Latest Industry 4.0 thinking: is there any such thing?

Stuart Constable

Thursday 1 November 2018

You’ve heard of Industry 4.0, or the Fourth Industrial Revolution. It describes the impact of digital transformation on manufacturing and the supply chain. But how about this: is it just wrong as a concept? Accenture believes it is, because digital isn’t just one big thing, like a canal network or a steam engine. It’s a constant stream of disruptive brilliance that means the revolution may never end.

People love labels. Especially when they’re not absolutely sure about something.

You can see it in the music business, where the idea of the genre has become almost more important than the music itself. It’s as if people don’t know what kind of music to like unless they know what genre it is.

So when the term Industry 4.0 began to appear, it caught all our imaginations. Here’s the Fourth Industrial Revolution, just like the age of steam, or the rise of electronics, or the arrival of information technology. Simple.

Except it isn’t. This is a revolution like no other. It’s not even an evolution, because it’s not a protracted, steady process of gradual adaptation to changing circumstances. It’s a progression defined by huge lurches of innovation and an influx of what’s become known as “Black Swans” – very rare and unlikely occurrences that have a disproportionately large impact.

For anyone running a business, that kind of change creates a tough trading environment. Sure, it brings plenty of opportunities, especially if you’re one of the innovators, or a successful early adopter. But it also means that you can find yourself flanked by a completely new entrant, or left behind by a technological breakthrough that happens far faster than at any previous point in history.

Accenture have highlighted this phenomenon with research showing that only 13% of industrial company executives feel that they have realised any efficiency or growth from their investment in digital technologies. Given the noise around technologies like the internet of things, artificial intelligence and 3D printing, this could be seen as something of an alarming statistic.

But what Accenture’s Combine and Conquer report points out is that the label ‘Industry 4.0’ may be a big part of the problem. Seeing digital as a kind of fixed transformative moment – things weren’t digital, now they are – misunderstands the nature of digital transformation.

To realise big value, you have to extend the reach of digital as far as it will go. You can bring sensors into a warehouse or onto the factory floor to create new pipelines of valuable data, but that flow of information only really begins to make a difference to performance and productivity when it’s integrated with other critical sources of insight, such as customer data, or data from up and down the supply chain. It’s about creating a bigger picture while also being ready and open to the next disruptive change.

The digital era has brought a classic definition of management into sharp focus. It states that effective managers always have “a restless dissatisfaction with the status quo.” If you see Industry 4.0 in those terms, you can open out your understanding and approach it not as a box to be ticked, but as a strategic shift in thinking. I almost said, “As a journey”.

It’s the kind of thinking that has informed the 25-year history of the ThinkPad. Today’s ThinkPad range is lighter, thinner, far more powerful and incredibly flexible, when compared with the original machines. As a product ThinkPad has changed profoundly in a very short space of time, yet the latest models are still quintessentially ThinkPads. For me, that kind of constant innovation is the real meaning of Industry 4.0.

It’s strange, you read so many blogs like this where people complain about buzzwords and jargon. Yet we love them; we need labels to help us make sense of the world around us. So we’ll be seeing Industry 4.0 everywhere for a long time to come. The trick is to remember that there’s no end in sight to this Fourth Industrial Revolution. And that whatever it brings will not be what you expected.

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