What’s wrong with Industry 4.0 and how to fix it?

This blog post has been written for the Founder Institute. You can also find it here. 

A few weeks ago, Elon Musk tweeted that “humans are underrated” and that heavy automation didn’t have the results expected in Tesla’s gigafactory.  Isn’t it a great example of what’s wrong with digital transformation and smart factories?!

Everyone is talking about industry 4.0, the fourth industrial revolution and how it’s going to change the industrial world! Everyone believes it’s all about robot, full house automation and no more human being in factories, well, in my opinion, this image of the future of manufacturing is wrong!

Let’s get back to basics, what’s Industry 4.0?

McKinsey defines Industry 4.0 as “the next phase in the digitalization of the manufacturing sector”. Indeed, it is the label given (by Germany) to the gradual combination of traditional manufacturing and industrial practices with the increasingly technological world around us. Several disruptive technologies are at the center of these changes: Big data, Internet of Things, Robotics, Artificial Intelligence, etc.

Today, a lot of industrial companies have tested the concepts and see some significant changes and improvement. In India, equipment effectiveness reportedly increased by 18%, while a Michigan plant cut downtime by as to 20% by applying IoT sensors to monitor wear. Another example is IBM’s Maximo Asset Management which is allowing users to sense, communicate with, and diagnose problems on connected devices and machinery in the plant, the company says the data gathered from #workflow processes, throughput and yield can reduce defect rates by up to 48%.

Industry 4.0 is definitely not about to change the manufacturing industry, it already has! However, everything is not as good as it seems and some issues and concerns are starting to pop up…

Digital transformation: another side of the medals…

Ok, let’s say that we understand that the fourth industrial revolution is here, what’s the issue you may ask? We actually seem to forget that it’s here to help us, humans, have a better life, not replace us and make us miserable!

Let’s start by clearing some facts :

• Buzz Words? Industry 4.0, Advanced Manufacturing, …,  those are some very hype buzzwords! Why? Because everybody is talking about it and nobody knows what it actually means!  Understanding this concept and the technologies behind it is the first step to succeed in its implementation.
• Heavy Investment? In the past implementation of technologies required a lot of money but today it is more affordable. The technologies are becoming cheaper. You can win a lot without investing a lot.
• Latest fancy robots? You need the most qualified robots to fulfill your strategic objectives and this doesn’t mean the most expensive or the fanciest ones! Please let’s not forget that technology is here to solve problems for us, not the other way around!
• A connected Factory is the key? Yes, you need to be able to collect data, however, the real challenge is in analyzing it and getting something out of it. It’s more about reading the right data than about connecting everything
• No more employees? While yes, some jobs are going to disappear, others are actually going to be created! You don’t have to fire your employees, you can retrain them for new tasks the automatization will require. Also, if you have no more humane in the factory, who will acknowledge and celebrate the success of the factory?

The biggest issue of Industry 4.0 is that we seem to forget that its main purpose is to find solutions to manufacturing issues and get it to the next level so it has a positive impact on the industry as well as local economies, as Cliff Justice, partner at KPMG said  ” [Industry 4.0] is augmenting, not automating our people.“

Humans, underrated in factories?

You may have understood it, my point is that humans should be part of the on-going industrial revolution. To succeed, manufacturers will need the commitment of their employees!

You may have understand it, my point is that humans should be part of the on-going industrial revolution. To succeed, manufacturers will need the commitment of their employees!

It’s actually false to think that Industry 4.0 means zero manpower, but it is also false to think that individuals will keep the same spots. Indeed,  there is actually a shortage of manpower. According to Manufacturing Global : “ an estimated 186,000 new engineers will be needed each year until 2024, yet there’s a shortfall of 20,000 graduates annually.”. Actually, Robots do not steal jobs, they do the ones, individuals do not want to do anymore, while Human’s jobs are shifting to jobs with more added value.

Here is an example of how digital transformation is creating more jobs than destroying in Germany, how robots can help humans on the basic and difficult tasks, improving the workers’ security and a why after doing the experience of full house automation, Mercedes decided to go back to basics by replacing its robots by humans. Lastly, an interesting read on this subject is the KPMG report on Industry 4.0 is all about people.

It’s important to keep in mind that all industrial revolutions have led to changes in the kind of job individuals were doing. However, people always found a way to work. Before the first industrial revolution 40% of the population was agricultural workers, today it is only 2% and yet there is still work.

What should we expect then?

Industry 4.0 is a term that brings together many concepts. Knowing what it is, understanding the technologies behind the concept and assessing what kind of improvement they can actually bring is the most complicated task for a manufacturer.

To conclude, I would ask you not to believe everything that is said about industry 4.0 and Advanced Manufacturing (just a buzzword, requires heavy investments, sounds the end of human work …) and start implementing projects step by step. Do not try to change the entire organization at once but advance thanks to successful projects that will involve and engage your employees. And whatever you think of it, try not to forget that this is a matter of life or death for manufacturing companies!

“The dawn is just breaking in this fourth industrial revolution. Brand new dreams and ambitions crown the horizon: skylines of smart factories, smart cities, smart Martian colonies. It feels like the future of old, in fact. And where we’re going, we’ll still need roads, but not drivers.”