We are all aware of the rapid pace of change across multiple industries due to significant technological developments and the reduced costs of using them. These trends are distinct from the greater level of process automation, driven by advances in electronics and information technology, since the 1970s. The greater adoption of industry 4.0 is paving the way for disruptive approaches in a number of areas, including medical device manufacturing.
It’s important to note that these technologies are not new. “What’s changed is the cost, and the fact that the connectivity, miniaturisation, computer speeds and infrastructure has all changed to make it a reality to apply it at scale,” says Karen Taylor, director of the Centre for Health Solutions at Deloitte. This is in line with Moore’s Law, which predicts that the capacity of microchips, bandwidth and computers doubles every 18 months, representing exponential growth.
Humans and robots
In light of the highly regulated nature of the medical device industry, it is imperative that a strategic approach to implementation is taken. However, there remain huge opportunities for industry 4.0 to enhance manufacturing processes.
One such technology is factory automation, which makes production lines more efficient, enhances resource effectiveness and improves productivity. Although seemingly simple to integrate, they can be complex to manage on a daily basis. “Factory automation is probably the simplest application of robotic process automation,” says Taylor. “But these technologies, especially if they’re going to have connected sensors embedded in them, are very sensitive to change and need to be highly monitored.”
Cobots, or collaborative robots, are expected to be used increasingly within manufacturing. Recent research has predicted this market will grow from $710 million in 2018 to $12.3 billion by 2025. This is largely due to the technology being safer, more adaptable and compact than ever before. However, such technologies are not yet able to replace humans. “There is a need for human-in-the-loop, but you probably won’t need as many humans,” explains Taylor. “You are already seeing this in the car industry and in other industries where you’ve got highly automated processes.”
Such technologies might not result in a reduction of workers, due to increased demand in other aspects of manufacturing. “You will also need new types of staff to make sense of all the information that is being generated, so you’ll need data scientists and analytical skills and talents, which haven’t been something that has traditionally been needed,” explains Taylor.
A 2018 Deloitte report indicated that, while companies are increasing their expenditure on their operational and IT budgets, they are reducing their research and development budgets. On average, they are spending 30% of their operational/IT budget on digital transformation but only 11% of their research and development budgets on this area.
One cost-effective solution to this issue might be to outsource, rather than recruiting or training in-house. “These individuals are in short supply and that’s where maybe the best solution is – to partner with people and companies who have those skills,” says Taylor.
There are also a number of emerging technologies that are likely to become increasingly implemented, such as digital twins. These are exact virtual replicas of physical products or processes, which can be updated in real time. They could be used to run simulations, and machine-learning technologies could be implemented to predict breakdowns and schedule maintenance.
Virtual, augmented and mixed reality is another valuable tool for the industry. This can be integrated into manufacturing in a number of different ways. For example, this technology can be used to design a new product, which can be refined in the virtual world before developing a prototype to test further. It could also be used to get support from an engineer remotely, who could use mixed reality to be able to see what the problem is in the manufacturing process and quickly rectify it.
Industry 4.0 also brings challenges, of course, including dealing with compatibility issues and ensuring systems are secure. Overcoming these challenges is possible, though, presenting considerable opportunities for manufacturers.
Risky business
Despite the opportunity for these technologies to improve manufacturing processes, they do raise new issues. “With all of these, you get new challenges, like data security, privacy cybersecurity – all of those are, as a result of the innovation on the one hand, raising challenges on the other side,” says Taylor.
A 2015 Deloitte report found that the level of cybersecurity risk could increase strongly (35%) or very strongly (48%) among respondents across a number of industries as a result of industry 4.0. Cyberattacks and viruses could be hugely problematic, bringing networked and smart production systems to a halt, creating substantial costs.
However, such difficulties are not insurmountable, but they do require tailored risk management and security strategies to be put in place. It is also important to note that as technologies continue to develop, this will also bring an improvement in cybersecurity systems. The limiting factor will largely come down to implementation, rather than technological capability. When integrating these systems, it is important that they can prevent and treat cyberattacks effectively.
