And it’s all about the people
The Industry 4.0 (i4.0) revolution promises new levels of value and performance for manufacturers. In fact, i4.0 may be the answer to the sector’s looming talent gap as manufacturing becomes less about grease and gears and more about data and digitization.
Any i4.0 initiative requires new ways of working, new skills and capabilities, new operating models, new processes and new roles and responsibilities, and this task demands buy-in at every level of the organization. However, KPMG research has found that there can be a significant gap between executive support for i4.0 and employee awareness. And that can be a serious problem.
In a recent KPMG study ─ Beyond the hype: Separating ambition from reality in i4.0 ─ we found that the majority of executives tend to enjoy an average to above-average understanding of the significance of i4.0. Employees, on the other hand, appear to have a below-average understanding of i4.0 and awareness of their individual contribution to the success of the organization.
Employee engagement is critical for success with i4.0. In some cases, key processes or methodologies may exist only in an individual employee’s head; best practices will need to be documented, standardized and understood before they can be automated. In other cases, employees may need to be upskilled or retrained in order to fulfill more value-adding tasks; this too, will require engagement and encouragement.
The key is to articulate a clear vision for how i4.0 enables change to deliver performance:
They think carefully about their future capability requirements. In our research, manufacturing leaders are already considering which competencies will be necessary to support their future i4.0 solutions, and they have started embedding these considerations into their strategic roadmap. Some plan to update their talent strategies and partner with outside organizations to diversify their recruitment pool.
They drive their change agenda proactively. Our benchmarking research indicates that some leaders are creating robust change management plans and thinking carefully about the people, governance and cultural impacts of their decisions. They are proactively communicating with employees to raise awareness, engagement and confidence.
They focus on value, not costs. i4.0 is not just an opportunity to reduce costs and headcount. It’s a way to improve value and performance. By freeing up resources through automation, leaders are enjoying growth without adding headcount and, in some cases, shifting their resources to more value-adding tasks.
Developing the right capabilities, controls and culture will be key to driving i4.0 success. Some industry observers suggest that increased automation will reduce the need for change management capabilities. Our research suggests otherwise. In fact, we would argue that success begins with widespread employee engagement.
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Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.