October 12, 2017
If you sometimes feel that your company is missing the boat when it comes to digitalization and the realization of Industry 4.0 gains then you will feel positively chained to the jetty with Industry X.0.
But consultants Accenture can see opportunities inherent in trying to focus Industry 4.0 thinking away from products towards services and value and what it calls “outcomes.”
So, the internet of things becomes one of the processes and the sort of channels to value creation that manufacturing industries understand.
It has launched an Industry X.0 practice that wants to help focus the minds of business on how the right combination of digital technologies can yield the most benefit.
Research among 930 senior executives from 12 industries and 21 companies helped determine the current state of play. It was used to identify 10 technologies it believes are currently critical for business: 3-D printing, artificial intelligence (AI), augmented and virtual reality (AR and VR), autonomous robots, autonomous vehicles, big data analytics, blockchain, digital twin (the digital replication of physical assets), machine learning and mobile computing.
Chemical companies clearly are adopting some of these technologies, from the back office, through research and development, manufacturing and logistics towards customer interaction. But the consultants believe that the right combination of new technologies could increase chemical company market capitalization on average by $4 billion.
In terms that all companies will understand, Accenture talks of additional costs savings for a chemical company of $91,261 per employee from the right combination of AR/VR, autonomous vehicles, big data analytics and digital twin technologies.
Companies would have to go a long way to do this. Senior executives understand the power of digitalization. Interestingly, however, there is a divide between those who think in terms of revolution and those in terms of evolution.
The Accenture research showed that only 13% of the executives it surveyed said their businesses were getting greater efficiencies and business growth from new revenue streams for their investment in digitalization. For chemical companies the result was lower, at 11%. Accenture says it believes this is due largely to the “piecemeal deployment and implementation of investments in digital technologies.”
Research conducted for the European Petrochemical Association (EPCA) has shown, however, that for the petrochemical industry, at least, it is still early days on the digital journey.
Chemical companies and their logistics providers are investing in cloud computing, big data and advanced analytics, IT platforms for shared logistics, low-cost sensor technology and digital identifiers (persistent online identifiers or handles).
But they are said to be less than half way towards realizing their digital ambitions.
Professor Anne Vereecke of the Vlerick Business School in Belgium said last week that the petrochemical supply chain is well aware of the impact of digitalization, is off the starting blocks and running.
Accenture’s senior managing director, Resources, Growth & Strategy, Dave Abood said: “Most of the businesses we work with understand the power of digital. They see the potential for digital technologies to bring about transformation and growth and are making big investments in a variety of leading technologies.
Unfortunately, many aren’t getting the most out of their digital investments. The challenge is that to do so requires a careful balance of transforming core businesses while scaling new ones, which demands new talent, new skills and new competencies.”
Companies will pivot around these changes. The Accenture research indicated that rather than destroying jobs Industry 4.0 will create new ones as companies seek to reinvent themselves.
New responsibilities will be added to existing roles while there will be some entirely new jobs. The transformation, however, demands the sort of talent that for chemical companies is [1] proving hard to find.
References
1. https://www.icis.com/subscriber/news/2017/10/03/10148380/epca-17-chemical-industry-challenge-is-to-acquire-digital-talent/.
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