BCG: defining the automotive factory of the future
In a study conducted by Boston Consulting Group (BCG), the organisation focused on answering two questions:
- What will the factory of the future be like with respect to its structure,technologies and processes?
- What enablers will manufacturers need in terms of strategy and leadership, employee skills, and IT Infrastructure to make it a reality?
Whilst the global study surveyed over 750 production managers from leading companies in the automotive, engineered products and process industries, BCG’s ‘’ report focuses on the automotive industry, defining a vision for the factory of the future in 2030.
What is the factory of the future?
“The factory of the future is a vision for how manufacturers should enhance production by making improvements in three dimensions: plant structure, plant digitisation, and plant processes,” says BCG.
In the report, BCG explains that the future for plant structure is more flexible, with a multidirectional layout, a modular line set up, and environmentally sustainable production processes. Automotive participants of the survey expect plant structure to be an important factor in the factory of the future, with 83% believing it would be highly relevant in 2030.
With the use of digital technologies continuing to grow, companies are enabling smarter automation and promoting efficiency within their operations. Of the respondents from the automotive industry 86% said that plant digitalisation will continue to be highly relevant through to 2030.
“By using new digital technologies, manufacturers are taking lean management to the next level and exploiting its full potential,” states BCG, who identified within its survey that optimising plant processes will be even more important in the future. “Two key elements of lean management that are being further enhanced by digital technologies are customer centricity and continuous improvement,” adds BCG.
Three enablers for the factory of the future
“To realise the vision of the factory of the future, auto manufacturers must address topics related to three enablers: strategy and leadership, employee skills, and IT infrastructure,” says BCG.
Strategy and leadership
“Manufacturers must include their strategy for implementing the factory of the future as an element of their overall company strategy and put in place organisational structures that promote rigorous governance."
Of those respondents in the automotive industry, 35% see issues relating to the organisation as a major challenge for this enabler. Three requirements companies will need to address going forward include: strategy and roadmap; governance and new leadership.
BCG acknowledges that whilst the use of robotics and computerisation will reduce the number of jobs in assembly and production, the number of manufacturing jobs requiring skills in IT and data science will increase.
“Approximately 50% of automotive respondents said that they expect to employ more workers with IT skills, and approximately 25% expect the number of IT employees will increase by more than 10%,” says BCG.
Other findings within the report include, one-third of respondents expecting to need more workers with competencies in maintenance and quality control, with 25% expecting to need people with production planning and logistics skills.
“To ensure that their workforce evolves appropriately, companies must focus on building technical and social competencies. They also must implement new approaches to qualify their employees and ensure that the right skills are in place.”
Finally, of those respondents in the automotive industry, one-third see IT infrastructure as a major challenge. With this in mind BCG identifies two requirements that will need to be addressed:
- Cloud and Connectivity: “Manufacturers need plant-wide connectivity infrastructure (such as a wireless local area network) and technology to capture and store production data.”
- Data Security: “Enhanced supply chain connectivity is essential, but safeguards are required to ensure the secure exchange of data. Indeed, data security is a major concern of automotive companies.”
Gartner: Leaders Lack Skilled Smart Manufacturing Workers
With organisations rapidly adopting industry 4.0 capabilities to increase productivity, efficiency, transparency, and quality as well as reduce cost, manufacturers “are under pressure to bring their workforce into the 21st century,” says Gartner.
While more connected factory workers are leveraging digital tools and data management techniques to improve decision accuracy, increase knowledge and lessen variability, 57% of manufacturing leaders feel that their organisations lack the skilled workers needed to support their smart manufacturing digitalisation plans.
“Our survey revealed that manufacturers are currently going through a difficult phase in their digitisation journey toward smart manufacturing,” said Simon Jacobson, Vice President analyst, Gartner Supply Chain practice.
“They accept that changing from a break-fix mentality and culture to a data-driven workforce is a must. However, intuition, efficiency and engagement cannot be sacrificed. New workers might be tech-savvy but lack access to best practices and know-how — and tenured workers might have the knowledge, but not the digital skills. A truly connected factory worker in a smart manufacturing environment needs both.”
Surveying 439 respondents from North America, Western Europe and APAC, Gartner found that “organisational complexity, integration and process reengineering are the most prevalent challenges for executing smart manufacturing initiatives.” Combined they represent “the largest change management obstacle [for manufacturers],” adds Gartner.
“It’s interesting to see that leadership commitment is frequently cited as not being a challenge. Across all respondents, 83% agree that their leadership understands and accepts the need to invest in smart manufacturing. However, it does not reflect whether or not the majority of leaders understand the magnitude of change in front of them – regarding technology, as well as talent,” added Jacobson.
Technology and People
While the value and opportunities smart manufacturing can provide an organisation is being recognised, introducing technology alone isn’t enough. Gartner emphasises the importance of evolving factory workers alongside the technology, ensuring that they are on board in order for the change to be successful.
“The most immediate action is for organisations to realize that this is more than digitisation. It requires synchronising activities for capability building, capability enablement and empowering people. Taking a ‘how to improve a day in the life’ approach will increase engagement, continuous learning and ultimately foster a pull-based approach that will attract tenured workers. They are the best points of contact to identify the best starting points for automation and the required data and digital tools for better decision-making,” said Jacobson.
Long term, “it is important to establish a data-driven culture in manufacturing operations that is rooted in governance and training - without stifling employee creativity and ingenuity,” concluded Gartner.