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Powering New Zealand’s Next Industrial Revolution

A smart guide to Industry 4.0 for kiwi manufacturers.

Welcome To The Revolution: Industry Just Got Smart

We’re on the crest of a technology-based revolution unlike anything we’ve experienced before.

As is the way with revolutions, it’s bringing upheaval that will impact negatively on those who aren’t prepared for it.  But at the same time, it will deliver significant benefits to those who adapt.

It’s a phenomenon that’s been labelled the Fourth Industrial Revolution, or Industry 4.0, and it’s been described as precipitating fundamental and unparalleled changes to the way humankind lives, works and interacts with each other.

The good news for New Zealand industry is that this looming paradigm shift is bringing with it positive opportunities to boost our competitiveness on the global stage.

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For New Zealand manufacturers, this new technology-driven way of doing things plays to our strengths as innovators, while at the same time eliminating some of the global barriers to markets that have held us back in the past.

In the information age, New Zealand no longer needs to be a victim of the “tyranny of distance” that comes with being a small exporter located in the South Pacific.  The looming impact of Industry 4.0 on this country’s economy is clear when you consider the prediction that within a few years our export receipts from home-grown high-tech ventures will surpass those of the dairy sector.

As our best and brightest in the tech sector embrace this growing opportunity to deliver kiwi innovation to the world, they’re being helped by a parallel revolution that’s transforming the way we communicate our skill and success to a global audience.

 

How did we get here?

What’s driving this disruptive shift in manufacturing processes, an industrial shift significant enough to have been labelled the Fourth Industrial Revolution?

To understand how we’ve arrived at Industry 4.0 requires a brief history lesson on the previous three revolutions, all of which also brought about paradigm-shifting change for both industry and society in general.  The first industrial revolution, in the late 18th Century, was triggered by our ability to capture and harness water and steam to power machines.

Then, starting in the 19th century, the second revolution was brought about through the arrival of electricity, which enabled – among other things – the development of assembly lines and mass production.  The third revolution occurred in the 20th Century, when automation and computers meant that machines, and then robots, began replacing human workers on production lines.

This century has seen the arrival of the Fourth Industrial Revolution through the merging of the power of IT and automation to create “smart factories” where technology dominates.  But this synergy between cyber and physical production systems is more than just a new iteration of what’s gone before.

It has the potential to be even more transformative than the previous three industrial revolutions because it has the ability to fundamentally change, at a global level, the way we live, work, communicate and relate to each other at a scale and level of complexity unlike anything we have experienced before.

The technology behind the revolution

The power of Industry 4.0 is in the ability to utilise and combine multiple technologies to magnify their impact on the wider manufacturing and distribution process.  By employing concepts including cloud computing, artificial intelligence, big data, robotics, the internet of things, and semi- and autonomous industrial techniques, businesses have been able to fundamentally change the way products are designed, manufactured, sold, delivered and serviced.

This arsenal of technologies offers up particularly exciting opportunities for manufacturers in New Zealand. We already have a compelling tech innovation story with numerous world-leading manufacturing successes under our belt.  However, Industry 4.0 makes us even more competitive in global markets by levelling the playing field in an era where physical distance from remote customers is less of a barrier than it’s ever been and local customers are easier to attract.

At Storicom, we regularly explore the emerging technologies that are part of Industry 4.0 in our blog.  Let’s look at how each of the associated technologies is playing a part in this revolution, and the potential they offer New Zealand manufacturers.

The cloud

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At the heart of this industrial revolution is a digital transformation centred around the cloud.

For manufacturers, cloud-based technologies are the gateway to the business benefits of Industry 4.0 including increased agility and versatility, cost efficiencies, faster time to market, and increased customer responsiveness.  The cloud breaks down the “tyranny of distance” that has often hampered access to international markets for  our brightest ideas.

It enables a more mobile and agile business environment, opens up access to an ever-growing range of software solutions and services, provides more flexibility for employees and enables more effective collaboration between staff and customers, regardless of location. The cloud has also lowered computing costs because organisations are able to scale their computing and data requirements as needed.

The cloud is also the starting point for dealing with data – the new commodity of smart manufacturers  and a tool that enables a fresh approach to tasks such as market research, new product development or trend analysis.

The power of the cloud will continue to grow as a vital component for New Zealand based manufacturers such as “smart factory” machinery maker Production Machinery Ltd because it enables the instantaneous 24/7 link with international customers and global markets that’s previously eluded us.

Big data

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Businesses are increasingly creating – and becoming reliant upon – mushrooming volumes of digital information.

Big data is at the same time an enabler of new opportunities and the creator of management headaches. Invaluable as its insights may be, storing, retrieving and analysing terabytes or petabytes of information is an expensive, time-consuming and logistical challenge.

In the factory, big data can enable improvements in supply planning and product quality for smart manufacturers. Through the collection of sensory information, it is a vital component for “predictive manufacturing” aimed at avoiding production downtime.  Big data is also a vital component of the hi-tech solutions New Zealand’s smart industries are developing. An example is agri-tech solutions dependant on sensory information from cropping or pastoral activity.

