Robotics, Internet of Things, Artificial Intelligence (AI), Big Data, smart factories…we’ve all heard the buzzwords and hype of Industry 4.0 (I4.0), but it seems New Zealand businesses have been reluctant to dig deeper to understand how these concepts could accelerate their growth and allow them to compete better on the world stage.
The fact is, the concept of I4.0 has been around for 10 years. From its origins in Germany it has now gained foothold around the world and it’s not going away. Instead, COVID-19 has forced businesses in many countries to accelerate uptake of digital technologies.
However, in NZ we haven’t seen the same post-COVID-19 uptake. Research from the Productivity Commission indicates New Zealand’s productivity is not keeping pace with international competitors. That means it has never been more important to demystify I4.0 – the fourth industrial revolution that’s seeing businesses combine technologies to merge the physical with the digital into cyber-physical (algorithm-based) systems – and identifying ways for manufacturers, entrepreneurs and innovators to engage.
While more accessible concepts such as robotics, automation and AI have become regular features of the I4.0 conversation, they’re only a fraction of the tools available.
Also, I4.0 isn’t simply adopting new technology to replace humans and complete tasks faster. Instead, it’s about creating data-driven interconnectivity between people, products, machines and processes to make businesses more efficient and more effective; the multiple and evolving technologies are simply the enabler. Businesses need to develop a digital strategy to collect and intelligently analyse the resulting data.This will empower teams to better understand existing and new customers, solve problems, and build products, services and new business models.
For example, a manufacturer simply replacing humans with robots is not I4.0. But a I4.0 manufacturer could use robotics with AI alongside humans to develop better products, and then analyse data from that interconnectivity to work more effectively with suppliers, marketers and product developers.
Used well by a lean business focused on continual or disruptive improvement, I4.0 allows for more effective innovation, empowered product development teams, improved supply chains and, ultimately, more products and services sold. The focus of I4.0 is not so much on improving the speed of your production or operations, but accelerating growth with focus and direction.
Where to start?
There are many useful resources available for businesses that want to start their I4.0 journey. These tools help demystify the concept and break down the transformation process into manageable steps.
The Industry 4.0 Demonstration Network is a government initiative to help NZ businesses realise the benefits of a range of digital technologies that will enhance manufacturing performance, output, monitoring and control. The partnership between Callaghan Innovation, Beca and EMA includes a mobile showcase, a network of site visits, and smart factory tours.
Callaghan Innovation’s Industry 4.0 Hub offers useful information and links to programmes that enable businesses to make best use of I4.0 technology and approaches, such as the Industry 4.0 Starter Service, which sits alongside our Lean and Digital Lean.
Callaghan Innovation believes being lean is a crucial early step in engaging with I4.0. Founders and leaders need a thorough understanding of the waste, value and culture within their business in order to realise successful transformation.
As with many aspects of business transformation, the key is thinking big but starting small and scaling fast. Start with a single problem or customer need and explore potential I4.0 solutions. Hamilton manufacturer Longveld is a good example. It trialled cobots to work alongside staff polishing stainless steel and was so satisfied with the results it purchased the tech.
Without clarity on the ‘why’ or ‘value’ in adopting or implementing I4.0 technologies, businesses run the risk of creating another pilot project that stalls, or a fact-finding study that doesn’t get engagement, ultimately leaving business leaders and teams believing I4.0 is ineffective.
Business transformation of any kind is never simple, but it need not be insurmountably difficult, either.
NZ needs to build to the tipping point where enough businesses become I4.0 success stories, inspiring others to follow suit. Longveld story, and Silver Fern Farms which used data-driven forecasting to improve productivity, are two good examples of businesses that have found an I4.0 solution to a problem.
I4.0 is happening whether Kiwi businesses choose to participate or not. If NZ businesses fail to engage, they risk being left behind.
Article by Phil Anderson, Callaghan Innovation Business Innovation Advisor
The Callaghan Innovation Industry 4.0 mobile showcase will be in Northland as part of Techweek2021.