What is Beyond Industry 4.0?
Ahead of the 2018 CIM Symposium, we asked keynote speaker Michelle Shi-Verdaasdonk, Vice President, Head of Global Manufacturing at Signify, to share her thoughts on what lies beyond Industry 4.0, and how she thinks businesses can (and must) return to using technology for developing customer-centric capabilities.
Why do you think we need to move beyond Industry 4.0?
We need to shift from ‘thinking robots’ to thinking about people.
In the fourth industrial revolution we’ve been dazzled by technology. We’re experiencing more automation on the physical side of industry, in how we make and move things. On the cyber side, we are able to harness and share knowledge. These developments in cyber and physical spheres meet each other in Industry 4.0 through a wealth of technologies
We’ve built machines to give us better knowledge, learning and efficiency, but now we need to understand how to use them effectively.
My biggest learning in the last six years is that Industry 4.0 is not about the technology. We need to come back to a basic question: What are we trying to achieve?
We have to return to putting the customer at the heart of our business. While technology can give us huge advances in how we do this effectively, it is not the goal in itself. Ultimately our aim should be to identify and meet customer needs.
What market-driven trends do you think companies should focus on?
There are multi-layered trends driven by consumers. These include expectations for faster delivery and the ability to customise products, while simultaneously keeping prices low and quality high. At the same time, there is societal drive towards improved sustainability.
Thinking about my industry – lighting – as an example, we’ve experienced self-disruption in the sector over the last 10 years as we’ve moved from incandescent bulbs to LEDs. Signify is 127 years old as a business, but this last decade has seen this technological transformation of our core products. The reduction in carbon footprint of lighting due to moving to LEDs is the equivalent of taking 24 million cars off the roads.
In our industry we’ve also seen technology used for connectivity across large systems, for example street lighting across cities. Los Angeles was the first city to connect street lighting into a networked system to manage scheduled maintenance. Previously, maintenance workers would need to drive around the city to find lights that had gone out, but now these can be spotted centrally from a dashboard and fixed more quickly and efficiently.
More broadly across other sectors, we’ve seen a rapid change in customer demand for fast delivery. Amazon’s capabilities have changed expectations: now consumers often expect to be able to receive products within 24 hours. They also want products that can be customised, but still pay a low price for them. There are changes in B2B market expectations too, with demand for more transparency and sustainability without paying more.
So there are various external market trends and demands within each sector and across markets. These intersect with technological advances in internal processes. Now we need to be focused in how we use the technology to meet those market demands better.
What capabilities do you think companies need to develop to achieve this?
Companies need people with different skills and different roles, and they need those people to talk to each other.
If engineers only talk to other engineers, there’s a problem. To be market-led, companies must listen to the voice of the customer, which can be represented through people in product management, marketing and sales. There needs to be cross-functional interaction across engineering, IT, marketing and sales, and senior leadership, so everyone understands the customer problems they are trying to solve, and can translate technical know-how into customer-centric capabilities.
The real potency of Industry 4.0 lies in how we now start to think beyond efficiencies and into business capabilities.
When the ideas of Industry 4.0 were embryonic, they were mainly focused on better productivity within factories. That’s fine, it still matters, but it’s the internal perspective. The real potency of Industry 4.0 lies in how we now start to think beyond efficiencies and into business capabilities.
This isn’t easy to achieve, and companies are grappling with it. How do you actually use the technologies really well for better outcomes?
How do we develop our people to meet these requirements?
This is a pressing issue. We struggle to recruit people with the digital skills and vision we want: people with digitalisation in their knowledge DNA but who understand the need for market context.
Businesses need to be able to assess their own digital capabilities, so they are positioned to spot opportunities where they could create a strategic competitive advantage. Seizing these opportunities requires not only in-house technical skills, but also the high-level understanding to make business decisions. But the people with the ability to provide the necessary depth of understanding are too scarce.
How do we improve this? It requires reskilling the workforce, combined with incubating new talent through our education systems. There is no quick fix. This will remain a central challenge and one we must be vigilant to keep addressing.
Michelle Shi-Verdaasdonk is Vice President, Head of Global Manufacturing at Signify (formerly known as Philips Lighting). In this role, she leads the manufacturing function across over 40 factories around the world, delivering operational excellence while taking the function through its digital transformation. Prior to Signify, Michelle held various management positions at PepsiCo, Ford Motor Company and Electrolux in Australia, Asia Pacific, Europe and USA. Michelle is a thought leader in Industry 4.0, not only from the technical aspect, but also from company strategic impact, change management, competency development and social impact aspects.
See a list of all speakers at the CIM Symposium
