Britain was the birth place of the Industrial Revolution, now that we are entering the fourth industrial revolution (utilising the power of computing in manufacturing), is a lack of UK investment leaving us behind?
Industry 4.0 (I4) is the current manufacturing trend for creating “smart factories” utilising cyber-physical systems, the Internet of things, cloud computing and cognitive computing, allowing manufacturers to be more efficient, flexible and generate cost savings. It is the future of factories, and it could be a large boost to the UK’s manufacturing productivity.
Industry 4.0 is commonly referred to as the Fourth Industrial Revolution.
Since the financial crash in 2008, growth has stagnated in the UK manufacturing industry. I4 is a global phenomenon, however 75% of UK manufacturers would say that the UK is being left behind.
The EEF, the UK voice for manufacturing and engineering, released an eye opening fact sheet (read here). I4 transformation is broken down into three phase, Conception, Evolution and Revolution. Their survey of UK manufacturers revealed that 27% of firms are in the Conception stage, 39% are undergoing Evolution and a mere 4% have seen the Revolution. This leaves a staggering 30% of firms in the “Pre-conception” Stage, in other words, doing nothing to adopt the technologies that will revolutionise their business.
Companies that are deferring vital investment will be at a disadvantage if they continue to ignore these technological advances, and less competitive with both UK and foreign competitors. Of course, investment in innovation requires considerable capital expenditure, which may be influencing the postponement of these essential business decisions for investment. At GSM finance, we are seeing more manufacturers turn to alternative finance solutions such as asset finance or hire purchase. This allows firms that either do not have the large capital required or prefer to keep their capital for staff costs and cash flow to obtain the technology they require to remain at the forefront of manufacturing.
On average a revolutionised firm could see a 30% improvement across the board.
Expected benefits of a revolutionised I4 firm are astonishing, labour efficiency could be improved by 35%, machine utilisation could increase by 34% as well as production flexibility up by 32%, there is a 28% improvement in the use of resources and a 27% decreased time to market. All of these benefits will make UK manufacturers much leaner outfits allowing them to remain competitive with foreign manufacturers.