Industry 4.0 is pushing tech up the manufacturer’s agenda

The fourth indus­tri­al rev­o­lu­tion is leav­ing no com­pa­ny behind. Com­pa­nies that didn’t embrace com­put­ing in the sec­ond half of the 20th cen­tu­ry strug­gled to remain com­pet­i­tive against their peers. Now, with Indus­try 4.0 firm­ly in place, inter­con­nec­tiv­i­ty is the new objec­tive, what­ev­er the indus­try.

In tra­di­tion­al indus­tries, like man­u­fac­tur­ing, inter­con­nec­tiv­i­ty can be a tough trans­for­ma­tion to make. There are risks to be con­sid­ered and invest­ments to be made, but ignor­ing this shift may make it riski­er and more expen­sive to do busi­ness in the future.

Andy Coussins, SVP and head of inter­na­tion­al at Epi­cor, says some man­u­fac­tur­ers are still cau­tious about change. To some extent, this is explained by com­pa­nies rely­ing on their tried-and-test­ed in-house IT teams, par­tic­u­lar­ly in high­ly spe­cialised and high­ly reg­u­lat­ed indus­tries like med­ical device man­u­fac­tur­ing. “How­ev­er, giv­en the over­whelm­ing advan­tages of a high­ly secure and scal­able cloud approach, the cal­cu­la­tion in deter­min­ing on-premis­es or a cloud solu­tion should real­ly come down to the expe­ri­ence and know-how of the cloud part­ner,” Coussins adds.

That’s not to say it’s a bleak out­look for man­u­fac­tur­ers. Make UK chart­ed a 6% growth for 2022 in the man­u­fac­tur­ing sec­tor. The UK also ranks in the top 10 largest man­u­fac­tur­ing nations by val­ue of out­put and sees 51% of the nation’s export­ed goods derive from the man­u­fac­tur­ing sec­tor. This explo­sive indus­try is in a strong posi­tion. And the pan­dem­ic has shown that its resilience is unques­tioned.

But main­tain­ing this posi­tion­ing in the future will rely on a renewed focus on tech­nol­o­gy, soft­ware and the abil­i­ty to digi­tise. Make UK’s research indi­cates that 45% of man­u­fac­tur­ers have already intro­duced dig­i­tal tech­nolo­gies. But 15% of com­pa­nies have no plans to do so by the end of 2023. These tech­no­log­i­cal lag­gards may find it chal­leng­ing to keep up in the era of Indus­try 4.0.

Cloud tech­nol­o­gy is one of the pri­ma­ry routes to inter­con­nect­ed­ness that man­u­fac­tur­ers can take. In fact, accord­ing to Epicor’s research, 50% of man­u­fac­tur­ers say they will move ‘most busi­ness solu­tions’ onto the cloud in due course. That indi­cates a sense of opti­mism and trust in the cloud. But the real­i­ty is that data back­ups and IT func­tion­al­i­ty are still the pri­ma­ry uses of cloud tech­nol­o­gy on the ground.

With the indus­try being squeezed in all direc­tions, man­u­fac­tur­ing has had to adapt to increased com­pe­ti­tion – often from non-tra­di­tion­al com­peti­tors – sup­ply chain dis­rup­tion and the ‘need it now’ con­sump­tion trend. Vaib­hav Vohra, chief prod­uct offi­cer at Epi­cor, says: “For­tu­nate­ly, tech­nol­o­gy inno­va­tion in recent years – par­tic­u­lar­ly in the cloud – bodes well for help­ing com­pa­nies respond to these require­ments. Cloud unique­ly gives com­pa­nies the flex­i­bil­i­ty to do busi­ness where they need to – in fac­to­ries, offices, or at home. It also pro­vides oppor­tu­ni­ties to devel­op cost struc­tures that can move from upfront, fixed-fee imple­men­ta­tions to the flex­i­bil­i­ty to sub­scribe to cloud ser­vices over a peri­od of time.”

One of the moti­va­tions behind the shift to cloud-based solu­tions was the pan­dem­ic and the need to mit­i­gate risk. Make UK found that 26.4% of com­pa­nies plan to adopt cloud-based solu­tions as a way to address vul­ner­a­bil­i­ties and increase resilience.

“There used to be a time when organ­i­sa­tions were ner­vous to put their data in the cloud, under the impres­sion that once up there ‘any­one could get at it.’ How­ev­er, today the cloud is where all the inno­va­tion hap­pens and that applies for secu­ri­ty as well as ana­lyt­ics and pro­duc­tiv­i­ty,” Vohra says. He points out the lev­el of invest­ment and cyber­se­cu­ri­ty involved in a major cloud plat­form. Com­par­a­tive­ly, a sin­gle serv­er run by an in-house IT depart­ment is vul­ner­a­ble to mod­ern cyber attacks. “Being ‘in the cloud’ is the only sen­si­ble choice to ensure the high­est pos­si­ble lev­els of ERP busi­ness appli­ca­tion secu­ri­ty, Vohra adds.

And, with near­ly 90% of man­u­fac­tur­ers sur­veyed by Epi­cor not­ing that data is safer in the cloud, new soft­ware solu­tions are a sim­ple fix for oper­a­tional resilience con­cerns.

Indus­try 4.0 is touch­ing every ele­ment of busi­ness oper­a­tions, from employ­ment and skills to con­nec­tiv­i­ty to secu­ri­ty and resilience. Man­u­fac­tur­ers are recog­nis­ing the need to embrace new tech­nol­o­gy in order to remain com­pet­i­tive. After all, Indus­try 5.0 may be just around the cor­ner.