As big data collection and analysis grows, one trend manufacturers will pick up is the collection and processing of data beyond the boundaries of their own organisation.  Information collected at customer sites via sensors embedded into products will increasingly provide vital post-purchase quality control information to drive improvements in product performance and design.

Artificial intelligence (AI)

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In terms of staffing, the burgeoning role of artificial Intelligence means the smart factory of the future will look very different from the human labour-intensive manufacturing operation of the past.

While AI is doing away with a growing number of both blue- and white-collar jobs in manufacturing, an optimistic vision is that rather than decimating the workforce, AI will result in the rise of more rewarding roles for humans – working alongside AI to contribute decision-making, emotional intelligence and creativity to smart manufacturing operations focused on boosting productivity.

This is being put to use on the factory floor where AI is taking on an increasingly important role in the predictive maintenance of equipment, with sensors monitoring the condition and performance of factory equipment, even learning to predict breakdowns and malfunctions, and taking or recommending pre-emptive avoidance measures.

AI is showing potential in the local market to add value to New Zealand’s vital primary production sector, though technologies that can perform functions such as testing grape quality on the vine.

New Zealand can also look forward to AI playing a role in making distribution and delivery easier for local manufacturers, through a predicted trend in consumers favouring locally-made products.

The Internet of Things (IoT)

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The internet of things is an undeniable technological force, with numbers of internet-enabled devices already exceeding the planet’s human population and continuing to grow at a rapid pace.

In the smart factory space, the Industrial Internet of Things (IIoT) is a vital technology for manufacturers, providing them greater operational visibility on the factory floor and insights into ways to improve their production processes.  But IoT goes beyond improving factory operations. It is also enabling the collection and analysis of data across a full range of industry sectors.

Included in this is , New Zealand’s primary sector, which is well placed to take advantage of the technology. The country has several IoT networks providing coverage to much of the country, enabling, for example, significant efficiencies through the monitoring of dairy herds.

Over the next couple of years, we’ll see IoT and IIoT’s significance increase as the technology’s data analytics capabilities are merged with the power of artificial intelligence to derive ever greater automated insights from the physical environment.

Augmented reality (AR)

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Augmented Reality – the overlaying of visual data on a user's view of the real world – is a valuable tool within the smart factory. AR’s applications can include improving manufacturing processes, logistics operations, and even safety on the factory floor.

Typically delivered through a “heads-up” display that doesn’t distract people from navigating their way around the real world, AR’s strength is that it puts information literally in front of users at the precise time they need it.

In an Industry 4.0 setting, when the right data is available, the technology can be used in a range of applications including factory maintenance, improving the production chain, and as a training, education and safety tool.

In the future, expect AR to become more embedded as a smart factory tool as the technology behind it improves and gets cheaper, and its integration with available data becomes more seamless.

Virtual reality (VR)

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Virtual Reality – which could be described as augmented reality’s more immersive cousin – is another significant technology in the Industry 4.0 tool box.  Like AR, VR can be used to simulate and improve factory operations, leading to improvements in efficiency and safety.

VR’s ability to bridge the physical and digital/virtual worlds is of particular significance to New Zealand manufacturers because it is another of the Industry 4.0 tools that offsets the issues we’ve previously faced as a geographically isolated nation striving to attract overseas customers.

VR simulations can give customers a realistic view of our products no matter where they are in the world.

Robots and Robotic process automation (RPA)

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Not unlike the rise of artificial intelligence, robots and robotic process automation are technologies that are working their way further up the workforce food chain.

Where once it was assumed robots were only good for replacing the most menial, backbreaking jobs on the factory floor, the reality now is that even some skilled white-collar roles can be automated.

As automation and artificial intelligence continue to merge, expect this trend to grow as Industry 4.0 matures.

The next evolution of this process is cognitive robotic process automation - platforms with the ability to automate perceptual and judgment-based tasks through the integration of multiple cognitive capabilities including natural language processing, machine learning, and speech recognition.

Cyber security

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The need to manage the challenges of Cyber Security is an inevitable consequence of utilising the technology tools associated with Industry 4.0.  However, while increasing the amount of data and personal information grows cyber security risk, AI can also play a role in its mitigation.

The risk arises from New Zealand based smart manufacturers being more open to large volumes of data from increasing numbers of sources, as well as new markets.  Effective security involves protecting against any threats at a technology and human level – too often it is people who prove to be the weak link that make attacks possible.

The value of AI in cyber-security comes from it being used as a way to combat this risk.  

Nick Ismail in Information Age, writes “AI can be paired with human intelligence to proactively identify and mitigate threats faster and more reliably,” but warns that while “what AI has to offer is undoubtedly impressive...it shouldn’t be taken as an indication that AI can’t be left to its own devices.”  He goes onto say “true intelligence is human and true victories in cyber security will emerge from human intelligence.”

Protecting against security threats is a necessity for all businesses, and AI can play a role - technology and people working together to reduce threats.

The bottom line: it’s about NZ’s economic prosperity

By embracing the automated, intelligent and interconnected technologies at the heart of Industry 4.0, New Zealand manufacturers can unleash this country’s next economic renaissance.  Smart manufacturing offers the opportunity to move further up the value chain of production and exporting by carving out a valuable global niche.

