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Germany is famous for manufacturing, so the world looked on when it met at the famous Hanover Fair last week. In particular, we wanted to see how it was handling what is called Industry 4.0.
We have had three “industrial revolutions”, the last being in the second half of the 20th century when computers began to be used. The first was the original Industrial Revolution of the 1700s created by the steam engine and mechanical textile looms. The start of the 20th century saw the second when the concept of interchangeable parts evolved into mass production, aided by the use of electricity.
Now it is different. The computers and robots that helped create the third revolution have not disappeared but they are capable of being used in quite different ways, and are being added to by a host of new technologies whose costs have fallen dramatically in the last ten years. Part of this is the fables ‘Internet of Things’ when inanimate objects communicate with each other and take autonomous decisions.
This is what we hear of as disruption. Microsoft have published a report, which used Harvard Business Review services to survey nearly 800 diverse businesses, that indicates that nearly all expect huge changes in their business by 2020. Quite a few talk about their existing model becoming obsolete.
We know that in a tannery we still need to remove the hair and tan the hide, but how it is done is clearly starting to change. Anyone who looks at a modern lime yard and compares it with 40 years ago can see a huge difference. The different approach between an automobile leather tannery and a footwear leather tannery making shorter runs and a wide variety of products has become far more obvious in recent years and looks likely to extend. How we buy and maintain our machines is changing, and the information they can collect and tell us too.
Beyond that, think about the need to reduce stock holdings throughout tanneries to move goods through faster; and essential requirement for speed in an always on society where things are bought when they are seen and delay is not acceptable. Robust data and communications will be needed to avoid catastrophe as step by step our old safety nets are removed.
And how is German industry handling Industry 4.0? Quite well, according to the Financial Times; even the smaller companies. While last year it was just a “buzz word”, this year they are “ramping up”. They are using big data and the Internet to introduce predictive maintenance, automated reordering and selling service alongside products. We will all have to change.
3rd May 2017
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