Manufacturers are in a race to the fourth industrial revolution. Fortune 100 manufacturers are setting the pace, and new technologies are already transforming the industry.
Industrial revolutions have been underway ever since water and steam power mechanized manufacturing in the late 1700s. The second industrial revolution added electric power, and the third added computers. Now, a fourth industrial revolution is expanding beyond the factory — to Industry 4.0.
Industry 4.0 is the digital transformation where cloud platforms, data-driven decision making, artificial intelligence, autonomous systems, 3D printing, the internet of things (IoT) and other new technologies change how manufacturers make and deliver goods.
In the race to this digital transformation, mid-market manufacturers need to ask some tough questions:
- How are my mid-market competitors reacting?
- Can I leapfrog my competitors and aim at disrupting any industry leaders?
- What technologies are leading this new industrial order, and which ones are achievable in my business?
- Does my company have the fortitude and capital it needs to stay competitive?
- Does my business have the leadership for the required transformation, considering where we are on the manufacturing maturity spectrum?
- Can our leaders help us quickly define our technology targets and achieve them without “breaking the bank”?
- Do we have a roadmap to navigate what we need to do?
- What is success and how do we measure it?
The speed of this race might seem challenging, but mid-market manufacturers actually have an edge.
Manage the pace of your race
Industry 4.0 offers mid-market manufacturers exponential power to disrupt markets. No longer limited by traditional production and distribution constraints, manufacturers can now use innovative ideas and technology to pass the competition. At the same time, mid-market companies need to pick the right pace when they enter the race.
Grant Thornton Transformation Advisory Services Director Gerry Cahill recalled a conversation about how manufacturers can set the pace of their digital transformation. “The CEO of a global consumer electronics manufacturer once told me he wanted his company to be ‘technologically just a little bit behind the number one manufacturer in the industry.’”
“The point was that mid-market manufacturers can let someone else do the sprinting, but they must follow close behind,” Cahill said. “Let industry leaders with deep pockets spend the capital and trail blaze the solutions. Track their efforts and learn from their mistakes.” That way, your company is ready with the technology and knowledge it needs to make the right move when an opportunity comes along.
To make sure you are ready, you need a solid leadership plan that sets the right pace and prepares your people, process, capital and technology to be a competitive edge.
Six themes for your plan
To compete in the race to Industry 4.0, form a solid leadership plan that’s based on these six themes:
- Embolden your leadership to make people the core of your transformation.
- Develop goals, measurable objectives and a plan to formalize your Industry 4.0 aspirations.
- Know your competition and pinpoint your technology competitiveness.
- Know your capabilities, strengths, weaknesses and opportunities to improve.
- Determine the flow of your business operation. Make sure your employees are engaged in managing flow to ensure that current processes, tools, systems and data are ready for the race.
- Educate the team on technologies that support your transformation plan. Understand how technology can differentiate or disrupt the industry.
- Activate a five-year financial plan that includes CAPEX projections, and alternative “what if” acquisition models of target technologies.
- Seek out “best fit” processes and technologies for moving mid-market manufacturers forward in Industry 4.0.
Today, investments in new technologies are investments in your company’s future. That’s why it’s so important to make the right investments.
The decisions can be challenging. You must answer tough questions that define your competitive position, set goals and determine which technologies belong in your business. To find the right answers, you need to analyze your current production environment, supply chain, customers, competitors and more, while also watching the best practices and lessons learned for transforming business processes and technology.
If you can answer these questions, form your plan, and set the right pace for digital transformation, then you can be ready for the right opportunity — the opportunity to be a transformation catalyst in Industry 4.0.
Contact:
Gene Cahill
Partner
Gene Cahill is a Partner in the Forensic, Investigative & Dispute Services practice in the Chicago office of Grant Thornton LLP. Gene has worked on behalf of clients and Audit Committees, advising them on global fraud and anti-corruption matters.
Chicago, Illinois
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