Innovation cannot expand without the 4th Industrial Revolution

We are a long way away from fully capturing the benefits of the Fourth Industrial Revolution (4IR) in an inclusive and holistic way. To do this, technology adoption and diffusion across the ecosystem needs to improve dramatically.

In a recent report, jointly from the World Economic Forum and McKinsey called the “The Fourth Industrial Revolution and the factories of the future” they made a number of observations

“After a decade of flat productivity, the arrival of the Fourth Industrial Revolution (4IR) is expected to create up to $3.7 trillion in value to global manufacturing. A few years back, experts noted that the changes associated with the 4IR would come at an unprecedented rate yielding incredible results for those who truly embraced them.

Still, the hockey stick of benefits has not kicked in yet – while all companies are making efforts to adopt technology, most of the production industry (~70%) remains in pilot purgatory (where technology pilots last for extended periods of time, and companies do not take the final step of scaling up viable technologies). Less than 30% of manufacturing companies are actively rolling out Fourth Industrial Revolution technologies at scale”

No wonder we presently have trouble attracting many businesses onto platforms when they are still very much behind in deciding or deploying a strategically thought-through IIoT digital design, that is connecting everything up.

It is equally holding a new form of innovation back, one that is highly collaborative where partners come together to work on more complex problems. Collaborators can achieve solutions only by being “fully” connected up, comfortable with their data, understanding and contribution, both within their knowledge and insights.

The power of multiple-connected ecosystems gives innovation a completely different momentum but it needs this 4th industrial revolution to be fully operative, for a digitally connected world in manufacturing and beyond.

According to a recent Deloitte report: Most manufacturing lines still look a lot the same way they did 10, 20 or even 30 years ago. Operators clock in, have a brief conversation with their crew and shift supervisor and then operate a machine or tool for 8-12 hours before heading home. Depending on the day, the machine may break and need maintenance or an adjustment, the line settings may need to be modified for a specific product or run, or the operator may need to step away to resupply the line or be trained on a new procedure. In 4IR transformed manufacturing sites this is no longer the case. So why are we adopting digital in our manufacturing plants slowly and very cautiously?

The biggest reason is dealing with the fear of the unknown – a lesson in 4IR change management.

This fear of the unknown, that constant blocker of “not been tested in our environment” has greatly inhibited adoption. Equally the nature of much of production has been designed “on the fly” and the equally tough job of connecting the whole process up in a new integrated, fully connected system meets huge resistance. Legacy systems plague the ability to break out of our present traps of silo’s and we are still struggling to solve these issues, machine by machine, a process by process, incompatible software and hardware, piece by piece.

Arguably Industry is trapped by complexity. The system complexity, understanding and investment delays are often huge and difficult to unwind. Many organizations are constantly meeting resistance to change, building some very mixed views of transformation and its lasting benefits. Thirdly the redesign to save space, and to determine more up-stream flexibility needs embracing digital solutions and reliance on partners and levels of collaboration not truly established to date. Any revolution is difficult, costly and requires time to work through a change in “order” to adapt to the new.

The Underpinning drive to connect-up is getting closer to that “crossing over” point

Increasingly, there is this recognition that the competitors seem to be moving faster towards becoming more digital, so it then becomes a race to catch up, as this “digital advantage” is increasingly eroding competitive advantage for the digital laggard, even if he is today the market leader. There also continues today that industry disruption is increasing, by those spotting both opportunity and weakness in present market players. Those that are digital laggards can’t achieve the same flexibility, the speed of manufacturing change, productivity and response as the new investor, building more on “greenfield” principles. The established player has processes that are fixed far more on past trading conditions, where longer production runs produced (past) economies of scale that became over time, more rigid and not adaptive.

Supply chains have often remained reliant still on manual instructions with limited visibility to the whole supply change to manage, adjust and respond. Today, production is changing its philosophy where flexibility is “baked in”, for adapting further upstream and downstream so as to cater to a greater individual client and customer need. High levels of automation are generating the “digital factory” that comes as an offspring of this 4th industrial revolution.

