Manufacturing Hot Topics - Industry 4

13 July 2018

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Introducer: You're listening to Manufacturing Ignition Hot Topics, bringing you right up to date on the latest trends and discussions within UK manufacturing. Sponsored by Bonfire Recruitment, helping manufacturing leaders across the UK to attract the best talent for their manufacturing company. Ignite your business or career today by visiting Here's your hosts, Terry Mallin and Scott Buchannan.


Terry Mallin: Scott, now we'll move onto hot topic this week. Which is industry 4.0.  And Scott, you were giving me a wee bit more on insight. I remember last year, industry 4.0, so can you give me an insight again? What exactly that stands for?



Scott: Yeah. Well, it's a new ... It's the way things are going. It's been talked about certainly in the Scottish and the region's community for a long time. I think there's conflicting arguments about how advantageous it can be for giving business, depending on the size and scale ... But the definition, I believe it's industry 4.0 is using innovation and technology to create smart factories. Where IT systems, more it's a physical processes that are able to make decisions without human intervention. Alright? I mean-


Terry Mallin: Yeah.



Scott: The way I look at it, is it's more smart technology and it's relating to the next industrial revolution. Which is centred around intelligent manufacturing and bringing together contemporary automation, data exchange, and [inaudible 00:01:40] manufacturing technologies. I think the question that I ... And I've spoken to a few people about this, shapes and size of organization actually, it seems to be, quote "value" that actually gives in this point in time to them. Do you see?


Terry Mallin: Yeah.


Scott: And further actually, that the technology is what 's the investment that is the return. So it's quite ...


Terry Mallin: Yeah.


Scott: It seems to be quite a hot topic across manufacturing at the moment. That's the topic.


Terry Mallin: Yeah, of course. Of course. People think it's just the robotics, but actually it's not just robotics. It's robotics, 3D printing, virtual reality could possibly come into that. Using that artificial intelligence. What if that's ... If this is actually if machines were from the factory being able to communicate with each other. This was our problem, the old communicating, it could stop the line. That could then get reported to the engineering team, they can then resolve the problem and then it carries on. So it's all very ... communication flow there[inaudible 00:02:34]. And that can bring up its challenges, which will both [inaudible 00:02:37] is ... ones that the hot topic.


Scott: Mm-hmm (affirmative).


Terry Mallin: But I'm sure, most people are aware of industry 4.0. That's been a buzz word around manufacturing for professionals. If you don't know about it, where have you been? And what I'd rather us do, rather than us going over the same old discussions, we thought it would be wise to discuss what is the reality of the transition ... to smart factories. And what are people doing? Rather than talking about this currently.



Scott: Yeah. [inaudible 00:03:07].


Terry Mallin: Yeah.


Scott: Does that sound okay?


Terry Mallin: Yeah.


Scott: No, it's interesting. I've got a recent stat itself, which was 38% of manufacturing businesses are actually looking for obtainitive materials, which is nanotechnology.  And that actually at least half of these companies believe that these changes will become widely adopted in the future. To go that way. So it's the innovation piece again. Isn't it?


Terry Mallin: Yeah.


Scott: It's about making sure that, I think, old factories are keen to make efficiencies. And it's adopting ... the embracing, the adopting end technology. Another end, money to be made I guess.


Terry Mallin: Yeah.


Scott: Making that factory more competitive.


Terry Mallin: Okay. And it's more productive. But just to give you a bit of background before we dive into this, it is capsulated very well by an article by Mike Rigby, who's a head of manufacturing for batteries.


Scott: Right.


Terry Mallin: 2016 was the year when transformation among UK manufacturing companies really picked up. The digital economy dominated the world in terms of destructive and transformative, that became typical board room jargon. Moving into January this year, 2017, it's been described as a year of opportunity for manufacturers. Now that we are nearly ended 2017, how's that transpired? Where are we? What's that process of? I've done a bit of digging, Scott.


Scott: Right.


Terry Mallin: Just to see where we're are. So far in 2017, as we touched on the latest news, the PMI is on an upward trend. And that can only be positive for manufacturing. On the back of ... Our other books are ever .. What I've seen, a high level. Which was last seen in 1980s. SME manufacturing companies, they grew at the fastest pace since 2010. I think that was driven by ... export, all their books reaching a 20 year high off the [inaudible 00:04:55]. So it's all very, very positive for manufacturing so far in 2017. Some people might say that's maybe a direct influence due to people becoming more productive. Or embracing innovation, which could be related to industry 4.0. My personal opinion,  what happen to companies in 2017, I'm not seeing still enough companies making capital investments. And especially, I tell you when innovation is so widely available and so promoted, I do understand that there is a hesitation for investment now. [inaudible 00:05:31] What's going on with Brexit and ... external influences. But sitting right here in the 1st of November 2017, with the positive trends, maybe that is a time to start thinking about investing. As I say, Scott, they're always saying the early bob cat catches [inaudible 00:05:50].


