“Manufacturers must turn ambition into action to drive Industry 4.0 value” urges KPMG

While many manufacturers – including those operating in the security business sector – are investing in Industry 4.0 capabilities, few have achieved the scale and integration needed to drive enterprise value. That’s according to KPMG’s new report entitled ‘Beyond the Hype: Separating Ambition from Reality in Industry 4.0’.

The detailed and thought-provoking report finds that, while many manufacturers are working towards creating the ‘factory of the future’ or a great digital enterprise, few have worked out how to apply those capabilities across all of the corners of their operations. Most are still experimenting with discrete pilots or trialling solutions.

“UK manufacturers have shown more enthusiasm than preparedness for Industry 4.0, with our latest report reflective of the fact that this is a global trend,” noted Stephen Cooper, head of industrial manufacturing at KPMG UK. “In February, we released our ‘Rethink Manufacturing’ report, which showed that the majority (56%, in fact) of UK manufacturers agree that Industry 4.0 represents an unprecedented opportunity to revitalise manufacturing across the country. However, they’re far less sure about how it will affect their business and whether they have a coherent strategy and the right talent and skills in place to capitalise on it.”

The report includes detail around a number of benchmarking exercises which found that many organisations demonstrated only a low-to-medium level of maturity in key areas such as demand-driven supply chains, Machine-to-Machine (M2M) communication and digital twinning. However, and on a pleasing note, they showed somewhat better maturity in cloud, robotics, Big Data, cyber security and Internet of Things technologies.

Alec McCullie, associate director and UK lead for Industry 4.0 at KPMG, added: “Gaining experience with Industry 4.0 technologies is certainly important, but the real value of Industry 4.0 comes not from the component technologies or capabilities, but rather through smarter processes that integrate automation, data, analytics, manufacturing and products in a way that delivers unique competitive advantages and unlocks new business and operating models. This cannot be accomplished without achieving larger scale and greater integration across functions and a willingness to disrupt the status quo.”

Driving value from investment

Rather than focusing on pure investment numbers and reported investment returns, this research centres on identifying how the leaders of today’s Industry 4.0 ‘revolution’ are driving value from their investments and preparing their organisations to take advantage of emerging opportunities in the future. The report also identifies those areas where manufacturers could be taking a more integrated and strategic approach to Industry 4.0 adoption. In each area, it offers practical advice for driving adoption and creating value.

“There are a number of key focus areas that are creating challenges for manufacturing executives across the value chain,” continued McCullie, “and particularly so as they work to transform their organisations for the Industry 4.0 environment. This includes issues such as developing a robust, goals-focused strategy, scaling up the programmes, managing impacts across functional areas, integrating with products and improving the value network.”

In conclusion, McCullie told Risk UK: “Success in Industry 4.0 isn’t about how much you invest. The ‘winners’ will not be those with the deepest pockets. Rather, in order to win in tomorrow’s competitive and rapidly changing environment, manufacturers need to start being bolder in their vision, strategies and actions.”

About the Author
Brian Sims BA (Hons) Hon FSyI Editor, Risk UK Pro-Activ Publications

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