Harnessing technology in pursuit of survival in the age of Industry 4.0 - Phil Murden, KPMG

Productivity is a key indicator of long-term economic health and our living standards. There’s no doubt that improving the North’s productivity rates is a burning ambition for all of us in our regions.
Industry 4.0Industry 4.0
Industry 4.0

Data released recently, showing a second successive quarterly fall in productivity in the UK, compared to last year, brought the subject back onto the news pages.

With manufacturing reported to account for one in ten of all jobs in Yorkshire and with a value of £7.7 billion in the Leeds City Region alone, raising output in this sector stands to make a significant impact on the region’s wider productivity progress.

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So it’s encouraging that KPMG’s new manufacturing report found that half of those at the helm of businesses in the sector are investing in next generation technology, such as artificial intelligence, to boost productivity.

Our survey found that technology is the highest ranked area for investment by manufacturers, matched only by improving workforce skills, with both cited as investment areas by 50 per cent of manufacturing businesses. Technology and workforce skills are both, of course, critical to productivity.

Given we questioned leaders in businesses with revenues from £10m upwards, the responses reflect many smaller and medium sized companies across the country, not just the largest, where you might expect early adoption of next gen tech. So at KPMG we consider it to be good news that half are seeking to boost their productivity through technology.

Our report also highlighted that Brexit is significantly impacting manufacturers and their investment plans. Firms need to have short to medium-term strategies in place ahead of Brexit, but it is critical that senior executives maintain focus on their long-term strategy for competitiveness, investing in the right technology and talent to drive growth while ensuring efficiency.

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Adopting technology in manufacturing needs reference to Industry 4.0. This covers a vast range of technologies including the Internet of Things, Augmented Reality, Data Analytics and Cyber Security.

Automation on the shop floor is a prime example of boosting productivity through tech. Deploying advanced robotics allows a business to fulfil repetitive tasks requiring precision, such as drilling, fastening and welding, at great speed lower margins of error and, in some cases, with health and safety benefits for the workforce.

Other workforce-related developments can involve state of mind. Car manufacturers are trialling technology that can track a driver’s emotional state, create a soothing environment and warn if they get too stressed. Such monitoring is expected to offer benefits to industrial operations, alerting them to productivity opportunities and overt health and safety risks.

Digital technology should push past the shop floor though. Its ability to speed up back office operations is being explored, as is the capability of advanced analytics to enhance decision making throughout a business.

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Another example of driving the benefits of tech harder lies in the use of predictive maintenance, using sensors to cut machinery downtime inefficiencies. We also see companies considering whether insights can play a part in future improvements, rather than just heading off here-and-now problems.

The supply chain is also an area of revolution. We’re seeing digital twins, for example, creating a digital mirror of an organisation’s processes and related business information.

Technology has a greater part to play than ever before in driving manufacturing productivity and commercial success but many companies are going one step further and seeing technology as an imperative for survival in the era of Industry 4.0.

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