The benefits of the country’s smart manufacturers moving further towards value-added production was highlighted in a recent Government report on the future of New Zealand manufacturing.  A value-add focus, where products are differentiated through innovation, quality, brand and service means higher returns and efficiencies for those New Zealand manufacturers who embrace this approach.

By tapping into valuable niches in global production networks, local firms can become efficient and profitable handling short-run production – something New Zealand specialises in.  The potential upside of Industry 4.0 is also about embracing “servicification” – incorporating more services into every stage of production to enhance a manufacturer’s overall offering.

Evolving global market dynamics (e.g. globalisation) are driving development and change.  This has resulted in increased competition for local firms and the outsourcing of manufacturing offshore.  Embracing Industry 4.0 will have benefits for all manufacturing sectors by enhancing returns from using technology.  There is also the opportunity to repatriate manufacturing to New Zealand where the cost benefits of outsourcing overseas have diminished.

From the primary sector, where we have generations of knowledge, to one focused on the newest emerging technology, Industry 4.0 can support New Zealand’s future productivity and prosperity.

It’s also about getting a life, and getting educated

As well as boosting the productivity and performance of both individual manufacturers and the economy in general, Industry 4.0 is a catalyst for improving New Zealanders’ work life and boosting the nation’s skillset.

As well as enhancing productivity and efficiency, a key aspect of digital transformation in the factory should be a focus on improving conditions for staff, with flow-on effects to their broad lives outside the workplace. This benefits not just the business – freeing people up to be more customer-focused – but also for the wider economy.

The concept of “building billion dollar businesses from the beach” is an aspiration promoted by Xero founder Rod Drury – not just for his own globally-expanding software company but as a mantra for all kiwi entrepreneurs who he believes have the ability to combine world-reaching technologies with the local lifestyle while on their way to success.

Improving the skill levels of staff is part of the journey, and another win-win element of the Industry 4.0 transformation.  As Belgian politician, economist and businessman Alexander De Croo said: “Every industrial revolution brings along a learning revolution.” Industry 4.0 is no exception.

Manufacturing has often been seen as an unattractive career choice option for young people. But when manufacturing and technology combine to produce a sector where a highly-skilled workforce is producing high-margin exports, it creates a virtuous circle of growth in well-paying jobs and economic activity.

The Communications Revolution

At the same time as Industry 4.0 is ushering in a new, smarter and more lucrative future for manufacturers, a parallel revolution is taking place that’s transforming the way those same manufacturers seed, nurture and capitalise on their relationships, by using business communication to succeed.

Just like Industry 4.0, this relationship revolution (Communication 4.0) is being enabled by the clever use of new and complementary communication technologies.  Ubiquitous connectivity, the rise of social media, the power and reach of online search, the emergence of marketing automation and the reality that every company is now a media company are key changes driven by recent technological advances.

While these changes have forever altered the way we communicate, they have opened up opportunities for engagement with all an organisation’s internal and external stakeholders – from its own employees and board of directors through to potential and current customers, government and the wider industry.

Just as Industry 4.0 followed the three previous industrial revolutions as outlined above, there have been four stages to the development of communication as a sector.  The first three were the rise of the newspaper in the 19th Century, mass media and broadcasting in the mid-20th Century, and the arrival of the computer and the Internet a few decades later.

The current personalised communication revolution is the fourth, which has set the scene for powerful and efficient engagement opportunities between manufacturers and customers through clever use of a combination of inbound marketing, and public relations.  This new communication approach can – and should – be applied across the entire scope of marketing, sales, customer service and customer retention activity.

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Business Communication Success

This is referred to as Business Communication Success.  Or, achieving business success through communication.

The engine of all strategies for growth and success is communication, whether internally to help employees identify with and activate the purpose of the organisation, or externally to help customers identify and embrace the value the business delivers.

To achieve the goals and objectives of the business, it is absolutely crucial to communicate effectively [through a strategy] and efficiently [with a plan].

In the same way that technology can augment human intelligence, so too can technology augment human communication.  Relationships as a way of doing business is generations old, especially in New Zealand where connections are close and word of mouth moves quickly.

Technology cannot replace relationships but can be leveraged, as a management tool, to start and strengthen customer relationships and protect and promote the business and its purpose.

This new, integrated and automated approach to marketing and sales suits New Zealand manufacturers.  It is the ideal platform for taking our innovative manufacturing solutions to local and international markets.

New Zealand, you’ve got this

Industry 4.0 is ushering in exciting times and huge opportunities for New Zealand manufacturers who are prepared to be brave and back themselves by embracing the opportunities presented by a technology-based approach to production.

It’s about powering New Zealand’s next industrial revolution. Like all revolutions, we’re not sure exactly where the journey will take us, but we do need to learn quickly and get onboard.

Uncertainty about the future shouldn’t be a barrier to getting involved. Back in the 18th Century no one knew where the ability to harness steam would eventually take us, or the huge, societal transformation it would unleash. Now let’s see where Industry 4.0 takes us.

If you have New Zealand or international aspirations, please contact us – we’d love to help tell your story so as to build important relationships that will help you grow your business.