Abstract
Innovation in the field of industrial digital technologies (IDTs), the physical assets of Industry 4.0, continues apace. Other chapters in this handbook describe many examples of the diverse spectrum of IDTs on offer and in practice. The potential benefits of IDTs in enhancing productivity and competitiveness in the manufacturing value chain are much promoted by vendors, but to a lesser extent by academics and researchers, and even less so by suppliers, manufacturers, and customers. This chapter considers the reasons why adoption of IDTs has been slow in many industrialised countries, including the UK, and sets out a business-led approach to maximising productivity and competitiveness in the manufacturing value chain.
TopIntroduction
Industrial Digital Technologies (IDTs) are the physical assets of Industry 4.0. Table 1 lists IDTs identified in the UK’s Made Smarter Review (Maier, 2017) of industrial strategy, with examples of recent case studies of applications in the manufacturing value chain.
Table 1.
Industrial Digital Technologies in the manufacturing value chain
| IDT (after Maier, 2017) | RECENT CASE STUDIES OF IDT APPLICATION IN MANUFACTURING VALUE CHAIN |
| Additive Manufacturing/ 3D printing |
Collins et al (2016); Khorram Niaki & Nonino (2017) |
| Artificial intelligence/ machine learning and data analytics |
Kumar (2017); Wuest et al (2016); Gunasekaran et al (2018) |
| Industrial Internet of Things and connectivity |
Arnold et al (2016); Lade et al (2017); Åkerman et al (2018) |
| Robotics and automation |
Cherubini et al (2016); Krzywdzinski (2017) |
| Virtual reality and augmented reality | Choi et al (2016); Elia et al (2016) |
Whilst the technical attributes of IDTs are described in detail in the academic literature, the business benefits of these technologies are more commonly presented by hardware and software vendors. The general lack of objective, peer-reviewed evidence of business benefits is a concern because confidence is a key factor in the investment decisions of leaders of manufacturing companies, their suppliers and customers.
Prior to the financial crisis of 2007, UK labour productivity was amongst the highest in the G7 group of nations. But while productivity growth has slowed in almost all advanced economies since the financial crisis, the UK slowdown has been more severe than elsewhere (see Figure reproduced below). It is now estimated that it takes a UK worker five days to complete what the average G7 worker can do in four days (Maier, 2017).
Figure 1.
Average growth in labour productivity 2008-2014 (after Maier, 2017)
Key Terms in this Chapter
Industrial Digital Technology: Known also as Industry 4.0 includes the industrial internet of things, robotics, automation, additive layer manufacturing, artificial intelligence and analytics, simulation, augmented and virtual reality, and cloud-based platforms.
Innovation: Is the process of translating an idea or invention into a good or service that creates value or for which customers will pay.
Competitiveness: Is the ability of an economy to compete fairly and successfully in markets for internationally traded goods and services that allows for rising standards of living over time.
Business Strategy: Is a set of competitive moves and actions that business uses to attract customers, compete successfully, strengthening performance, and productivity.
Workforce: Is the total number of people who are employed by a particular company.
Leadership: Is the art of motivating a group of people to act towards achieving a common goal.
Productivity: Is measure of the efficiency of production.
Supply Chain: Is the network of all the individuals, organizations, resources, activities and technology involved in the creation and sale of a product, from the delivery of source materials from the supplier to the manufacturer, through to its eventual delivery to the end user.