6 Challenges Manufacturers
Face With Industry 4.0

Challenge 1: Digital Skills

The most critical challenge is the lack of relevant skills needed to function in the increasingly digitised world. This is exacerbated by the constant and rapidly changing nature of technology as its innovation cycles speed up, and the proportionate redundancy of existing skillsets.

Industry 4.0 is predicated on the interconnectedness of the IoT, the Internet of Things, which links together people, production and systems. This requires digital skills on three levels, from the people controlling the machinery with digital devices, to the software engineers who have to maintain complex automated production lines, and finally to the analysts who have to deal with the big data such interconnected systems produce. This big data will include information from markets and financial analyses, as well as supply chains and production statistics, and will take skilled data analysts to interpret in order to gain useful insights for competitive improvement.

Challenge 2: Access to Finance

With most existing production plant requiring a complete repurposing or replacement, the level of required investment is daunting, and even on a phased plan could take some time to achieve any viable returns. Financing is taking a much earlier position in strategic planning, with alternative methods of finance being considered such as flexible financing. This approach would demand measurable outcomes at every stage, which might include reduced energy expenditure, increased productivity, faster or more competitive product development and more rapid market responses.

Challenge 3: Creating a Collaboration Culture

As everything becomes digitally connected and ultimately more transparent, there is a need for increased collaboration across all levels. Big data analysis from production, logistics, engineering, sales, finance, product development and more, can produce a combined overview that identifies potential business opportunities or improvements. There also arises an increased need for collaboration with external providers and agencies, such that digital co-ordination skills will be required to process the necessary data streams.

Challenge 4: Data and Cyber Security

Big data and the sheer volume of digital traffic already active on cloud applications has given rise to considerable concern over the security of sensitive information. Protecting copyright and patented processes from hackers will become more complex and will probably require dedicated cyber security handlers to ensure the safety of proprietary information. The distributed ledger system and increased transparency in a collaborative culture may help to protect non-sensitive information anonymously, and allow deeper insights through data sharing.

Challenge 5: Access to Proof Points

With the initiation of phased investment and innovative financing schemes, investors are looking for some positive proof of a return on their investment (RoI). The rapidity of transition and the lack of a solid body of clear case studies means that investors have little data on which to base their financial projections. A database of such proof points would help investors see a definite RoI.

Challenge 6: Strategic Management and Planning Capabilities

Industry 4.0 has caught out many people lacking the ability and skills for a digitally integrated future. Managers are suddenly faced with strategic planning on a scale they mostly cannot begin to comprehend, and only a few forward-thinking companies have taken the transformation in their stride. This often means collaborating with others to draw on collective skills, and absorbing the different strategic planning concepts that a digital world demands. These include a means of initiating a phased investment strategy, establishing a process of evaluating what commercial benefits are gained in each phase, and determining how to make any necessary adjustments in successive phases.