The internal change is slow. There is a strategic resistance, there is a lack of organizational agility and still not the level of commitment this is required, driven from the top. Hence why we are stuck in so many “pilot purgatories”

Yet the threat of not changing is building pressures. this reluctance to embrace a new digitally connected world is feeding the “seeds of destruction”. Customers expect rapid response, reduced delays, tailored designs and greater engagement.  What is going to shift the needle on this dramatically to recognize we are in a real revolutionary period and caution is not your friend but your enemy?

There are increasing use cases being built and shown. The WEF wants to create a neutral, learning platform, which provides the best technical and organizational insights with respect to 4IR technologies in manufacturing to accelerate the delivery of the benefits, to give a sort of safe harbor. Such a learning platform will also facilitate collaborative action and the new partnership between companies and governments. Confidence grows through these learning exchanges This will partly help yet this will not be the real catalyst, that lies in addressing the old legacy problems, in bold, imaginative ways.

Innovation is one powerful catalyst ripe for leveraging in this 4th Industrial Revolution.

I wrote a post over on the Hype site “The Innovation World is Changing Due to the 4th Industrial Revolution“: We first need to recognize that there are twin forces at work, feeding off each other. We are facing greater disruption and an increasing innovation pace. These are constantly combining, relentlessly adding the new shape to our future. We are actually caught up in a very revolutionary period. The prospect of new innovation potential will eventually work through into the world of Industry 4.0 as a major game changer“. It is all ready for those accelerating and being fully committed to their 4IR journey.

We have to recognize the days of simple product innovation are dwindling. where technology, digital solutions, greater customer insights, where a new breed of designers, engineerings, scientists and software talent are combining built through a platform and new innovation ecosystems thinking, are all emerging. This new innovative approach is building greater complexity into our final innovation offerings, yet it is providing increased customer value or societal needs, on problems that require this combined thinking.

We need to recognize that we are increasingly becoming reliant on collaborative platforms, to realize the result: one of more radical innovations, that are capable of winning the hearts and minds of many consumers as they are more adaptable, adjustable to personalization, rapid shifts in trends or solving their complex problems with imaginative solutions, unseen at the time, in ways not possible without embracing and connecting up in the digital world.

Reality dawns, when the penny finally drops as I said in the Hype post “The customer is increasingly at the epicenter of the economy. The products and services are enhanced through the digital capabilities that boost their value and worth. New materials are making our assets more durable and resilient, and data and analytics provide the valuable feedback needed to build even better services and performance in the future. All this connecting and reacting is requiring new forms of collaboration, and we are seeing new types of organizations emerging. They are far more dependent on platforms and ecosystems. Innovation is the unlocking mechanism”

There is a real value in recognizing and delivering on the fourth industrial revolution, we can start to think outside our classic product innovation boxes. We can shift our often-linear thinking as the Industry 4.0 is the revolution that connects all the parts. We can loop, explore, connect, build scenarios, test assumptions, build digital twins to just the product and manufacturing impact.  Recognizing the transforming potential of having fully connected up digital factories will revolutionize how we manage innovation going forward. It shifts our thinking and the management of innovation dramatically.

The ability to have a more “rapid response, flexible manufacturing” can align more to market shifts earlier. We can begin to design products that are more “digitally connected” that can be updated in the consumer’s premise or hand. We can enhance “their” innovation by shortening the time-to-execution and extending the product life cycle, we can build new potential through greater innovation design, based on increasing insight and collaboration.

Growing the business in new ways, we are building revenue based on Industry 4.0.

Deloitte put out one report “Industry 4.0 and manufacturing ecosystems. Exploring the world of connected enterprises“ where it focuses on a few themes that point towards the benefits of IR4. One is growing the business through I4.0 and also integrating the digital and the physical to achieve business objectives

Growing the business comes through the transforming of engineering, research, design and achieving increased levels of customer engagement and interaction and achieving a greater co-design of the products themselves. The key is again through innovation to make already existing products smarter, offer more data relevancy from smart technology, the change to add completely new products and services in format or build alternatives in business model thinking.

