Member Article

‘Integration gap’: A fragmented approach to Industry 4.0 tech trials could undermine growth in recovery

56% of UK manufacturers have achieved digital transformation in certain business functions

However, few have achieved cross-functional integration of Industry 4.0 technologies

Assessments of the benefits of some Industry 4.0 technologies have not yet started or are incomplete – only 7% of manufacturers confirmed they had completed an assessment of the IoT

The main barriers to investment in digital transformation programmes are ‘funding’, ‘a lack of digital skills’ and ‘resistance to change’

While UK manufacturers are investing in trials of Industry 4.0 technologies, few have yet completed their integration and in many cases digital transformation programmes have only reached an ‘initial stage’, according to joint research carried out by Cranfield University and top-20 management consultancy, Vendigital.

This ‘integration gap’, could mean UK industry is at risk of missing out on growth opportunities emanating from the current phase of recovery, as economies in many developed nations rebound strongly.

More than half of senior-level decision makers at UK manufacturing businesses participating in the study – 56% - confirmed that they had achieved digital transformation in certain business functions. However, further analysis of the findings established that very few had actually taken the next step by integrating the technologies across all business functions. The study concluded that, in almost all cases, digital transformation programmes had in fact only reached an ‘initial stage’.

Alec McCullie, partner and digital tech specialist at Vendigital, said:

“UK manufacturers are aware of the benefits that Industry 4.0 technologies can bring in terms of driving productivity and streamlining business processes. However, the distinct nature of the technologies and the perceived complexities associated with their application, can make it difficult to get a clear view of the benefits they bring.

“Most investments in digitalisation are focused on function-based trials or experiments, which serve a purpose by demonstrating value on a specific project but can miss a holistic view that may also include more intangible benefits such as attracting top talent. It is not unusual for businesses to have several overlapping trials underway at once and this makes it difficult to visualise the benefits that a fully-integrated, cross-functional digital transformation programme could bring.”

While the research showed that senior-level decision makers have a sound knowledge of the full range of Industry 4.0 technologies, which includes everything from the IoT and big data to cybersecurity and augmented reality, a lack of analytical skills is holding back progress. For example, the research found that 30% of companies have not yet made a formal assessment of the application of the IoT in their manufacturing processes and a further 30% are at testing stage. Only 7% of respondents had completed an assessment of its potential benefits.

Alec McCullie commented: “We can see from the research data that tech trials are happening, but many of the businesses we spoke to lack access to the dynamic data and capabilities needed to support a business case for further investment.”

The main barriers to investment in digital transformation programmes identified by the research study are linked to funding and a lack of digital skills. However, another key barrier identified by respondents was ‘resistance to change’ – in fact, this was viewed as equally important as a lack of digital skills.

Alec McCullie added: “From a cultural perspective, some businesses are struggling to make digital transformation an empowering experience for employees. Some may feel that their jobs are being undermined by the digital technologies under trial rather than viewing their introduction as an opportunity for skills development and an acceleration of strategic objectives. Digital transformation programmes should be viewed as an opportunity to create businesses that are more dynamic, innovative and inclusive.”

In order to realise the potential of Industry 4.0 technologies, businesses should put in place a bespoke digital transformation plan, and consider how best to assess the value of different technologies and ensure they are effectively integrated. To guide decision-making in this area, Vendigital has published a Digital Transformation Roadmap, which can viewed alongside thefindings of the joint research study carried out with Cranfield University, here:
[https://vendigital.com/categories/reports-white-papers/digital-transformation-a-smarter-way-back-to-growth/]

About the research study

Sponsored by Vendigital, the field research was carried out by postgraduate students at Cranfield University in Q2 2021. A total of 38 companies participated in the research, which involved an online survey of senior-level decision makers, followed by a series of one-to-one interviews.

This was posted in Bdaily's Members' News section by Vendigital .