Although there is increasing discussion about the challenges and opportunities for industry 4.0, implementation is still at an early stage. “There are a number of global surveys, which my colleagues have done, that show that in terms of digital maturity and the adoption of technology, life sciences are lagging behind some of the other industries,” says Taylor. “However, we cannot underestimate the impact that the regulatory environment has. It is an enabler for innovation but at the same time also stymies it because of concerns about meeting the requirements.”
Four paradoxes
In light of the increasing technologies available, as well as the opportunities and challenges they bring, many companies remain in inertia. A Deloitte report, ‘The industry 4.0 paradox’, marks the discrepancy between the enthusiasm for these technologies and their implementation in a survey of 361 executives across 11 countries. While results show a strong will, balancing current operations with the opportunities of industry 4.0 remains difficult, manifesting in four paradoxes.
The first is the strategy paradox. Nearly 94% of respondents identified digital transformation as a top priority but this didn’t correspond with exploration within their organisation. Interestingly, only 68% believed industry 4.0 was an avenue for profitability, which likely is part responsible for this incongruity.
The supply chain paradox was also prevalent. Although this was an area indicated to be fruitful for current and future investment by executives, those outside the C-suite who were more involved with the daily management of the supply chain did not have a voice in decisions about digital transformation investments.
Another paradox was present with regard to talent. Despite respondents asserting confidence that they had sufficient capabilities within their organisation to implement industry 4.0, with only 15% admitting that any changes to skill sets of workers was necessary, they also acknowledged that obtaining, training and retaining the right people was an ongoing challenge.
Innovation was the subject of the fourth paradox identified. Executives reported that their strategies for industry 4.0 largely revolved around improving existing operations, rather than using them in a more transformative way. In light of the huge potential for innovation of manufacturing processes, such opportunities should not be overlooked.
$12.3 billion
The predicted value of the collaborative robots market in 2025, up from $710 million in 2018.
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Make the most of it
In order to close the gap between conceptualisation and implementation, it is clear that action is needed. In the report ‘Forces of change: Industry 4.0’, Deloitte identifies five steps that are needed in order to optimise the use of these technologies.
It is imperative that companies immerse themselves in innovation, exploring the potential of industry to transform manufacturing processes, rather than merely improving them.
Building an ecosystem is key to ensure that these technologies can be successfully integrated. This might involve leveraging existing resources, as well as attaining new ones, either internally or externally.
Although there is a tendency to want to make dramatic and rapid changes, it is better to start with smaller stakes, testing and refining, before scaling up where the consequences are more significant. This can help to gain confidence in the capabilities of these technologies, ultimately leading to greater innovation.
And above all, it is important that companies do not expect perfection from industry 4.0. It is still evolving, and it is important to learn from previous experiences to inform future initiatives and priorities.
Define industry 4.0
Although the term industry 4.0 is widely used, it is rarely defined. Deloitte has described it as involving a move from traditional linear data and communication towards real-time access to data and intelligence. As part of this shift, there is a need for the integration of digital information from many different sources.
Throughout this process, real-time access to data and intelligence is driven by the continuous and cyclical flow of informationn and actions between the physical and digital worlds, known as the physical-to-digital-to-physical loop. This consists of three stages:
1. Physical to digital: information is used from the physical world to create a digital record.
2. Digital to digital: information is shared to create insights using advanced analytics, scenario analysis and artificial intelligence.
3. Digital to physical: algorithms are applied to translate digital-world decisions to effective data, to spur action and change in the physical world.
In order to achieve this, industry 4.0 combines a variety of technologies, including analytics, additive manufacturing, robotics, high-performance computing, natural language processing, artificial intelligence and cognitive technologies, advanced materials and augmented reality.
Source: Deloitte