We have the ability to apply a greater “intelligence” to marketing products, using analytics and predictive customer tools to draw closer to actual need. The opportunity to improve the aftermarket experiences, extend the life of the product and work towards maximizing uptime all have value. The use of sensors dramatically helps connect the product throughout its lifecycle to be constantly monitored, updated and managed in collaborative ways between the buyer and seller.

Application-based technology, based on connecting in new digital ways, can reduce the idea to market, be able to digitally link design to product intelligence and improve the overall effectiveness of having connected engineering. We can test, provide feedback on early design concepts, adjust them and redevelop their designs within our network of suppliers, customers, and the manufacturing.

Integrating the digital and the physical to achieve business objectives, the arrival of the digital twin.

Deloitte nicely put this as “It is the leap from digital back to physical—from connected, digital technologies to the creation of a physical object—that constitutes the essence of the Industry 4.0 concept”

We are at a point of combining information technology (IT) and operations technology (OT) to enable the creation and use of a digital twin for example and fuse our operating environment into one.

Deloitte points out “The value of a digital twin can allow companies to have a complete digital footprint of their products from design and development through the end of the product lifecycle. This, in turn, may enable them to understand not only the product as designed but also the system that built the product and how the product is used in the field. With the creation of the digital twin, companies may realize significant value in the areas of speed to market with a new product, improved operations, reduced defects, and emerging new business models to drive revenue.

The digital twin may enable companies to solve physical issues faster by detecting them sooner, predict outcomes to a much higher degree of accuracy, design and build better products, and, ultimately, better serve their customers. With this type of smart architecture design, companies may realize value and benefits iteratively and faster than ever before.

A digital twin can be defined, fundamentally, as an evolving digital profile of the historical and current behavior of a physical object or process that helps optimize business performance. The digital twin is based on massive, cumulative, real-time, real-world data measurements across an array of dimensions. These measurements can create an evolving profile of the object or process in the digital world that may provide important insights on system performance, leading to actions in the physical world such as a change in product design or manufacturing process”

“Indeed, the real power of a digital twin—and why it could matter so much—is that it can provide a near-real-time comprehensive linkage between the physical and digital worlds. It is likely because of this interactivity between the real and digital worlds of product or process that digital twins may promise richer models that yield more realistic and holistic measurements of unpredictability. And thanks to cheaper and more powerful computing capabilities, these interactive measurements can be analyzed with modern-day massive processing architectures and advanced algorithms for real-time predictive feedback and offline analysis. These can enable fundamental design and process changes that would almost certainly be unattainable through current methods”

The Deloitte report Industry 4.0 and the digital twin is a highly useful reference to read.

The present organizational inertia is stopping innovation to realize radically different benefits from Industry 4.0

There are so opportunities for innovation well beyond products and services. We require new approaches, new skills, different talent and design capability to realize and leverage the power of connecting coming from industry 4.0. It can offer us, for the first continuous learning, we can tap new a network of talent through ecosystems and platforms designed for greater collaboration and exchange. We can reach far more into underserved markets through greater customer connections and engagement, we can co-design with them.

We can, by embracing 4IR, have available far more predictive and evaluation tools to help improve processes, to reduce or test risk, to prototype and experiment, partly engaged with customers in learning and adjusting design and value. We can build and connect different supply chains that read and react, we can create new ecosystems where we share a common goal and value, we can enable more agile systems that can adapt and respond to changes in real time to reconfigure the ‘connected factory’.

Innovation emerges out of the Industrial 4.0 initiative in radically different ways to explore and exploit.

We are waiting for the fully connected up factory and process so we can apply a very different digital set of innovation tools. Until then we have innovation being managed the current linear, disconnected way.

We fail to have a seamless set of connections into our industrial process world, into our designers, engineers, research scientists and more importantly our customers. Until we all get the same “line of sight” innovation stumbles along its familiar “guessing game” derived of insight and underlying knowledge.

The quickly we connect up and build the fourth industrial revolution we can explore, build and redesign our whole innovation process. We can .look towards managing more radical innovation design in ecosystems and networks, that push existing boundaries, explore new technologies and materials, that all can combine into the Innovation Revolution that follows the Industrial Revolution.