May 16, 2020

Industry 4.0: managing the Cultural Impact in Manufacturing

Andy Coussins
5 min
Andy Coussins, senior vice president and head of international atEpicor Software, discusses the six steps for a successful change management strategy...

Andy Coussins, senior vice president and head of international at Epicor Software, discusses the six steps for a successful change management strategy.

The success of digital transformation isn’t just about investing in the right technology. As with any large-scale project—from a change in working location to a company merger—the impact on the people involved needs to be a key consideration when putting a strategy and implementation plan in place. However, in a bid to keep up with the latest technology trends, manufacturers could be shooting themselves in the foot by not addressing change management and cultural aspects from the outset.

In fact, recent research has found that only a quarter (26%) of businesses consider change management strategies to be an important part of the move towards Industry 4.0 and the connected enterprise. This suggests that a large proportion of manufacturers are not putting steps in place to manage the impact of such a change on corporate culture, which could affect the ultimate success of any digital transformation project.

Six steps to success

Despite pressure on businesses and individuals to remain at the cutting edge, no one wants to be an early adopter and get it wrong. A recent report from Deloitte into Industry 4.0 readiness found that even in today’s technology-driven world, senior executives are not as prepared as they think they are to reap rewards from digital transformation.

“Faced with an ever-increasing array of new technologies, leaders acknowledged they have too many options from which to choose and, in some cases, they lack the strategic vision to help guide their efforts. Organisational influences also challenge leaders as they seek to navigate Industry 4.0. Many leaders reported their companies don’t follow clearly defined decision-making processes, and organisational silos limit their ability to develop and share knowledge to determine effective strategies.”

To make Industry 4.0 a success, no matter how big or small the change, manufacturers need to put key measures in place to manage the transition. This includes undertaking the necessary groundwork to ensure that whatever technology businesses invest in, they can get the best out of it.

Step one—Be realistic

Despite digital transformation being very much an industry buzzword, manufacturers don’t need to take everything on at once. It’s important to assess what needs to be automated and why. If something is working and the process is efficient, it might not need changing just yet. The key to getting it right is to prioritise adoption rather than change for change’s sake. A phased approach will be beneficial for everyone in the long term.

Step two—Get stakeholders on board

Following an assessment of priorities, manufacturers need to map and plan out what needs to happen next—from procurement to implementation and beyond. This ensures that all stakeholders from every department affected are clear about what is happening, why, and when. Only then can everyone involved be prepared and plan for the roll-out.

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Step three—Keep talking

Communication at every stage is essential—particularly before implementation. Users need to feel they are part of the process and that they can raise any concerns or questions before a new way of working is thrust upon them. Taking time to address any potential issues at the start of a project will ensure users are bought into the process, enable them to understand what is expected of them, and avoid any pitfalls further down the line.

Step four—Factor in ongoing training and support

For efficiencies and productivity to be realised, users need to have a good understanding of how the technology impacts their working practices. This can only be done through comprehensive training and ongoing support. While this could be an overwhelming prospect, breaking it down into bite-sized, digestible sessions will be more effective, rather than overloading people with too much information from the outset.

It is also worth considering that everyone learns in different ways, so whilst an online demo or training manual might be right for one person, someone else might prefer more visual tools, like a video or a step-by-step animated guide, for example.  

Step five—Take your time

The choice of new technologies can be overwhelming and daunting for even a seasoned professional. Never lose sight of why you are investing in technology and keep your business objectives in mind—what your competitor is doing might not be the right approach for you. Jumping on the bandwagon or adopting new technology too quickly could be detrimental in the long-term, if the process is not well thought-through or fit for purpose.

Step six—Undertake regular reviews

While following steps one to five will ensure your business has the best chance of successfully adopting new technology, it will all be in vain if you miss out step six. The hard work doesn’t stop when you reach go-live—in fact, that is only just the start of the digital transformation process.

For a project to be a true success, any technology investment needs to be reviewed and assessed regularly. Is it being used to its full potential? Are there any gaps in training? What more could the business get from it? What is the data showing? Can it be analysed to improve future business growth?

Only by following these six steps will the manufacturing industry bring the whole business along for the digital transformation ride and ensure that Industry 4.0 is a success. Having a clear change management and implementation strategy will enable businesses to realise the full value of technology, whilst guaranteeing strong ROI and user acceptance.

For more information on manufacturing topics - please take a look at the latest edition of Manufacturing Global.

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Jun 8, 2021

IMF: Variants Can Still Hurt Manufacturing Recovery

IMF
Manufacturing
COVID19
Musk
Elise Leise
3 min
The International Monetary Fund (IMF) claims that while markets are rising and manufacturing is coming back, it’ll push for global immunisation

After a year of on-and-off manufacturing in the US, UK, and the eurozone, demand for goods surged early last week. Factories set growth records in April and May, suppliers started to recover, and US crude hit its highest price point since pre-COVID. As vaccination efforts immunise much of the US and UK populations, manufacturers are now able to fully ramp up their supply chains. In fact, GDP growth could approach double-digits by 2022

Now, the ISM productivity measure has surpassed the 50-point mark that separates industry expansion from contraction. Since U.S. president Biden passed his US$1.9tn stimulus package and the UK purchasing managers index (PMI) increased to 65.6, both sides of the Atlantic are facing a much-welcomed manufacturing recovery. 

Lingering Concerns Over COVID

Even as Spain, France, Italy, and Germany race to catch up, and mining companies pushed the FTSE 100 index of list shares to a monthly high of 7,129, some say that UK and US markets still suffer from a lack of confidence in raw material supplies. Yes, the Dow Jones has made up its 19,173-point crash of March 2020, and MSCI’s global stock index is at an all-time high. 

Yet manufacturers around the world realise that these wins will be short-lived until pandemic supply chain bottlenecks are solved. If we keep the status quo, consumers will pay the price. In April, inflation in Germany reached 2.4%, and across the EU’s 19 member countries, overall prices have increased at an unusual pace. Some ask: Is this true recovery? 

IMF: Current Boom Could Falter

Even as Elon Musk tweeted about chip shortages forcing Tesla to raise its prices, UK mining demand skyrocketed; housing markets lifted; and the pound sterling gained value. The International Monetary Fund (IMF), however, cautioned that manufacturing recovery won’t last long if COVID mutates into forms our vaccinations can’t touch. Kristalina Georgieva, Washington’s IMF director, noted that fewer than 1% of African citizens have been vaccinated: “Worldwide access to vaccines offers the best hope for stopping the coronavirus pandemic, saving lives, and securing a broad-based economic recovery”. 

Across the globe, manufacturing companies are keeping a watchful eye on new developments in the spread of COVID. Though US FDA officials don’t think we’ll have to “start at square one” with new vaccines, the March 2021 World Economic Outlook states that “high uncertainty” surrounds the projected 6% global growth. Continued manufacturing success will in large part depend on “the path of the pandemic, the effectiveness of policy support, and the evolution of financial conditions”. 

Mathias Cormann, secretary-general of the Organisation for Economic Co-Operation and Development (OECD) concurred—without global immunisation, the estimated economic boom expected by 2025 could go kaput. “We need to...pursue an all-out effort to reach the entire world population”, Australia’s finance minister added. US$50bn to end COVID across the world, they imply, is a small investment to restart our economies.

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