Industry 4.0
The trend toward digitalisation and integration of industries in Austria which is commonly referred to as “Industry 4.0” has changed drastically over the years. This topic is currently discussed as the potential fourth industrial revolution. There are a lot of opportunities and challenges for industry and manufacturing sites in industrialised countries which will be discussed in this chapter.
The fourth industrial revolution represents the integration of industry and is currently being discussed in science, industry, politics and the media. The European Commission and the other industrialised nations consider the development and use of new production and process technologies as a strategic challenge for the industrial manufacturing. Therefore, a key characteristic of Industry 4.0 is how to implement the integration of people, objects and systems via the Internet. The aim of this process is to have a seamless horizontal and vertical integration of process steps and process hierarchies for the purpose of increased productivity, resource efficiency, quality and flexibility. Therefore Industry 4.0 faces the challenge how to implement solutions and handle their consequences, particularly for the workforce and workplace.
Smart factories and smart products are part of the development of Industry 4.0 which incorporates highly sophisticated production networks and products with knowledge, which support the future implementation and manufacturing process. However, these innovations intend to improve the flexibility, in order to meet customer requirements. This is considered a key benefit of Industry 4.0, which develops opportunity and challenges for the implementation of new business models. In addition, the use of information technologies (IT) leads to virtual product development, which enables companies to create the entire value-added chain, inside and outside the enterprise.
The future outlook of this fourth industrial revolution is that it is creating a paradigm change in the interaction between man and machine. Companies are going digital, potentially reducing workforce and acquiring a high level of automation. Therefore, there are a lot of effects on the working world and the role of individuals. However, Industry 4.0 is supporting the creativeness and innovation of individuals, which incorporate robots and work assistant systems to organise age-appropriate and ergonomic production, when it comes to demographic factors such as staff short- ages and ageing population.
According to BCG, they define Industry 4.0 as: “the rise of new digital industrial technology, known as Industry 4.0, is a transformation that makes it possible to gather and analyse data across machines, enabling faster, more flexible, and more efficient processes to produce higher-quality goods at reduced costs. This manufacturing revolution will increase productivity, shift economics, foster industrial growth, and modify the profile of the workforce—ultimately changing the competitiveness of companies and regions.”
Digital Transformation Model
The following model will explain in a nutshell about Industry 4.0 and Transformation.
The model is based on the dynamic capability theory by Teese to describe the transformation phenomenon and on the ambidexterity theory to explain the innovation dynamics (explore, exploit).
Digital Transformation Model von Kormann
Explore: Some examples of exploratory topics that can be usually implemented in the medium term are disruptive innovations, new business models, new customer groups and markets, new business processes (e.g. cloud services for the first time instead of own IT).
Exploit: Some examples of short-term exploit topics are incremental innovations of existing business models and customer segments, improving efficiency, or using digital technology in supporting business processes.
Transform: Some examples of mostly long-term transformation themes are the transformation of analogue to digitized business models and organizations with all the accompanying change and cultural themes, digital leadership, data-driven management, or the long-term development of employee skills.
Sources:
Book: „Elf Leitbetriebe auf ihrem Weg zu digital Champions“, ISBN: 978-3-200-05437-0, Author: G. Kormann, Co-Authors: F. Pacher, F. Schilling
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