Manufacturers urged to embrace ‘Fourth Industrial Revolution’

The warnings are clear. For the ‘fourth industrial revolution’ to succeed it requires transformational change at a pace that many UK manufacturers are not matching.

Some don’t understand how it will affect their business, according to industry watchers. Meanwhile, the availability of talent is seen as the main obstacle to realising the benefits of ‘Industry 4.0’ investments. And in some cases the adoption of these new technologies is viewed as a ‘bolt-on’, rather than central to business future plans.

These are just some of the findings of two recent reports from KPMG. There is also growing concern that manufacturers are putting investment decisions on hold because of Brexit uncertainty.

Philip Harris, associate partner and Industry 4.0 leader at KPMG in the UK, said: “Industry 4.

Phil Harris

0 presents a huge opportunity for the UK’s manufacturers to improve productivity, but it could also be a threat to those who don’t embrace it and fall even further behind. They have a chance to catch up, but only if they act now.”

KPMG has also warned chief executives in manufacturing businesses “need to do more” to close the gap between business strategy and tech investments.

It said: “Our conversations with manufacturing leaders highlight that one of the central reasons technology implementations fail is lack of buy-in from existing talent.”

However, there is cause for optimism in the North. Rob Elvin, managing partner at Squire Patton Boggs, said this part of the UK is driving the manufacturing and technology agenda forward. “It is what the North does,” he added.

He also believes that momentum is beginning to pick up again in advanced manufacturing, with a number of innovative projects on both sides of the Pennines leading the way, including advances in graphene

June Smith

technology.

However, he urges more action to drive the government’s Industrial Strategy forward, believing Brexit has put it on the back burner. Elvin added: “Unfortunately so much time, effort and political capital is being spent on just one single issue at the moment.”

June Smith is North of England regional membership manager at Make UK (formerly the EEF) and is based in Sheffield. She believes helping Yorkshire SMEs to understand digitalisation and what it can deliver for them is key to the sector’s future success and bridging the skills gap.

Smith said: “It is about looking at what a particular business needs and what is relevant to them. We also need people to demystify things for businesses.” She believes that businesses that have embarked on their digital journey can play a part in this by opening their doors to other manufacturers and showing them what good practice is.”

Jon Hughes

Smith also said there is another message that needs to be delivered to Yorkshire SMEs – that technology is not going to take jobs but is going to make them more productive. She added: “It is not about taking jobs, it is about future-proofing your business. It has to be about dispelling myths and understanding what is right for you.

“Look at return on investment, look at how someone else is doing it. It is about moving people forward.”

Jon Hughes, who leads KPMG’s Operations Consulting practice in the North, said supply chain companies are generally behind where they should be when it comes to adopting new technologies. He added: “If you look at it historically, the UK has under-invested in technology compared to the US.”

Hughes also echoes warnings from Make UK that Brexit uncertainty has become a big issue for manufacturers. “We are seeing investment delayed because of Brexit,” he added.

Make UK’s chief executive Stephen Phipson has said that more than 70% of its members have frozen investment.

Hughes added: “People need to decide whether they are going to go for it and really get on board and make the most of Industry 4.0. If they don’t, their competitors will.”