Leading people through technological change
It used to be that the barriers to entry in manufacturing were high. Entering the market required enormous investment. While that is still the case for many organisations, because technology is changing so rapidly, new younger and dynamic organisations are entering the market and chasing market share. Often fuelled by outside investment that sees the potential.
Research from S&P 500 companies has shown that a large, successful company in 1964 could expect to hold on to their position at the top for 33 years. By 2016 that time had decreased to 24 years and is forecast to shrink to just 12 years by 2027.
Much of this reduction in lifespan is due to the rapid pace of technology. Companies that have recently dropped off lists of top US companies include Eastman Kodak and the New York Times. To be replaced by the likes of Facebook, Paypal and Netflix. The adopters of the latest technology tend to win the race and today’s race in manufacturing is Industry 4.0.
One of the many challenges of change is that the more established your company is, the harder it can be to bring your people with you. We are creatures of habit and if we like our work as it is today, then why would we want to change? At Festo, we have seen that the number one barrier to the success of Industry 4.0 is often the engagement of staff and the adoption of new skills. This challenge is acute within manufacturing, particularly when looking at jobs that could be replaced by autonomous machines. A key question is how do you engage your people to deliver change when that change could eventually replace them?
When working with manufacturers, we often refer to the guidelines published by the VDMA (German Engineering Federation) which Festo was closely involved with developing. These guidelines provide a practical toolkit for companies to look at their Industry 4.0 readiness across the two dimensions of products and production. While the final outcome might be to remove human intervention from processes, the stages beforehand rely on a third fundamental dimension – your people.
Whether you manufacture complete products or single components, there is one key question you need to ask yourself. To what extent can new products be developed or existing ones be further enhanced with the help of Industry 4.0?
The process in the VDMA guidelines is divided into five steps. Starting with a period of preparation through analysis, creativity and evaluation to implementation. Take fault monitoring for example. If your company currently has no fault monitoring systems in place, a good starting place is to develop a rigorous process for manual fault detection. The next step would be to record operational conditions in order to predict and diagnose faults. With the ultimate goal of implementing autonomous control, as this avoids costly consequential damage in the case of failures and reduces the need for human intervention.
By breaking the process down into these manageable stages, Industry 4.0 becomes more tangible, flexible and ultimately more achievable.
Like products, there’s one key question. How can processes be optimised and production costs reduced with the help of Industry 4.0?
For example, we’ll look at the processing of data in production. This is a key issue for Industry 4.0. From a starting point of no data processing, a company might move to data storage for documentation and then analyse that data for process monitoring. Evaluating data for ongoing input into processing planning and control would then become an automatic process. Improving efficiencies and again significantly reducing the need for human intervention.
Not every part of Industry 4.0 can be usefully transferred into this process. Manufacturing simple screws will not need functionalities for data exchange in the future. However, coming up with ideas to increase the efficiency of screw production could have an enormous impact. Going through this process encourages your employees to consider every possible opportunity – always considering the next step towards the vision of Industry 4.0.
As you can see from the examples above, you definitely need your people to be engaged in Industry 4.0. However there are some worrying statistics. According to the Engineering Employers Federation, only a third (31%) of manufacturers or their members understand or are familiar with the concept of the Fourth Industrial Revolution. Less than half (42%) were unfamiliar, the remaining being undecided.
Do your people know what Industry 4.0 is and what it means to your business? Or worse, do they feel threatened by the rise in technology and the possible impact on their jobs? To take your people with you on this technological change means Industry 4.0 needs to be a transition process not a wholesale transformation.
Three dimensions of Employee Engagement
You are reliant on your people to identify the potential steps toward Industry 4.0. And identifying change requires your people to change their mindset. They need to be focussed on what can be done in the short, medium and long-term. And then the company needs to support them to drive through the changes. They need to be fully engaged.
We’ve developed the Three Dimensions of Employee Engagement on which you can measure your people. Personal Satisfaction is where an individual is satisfied in his or her role. The second axis is Needs Alignment, where the needs of the organisation and the individual are aligned. The third is Drive. This is the personal drive and energy of employees. A disengaged employee with low drive will be less of a disruptive influence than one with high drive who is keen to convert others to his or her own set of beliefs and opinions.
For the majority of companies, the biggest barrier to Industry 4.0 is understanding the changes that can be made. This isn’t just about whole scale technological change. It’s about taking the steps you need to get your product manufacturing and production facilities ready for Industry 4.0. And just like any other major change product, you have to take your people with you. Build the vision of where you want to get to. Break this down into manageable steps. Engage your people and let them get excited about the journey you’re on and what the future holds for them. They’ll be upskilled along the way and you’ll be Industry 4.0 ready.
Festo Training & Consulting runs training workshops to equip manufacturers with the knowledge and skills to implement Industry 4.0.
IMF: Variants Can Still Hurt Manufacturing Recovery
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.