4IR Technologies in Manufacturing
(5 minute read)
Leading manufacturers are applying Industry 4.0 or Fourth Industrial Revolution (4IR) digital technologies in generating value across their enterprise. This blog from McKinsey highlights a few key features.
Research carried out by the Global Lighthouse Network, a collaboration between McKinsey and the World Economic Forum (WEF) identifies the transformative power of 4IR technologies and their wider socio-economic impact, estimated to create around US$3.7 trillion in value by 2025.
The research identifies a few ‘Lighthouses’ who have integrated advanced 4IR innovations in End-to-End (E2E) manufacturing in their businesses across supplier and customer networks. These Lighthouses have innovated new operating systems in the way they optimise their business, people, and technology processes. Some key insights about their success factors can offer valuable lessons to aspirants.
Success Factors
Lighthouse organisations are adopting critical 4IR technologies across digitisation, automation, advanced and predictive analytics, virtual and augmented reality, and the Industrial Internet of Things (IIoT). Using these technologies, they are connecting their E2E value chains and scaling up operations across their entire network, reshaping the entire customer journey. In the process they are experiencing much higher ROI compared to their counterparts who follow more traditional methods.
In the process of scaling up, Lighthouses are facilitating six enablers and applying them broadly across the entire value chain.
- Agile approach and continuous iteration
- Tech ecosystem facilitated by digital infrastructure that enables new levels of collaboration
- IIoT academies boost workforce skills through training in gamification, digital learning, VR and AR tools, and real time AR and digital instructions
- IIoT / Data architecture stacks are selected for next-gen tech capabilities which helps innovation acceleration within weeks, breaking down information silos
- Agile digital studios facilitate ideation by co-locating data specialists, engineers, IIoT architects and domain experts so results are delivered in sprints
- Transformation office supports enterprise wide change.
E2E Lighthouses
End to End (E2E) Lighthouses are also reshaping the customer experience by developing partnerships across value chain stakeholders. They achieve mass customisation on demand and share data to shape rapid responses to fluctuating market conditions. Shared data science and predictive analytics helps them integrate supplier processes. Additional outcomes include increased efficiency, accuracy and reduced lead times.
The customer is placed at the centre of process design and operations. Data efficiencies in processing and analytics enhances customer journey. Seamless connectivity across functions allows for efficient communications and rapid turnaround times. Continuous connectivity across organisations allows them to create new manufacturing ecosystems.
By reshaping business, people, and technology processes, Lighthouse organisations are leading the way in embedding 4IR innovations in manufacturing.
