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Digitalisation: How prepared is UK manufacturing?

08 May 2018

Digitalisation is changing the way in which we do business. Today’s always-connected working environment enables people to work how they want, when they want. This doesn’t just apply for office-based roles though — industrial enterprises are altering their business models to take advantage of the fourth industrial revolution. However, some countries are much further ahead than others.

Here, Nick Boughton, sales manager at Boulting Technology, explains the key findings from the World Economic Forum’s Readiness for the Future of Production report and what it means for UK manufacturers. 

Industry 4.0 has opened many new opportunities for the industrial sector, from improved flexibility and increased efficiency, to higher product quality and increased energy savings. Despite the potential benefits, many manufacturers, particularly small and medium sized enterprises, have not been able to take advantage of the new technologies. Many have identified general or even specific benefits but are unsure about how to proceed and may be concerned about the cost and cyber security implications. System integrators, such as Boulting, are working on approachable solutions with clear, short term benefits, to help these clients into the world of Industry 4.0.

Readiness for production

In January, the World Economic Forum (WEF) launched its first Readiness for the Future of Production report, which revealed Britain to be one of just 25 countries in a positive position to benefit from Industry 4.0. 

Some of the world’s richest and most powerful people, including Donald Trump, Justin Trudeau, Theresa May and Emmanuel Macron took to the snowy Swiss town of Davos for the WEF’s annual meeting. Since its humble beginnings in 1971 as a management forum, the event now sees over 3,000 of the world’s leading business, financial and political figures discuss a variety of topics that can aid in improving the state of the world. 

As part of this year’s meeting, the WEF launched its Readiness for the Future of Production report, which details a new framework assessing how well positioned global economies are to benefit from Industry 4.0. 

The framework is made up of two key components: structure of production, which measures a country’s scale of production and drivers of production, which looks at the key enablers that allow the country to capitalise on Industry 4.0.

Japan was identified as leading the way in current baseline production, while the US is best positioned to capitalise on Industry 4.0 in order to transform manufacturing production systems.

How ready is the UK?

While the UK has a long history of manufacturing, in recent years the industry share in its economy has declined from 25 percent in the 1970s to less than 10 percent in 2017. This decline in market share has had a significant impact on jobs and indeed the number of manufacturing facilities around, with many shutting down due to production being cheaper abroad. 

Despite the fall in market share, the UK has a strong ability to innovate and is leading the way in high-tech manufacturing industries such as aerospace and pharmaceuticals. This has led to the creation of the smart factory, where machinery and equipment are able to improve processes through automation. Between January and October 2017, the UK aerospace industry grew by a rate of 9.8 percent, making it the fastest growing aerospace market among G7 countries. 

The rise of the smart factory has resulted in a definite skills gap, however, with many manufacturers not having appropriately trained staff to capitalise on the benefits of technologies such as robotics. The UK Government has put plans in motion to tackle this issue with the launch of the Made Smarter review, which looks at three of the industry’s key challenges: leadership, adoption and innovation. 

Drivers of production

In order to support the development of the global manufacturing industry, the WEF’s report identified six drivers of production that represent the factors and conditions that need to be met to capitalise on Industry 4.0 technologies. These drivers are technology and innovation, human capital, global trade and investment, institution framework, sustainable resources and demand environment. 

Technology and innovation

Emerging technologies such as edge computing, digital twinning and virtual reality are reliant on a strong technology infrastructure. While the UK is a leader in innovative technologies, many manufacturers fall at the first infrastructure hurdle due to a lack of connected devices and the ability to effectively analyse and make use of the data produced by their equipment. 

With many systems, such as motor control centres (MCCs) and programmable logic controllers (PLCs) having a long-expected lifespan, older devices do not have the capability of connecting to a wider network unless retro-fitted with the appropriate sensors and communication packages. 

Once connected, digital security and data privacy can become an issue. To counter this, manufacturers must have a strong cybersecurity policy in place when adopting new technology. 

Human capital

People are often critical of transforming production facilities. If the workforce doesn’t evolve, a business has no hope of changing its operations. The introduction of new technologies has led to a change in the skills required by manufacturers, with many struggling to adapt and therefore missing out on the benefits of the Industrial Internet of Things (IIoT). 

In the coming years, there will be a further shift in production from labour-intensive roles to those that are more knowledge and skills based. With this shift, fears of job losses have risen once again. According to a YouGov survey, 13 percent of employers think that more than 30 percent of jobs will become automated in the next 10 years. While some jobs will be managed by industrial digitalisation technologies (IDT) such as robots, many new roles will be created that are more skills based. 

With this in mind, the UK Government’s Made Smarter review will be key to ensuring the manufacturing industry is fully equipped to benefit from Industry 4.0. As new roles are created, the training of new staff and re-training of existing employees will be vital in addressing the skills gap created by the evolution of technologies. 

Boulting Technology is tackling the skills gap head on with ongoing training and development for all staff and a robust apprenticeship programme. As new technologies are introduced, it’s important that staff undergo relevant training to effectively incorporate new technology into their work. All Boulting Technology employees are encouraged to undertake continuing professional development (CPD) and are supported by the business to do so. 

The Readiness for the Future of Production report and the Made Smarter review will play significant roles for those looking to drive innovation through Industry 4.0. But while investment in digitalisation brings a multitude of benefits, it can also lead to increased vulnerabilities, particularly from cyber-attacks. UK manufacturers must look at the entire value chain, from product design to the delivery of goods, transforming their internal infrastructure in order to remain competitive.

Industry 4.0 is well underway and rather than just playing catch up, the UK industrial market should be looking at what’s next. By doing so, perhaps we can climb the ranks of the next WEF report. 

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