Aug 19, 2021

Vendigital: fragmented industry 4.0 could undermine growth

Technology
Industry40
vendigital
Innovation
Collaborating with Cranfield University, Vendigital’s report looks at the integration gap, and how fragmented industry 4.0 could undermine growth recovery

UK manufacturers and Their Investments in Industry 4.0 Technologies 

While there are clear signs of UK manufacturers are investing in trialling industry 4.0 technologies, few have completed their integrations and in many cases have only reached the ‘initial stage’ for their digital transformation programmes.

The integration Gap 

If this integration gap continues, the UK industry is at risk of missing out on growth opportunities from the current recovery phase as economies rebound strongly.

Of those that participate in the study, more than half of senior-level decision-makers (56%) at UK manufacturing businesses confirmed that they had achieved digital transformation in certain business functions. 

Despite this, very few have actually taken the next steps to integrate the technology across all functions. It was concluded that in almost all cases, digital transformation had only reached the initial stage. 

“UK manufacturers are aware of the benefits that Industry 4.0 technologies can bring in terms of driving productivity and streamlining business processes. However, the distinct nature of the technologies and the perceived complexities associated with their application can make it difficult to get a clear view of the benefits they bring,” said Alec McCullie, partner and digital tech specialist at Vendigital.

“Most investments in digitalisation are focused on function-based trials or experiments, which serve a purpose by demonstrating value on a specific project but can miss a holistic view that may also include more intangible benefits such as attracting top talent. It is not unusual for businesses to have several overlapping trials underway at once and this makes it difficult to visualise the benefits that a fully-integrated, cross-functional digital transformation programme could bring,” added McCullie.

Sound Knowledge But a Lack of Analytics Skills

White senior-level decision-makers have a sound knowledge of industry 4.0 technologies, the report identified a lack of analytical skills is holding back progress. 

The research found that 30% of companies have not made a formal assessment of the application of IoT in their manufacturing, with a further 30% still in the testing stage. Of those surveyed, only 7% had completed an assessment of the potential benefits. 

“We can see from the research data that tech trials are happening, but many of the businesses we spoke to lack access to the dynamic data and capabilities needed to support a business case for further investment,” said McCullie. 

Investment Barriers

Top investment barriers for digital transformation programmes included funding and lack of digital skills, while ‘resistance to change’ and lack of digital skills were also identified.  

“From a cultural perspective, some businesses are struggling to make digital transformation an empowering experience for employees. Some may feel that their jobs are being undermined by the digital technologies under trial rather than viewing their introduction as an opportunity for skills development and an acceleration of strategic objectives. Digital transformation programmes should be viewed as an opportunity to create businesses that are more dynamic, innovative and inclusive,” added McCullie.

Realising the Potential of Industry 4.0

To realise the potential of Industry 4.0, the report recommends putting in place bespoke digital transformation plans, as well as considering the best way to assess the value of different technologies and ensure they are effectively integrated. 

To read Vendigital’s ‘Digital Transformation Roadmap’, click here.

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