted the ability to adapt as a work force and the adoption of technology for growth.
The first is the progressive drying-up or regional economies and centralization of wealth and labor activities to specific areas of the globe, which results in inequality in access to jobs, services and resources.
The second is the rise of a labor force fearful of technological innovation and that has been given very little the space to develop themselves into useful and proactive participants in the ruthless quest for efficiency in a changing industry.
These complex and interrelated issues have tangible consequence in our communities and economies that we must somehow learn how to address. Indeed, systemic and regulatory solutions might be required to properly address them. Nevertheless, we also believe industry and design play a fundamental role in the process of rethinking and re-configuring the relation between labor, technology and value.
3) The Sustainability Agenda
As responsible consumers face the reality of a planet facing increasing threats from the endless exploitation of natural resources, they understand that mass production and consumption is not sustainable. A clear understanding that the limitations of today’s global economy doesn’t foster an equal share of wealth and fulfillment for the many is a clear sign that more of the same is not good enough for anyone.
Add to this the accelerated changes caused by the global pandemic to society, economics and business, and we’re standing at a moment where a broken system is facing a choice. Can we continue to plaster up the cracks and keep this aging global engine ticking over? Or, do we accept that the best course is to replace the entire thing and invest in the future?
This is a decision we’ve been partnering with our global clients on and see the choice as a very clear one: adapt and change or continue into slow oblivion.
Where is Industry 4.0 in All of This?
Exactly. Like 5G and IoT, it’s a complex and sometimes intangible web of initiatives and tools that inspire change but are still in its formative years in regards to its own large scale roll out and influence across the industry sector. Many organizations claim to be working with Industry 4.0 technologies, but few have managed to truly embed these new practices into day to day business at scale and make an impact — the transition is incomplete.
Information and automation technologies already provide several opportunities for the design and configuration of alternative forms of production and service supply. Nevertheless, these innovations appear still largely to follow accustomed ‘industrial’ practices and organization.
It’s time to focus on purpose and make proper use of these new capabilities. To create the shift in momentum required to set industrial manufacture up for the future is hugely important to make the jump and now (more than any other moment in the progress of industrialization) is the time to invest in this future before it’s too late.
Three Futures that will Accelerate the Implementation of Industry 4.0
With global supply chains undergoing immense pressure due to restrictions, tariffs and workforce uncertainty we will see a renewed interest in building more resilient and self-sufficient infrastructure. New synergies between global industrial networks and more flexible local entities will allow the ability to adapt fast and will be enabled through the fluid transfer of information and digital manufacturing technologies. The benefits to this model are not only physical resilience but also a reduced consumption footprint and more flexible organizational structure.
Another aspect of the changing industrial landscape will be the need for focus. In a future where agility and being able to adapt is a clear differentiator, organizations that build partnerships and trusted networks will better positioned and this focus will encourage innovation through collaboration. This new openness and cross-organizational synergies will lead to a reconfiguration of the entire e2e offering and value chain as organizations focus on their core offerings and collaborate with trusted partners to offer flexible solutions for their customers and stakeholders.
Selling Services and Data — Not Things
The future of the industry is not producing more and more things. Output will be measured on the relevance of the offering not primarily quantity and speed. Tomorrow’s attention is shifting from purchase to after-sales and building long term relationships with customers. Data is already becoming a main revenue source and its no coincidence successful companies like google offer free solutions that capitalize on the wider use of their services. For manufacturing this means a shift from volume selling to enabling platforms and services capable of fulfilling a specific need.
Navigating the Changing Industrial Landscape
With great uncertainty come great opportunities for companies willing to make the step into the true Industry 4.0 (or maybe 5.0) future enabled through connectivity, new service-based models, and accelerated digitalization. It’s not an easy transition, and why we are so interested in taking our expertise from working in the space with some of the most innovative companies around the globe and sharing our perspective. In a series of articles we’ll delve into some specific areas within the Industry 4.0 roadmap that we see as opportunities and share our thoughts on how businesses and organizations can innovate and create both focus and resilience for future challenges.
If you have specific challenges you’d like to share in this area, feel free to reach out, and we’ll start our series at the beginning, with a challenge facing all industrial players in their quests for efficiency and modernization through technology: What to do with the humans?