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CIOs and their role in the new manufacturing industry
The fourth industrial revolution, or Industry 4.0, is upon us and with it the prospect of custom-made products manufactured en masse and at affordable prices. The Internet of Things is the catalyst of this technological revolution where smart factories will boost production to unprecedented limits and increase profits to unparalleled heights.
As was the case with the first three industrial revolutions − steam power, electricity and computers – Industry 4.0 presents businesses with formidable challenges. The World Economic Forum predicts that by 2020 a third of skill sets will comprise skills that are currently not considered crucial for the job. It is essential for leaders in the manufacturing industry to be prepared for this enormous shift as IT knowledge will no longer be an advantage but a prerequisite.
If businesses want to be industry leaders during this era of continuous digitalisation, the following six trends must be considered and responded to.
Industry 4.0 allows manufacturers to connect all machines, products and services to a single, central wireless network. Machines will be able to communicate their status and signal when parts need to be replaced. Products will share information about the required colour and size, among other things.
This level of digitalisation means that suppliers and customers have direct access to the manufacturing process and could upload their specifications onto the system. The opposite will also be true: manufacturers will have access to the data of their clients. Moritz von Schaumann-Werder, Associate Director at Page Executive, explains, ‘This will enable them to target the specific personal needs of a customer before he or she even asks for it. Imagine passing by somewhere and seeing an advertisement made for you personally. Thanks to Industry 4.0 that will be possible.’
The potential of smart factories is unrivalled when compared to the changing power of the three former industrial revolutions. According to a study by the research centre Frauenhofer, industry in Germany alone can expect to see a profit of 78 billion euros in the next decade.
‘The new technology will relentlessly speed up the manufacturing process until we reach the absolute limit,’ comments Moritz von Schaumann-Werder. ‘A German truck manufacturer is already able to deliver a customised trailer within 18 hours. And we’ve not hit the peak yet.’
Upskilling the workforce will be an immediate consequence of the fast advances in technology. ‘A knowledge of IT will be crucial, regardless of your actual job title and role,’ explains Moritz von Schaumann-Werder. ‘To give an example, a life science multinational was recently looking for a legal expert, who also had the skills and knowledge to set up and maintain a database, to align global legal issues.’
Research centre Gartner conducted a survey and concluded that big data analytics and process management are now considered the most important areas of expertise for faster digital business adaptation.
People with the ability to solve complex problems and apply critical thinking will be sought after by companies that want to be leaders of the new industrial revolution. ‘Database analysts are good examples,’ comments Moritz von Schaumann-Werder. ‘They need to evolve into data scientists who can take data and transform it into truly useful information.’
New HR Models
The changes predicted to take place as Industry 4.0 grabs a hold of the manufacturing industry will place companies in a position where some roles will need to be outsourced. IT specialists who work on a project basis are the way of the future though they are currently in short supply. Shifting attention to the international talent pool is necessary if businesses want to maintain their competitive advantage.
‘Companies will focus more on service management, and outsource the purely technical roles,’ explains Moritz von Schaumann-Werder, adding, ‘Already you have businesses that specialise in collecting data.’
A study by the Institute for Leadership Culture in the Digital Age showed that most business leaders expect teamwork to become more important. Building partner networks will prove to be a key executive strategy in order for companies to take full advantage of the potential of smart factories. Business managers will have to shift their focus to collaborating in information-sharing clusters.
Sharing data flows has the benefit of optimising the production and supply chain process. However, agreement on how much data should be shared has not yet been reached. Moreover, companies use different systems and formats for storing and exchanging data so it will be essential to set industry standards.
The CIO will lead the way in this new industrial revolution, moving from the company’s backroom to centre stage. Digital strategist and Financial Times columnist Ade McCormack agrees, ‘Most CIOs are sitting on a data oil field. It’s time to start drilling and develop their data-refining skills.’
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