Scott: Yeah. I was recently up in Edinburgh and I think one of the key points of that, and the debate with some of the individuals present, was along the lines of ... You have the big boys there, whether it's Siemens or [inaudible 00:06:08] ... A massive organization trying to add value to the traditionally ran, and in our case a Scottish company, you've had good processes in place, I've got a good product, and actually being to almost educate that business in terms of, "Right, do you know what? If you embrace this piece of technology, this will actually allow you to evolve what it is. And actually, when looked around, will increase output." I think one of the fearful factors of many manufacturing companies is actually the impact on ... Yes, [inaudible 00:06:44]. But also, that the perception in the market of staffing levels. I think that there seems to be an incorrect perception, in my view. That robots are going to take over [inaudible 00:06:57] and as a result, actually going to get rid of jobs. It's actually, in reality, going to do the opposite. There needs to be upscaling of course. But the roels that would actually be coming along ... Who's going to actually manage these robots? Who's going to actually develop the processes? Actually, from ... if you're doing whatever role in an organization, you're probably find that the salary is going to be there as well. So it's kind of a win-win.


Terry Mallin: Yeah.


Scott: You've got an employee who's making more money and getting more interested in the role. Arguably, depending on what they're doing. Then you've got the business that's going to be happening because it's getting more automated, more reliable and quality efficient process. That there's hopes that it wil be more efficient and competitive in the market places.


Terry Mallin: 100%. And I think that the companies that are embracing this now and making the investment, they are going to be getting the best people possible to manage these systems and robots. Because it's clearly when that starts to snowball, there's clearly going to be a talent show of people out there that can ... I think the ones that are forward thinking, really, are actually the ones. And actually embracing this, training the guys up, getting people working with data, is only going to be a benefit.


Scott: Sorry for cutting ... One of the things that come out and something to be honest, I haven't really thought about, but if you go back to the links of the evolution that's happened ... It's not like me to go on about shopping, but if you think of [inaudible 00:08:27] and the big companies that have invested and got processes and think of their automated process that happens. That allows you to get your tier items, [inaudible 00:08:40]. It's incredible. Actually, the supply chain element. Embracing ... not necessarily ... You might be making a product, but actually how do you get your material and how do you get your product to market? Do you know that, Wade?


Terry Mallin: Yeah.


Scott: It wasn't always opportunities. And actually, that can get into national threat as well. If you're supplying out to ... If you're not doing it, your competitor will be doing it. And we're in this global marketplace where, do you know what? if you're not going to do it, then someone else will and you'll toil. So these are the things that from a supply chain ... and messing with the cloud-based ... capability now that this has is incredible. And to be honest, quite impressive.


Terry Mallin: I agree.


Scott: [inaudible 00:09:20]. I think [inaudible 00:09:24] and you saw the quality department of a ... mechanically-focused organization, [inaudible 00:09:30] what was it, 40 people looking at end parts for the business?


Terry Mallin: Yeah.


Scott: And their job was actually individually keeping an eye open for cracks in metal, and actually antiquated, slow, and cost-ineffective processes that was happening there. And as we all know, by actually investing in a piece of plant, that can evolve that. I think there's ... a quality impact of embracing industry 4.0. Everyone wins? Do you know that way?


Terry Mallin: Yeah.


Scott: The product is of higher quality, invest in quality. And actually more controlled and there's probably less to hunt. Less lying about the factory floor and so on as well. That's just my [crosstalk 00:10:15]


Terry Mallin: 100%.


Scott: What do you think?


Terry Mallin: No, no. It's good, Scott. That was good, that was interesting. We're kind of touching on robotics and on ... the investment in automation for example, there was a report. New data came out from ... IFR, which is the International Federation of Robots. They put out a report which shows the world's largest markets for industrial robots and who's buying that. Okay?


Scott: [crosstalk 00:10:40].


Terry Mallin: [inaudible 00:10:41]. They've took five markets are China, South Korea, Japan, U.S.A., and Germany. Those five markets combined make up 74% of the total sales worldwide for industrial robots. Which I found quite astounding. I was wondering, where is the UK in that? I know we're a smaller country, but I do know that in 2016 sales figures did increase for the first time in the UK on industrial robots, since 2012. So that is positive. But I think we could really be doing a lot more.


Scott: I think that the challenge is related to actually what industry, and what the product is, and actually how modern or in the scale of it, that the business. So you've got ... I don't know, blokes in Corkley are meeting a product, I put it that way forever. But why would they change? Do you know that way? So at least have an argument there. Likewise, you're working with your manufacturing businesses that ... speed and time is of the essence. You know that way. So how ... These companies may well embrace and have the money also ... to change things quickly.


Scott: I think the UK, if you look at actually the businesses, with the exception of the likes of ... I don't know, say automotive manufacturing, and maybe the supply chain thereof. Maybe a wee bit of the aerospace. But your actually looking at organizations that ... whether that, that will have ... that wouldn't set process. Do you know that way? It's actually trying for them to get a head around where the opportunity lies for them.


Terry Mallin: Yeah.


Scott: But I know that if you look at ... Guess what economy's been flying recently? Automotive.


Terry Mallin: Yeah.


Scott: And aerospace recently as well. And guess what? It's highly automated and cost-effective.


Terry Mallin: Yeah. Good. About ... Scott, I'm being devil's advocate ... It's all-


Scott: It's the automation.


Terry Mallin: Poised and all that good stuff. But it's not ... End of the day, we're seeing in the news quite often where cyber attacks, where cyber criminals are holding businesses, websites to ransom.


Scott: Yeah.


Terry Mallin: Looking for money out their [bank 00:12:48]. And I can see a big opportunity for these type of individuals, that would see that's [inaudible 00:12:54] and actually doing that sort of stuff. So we need to protect ourselves from that and maybe we all need to be start thinking about that before.


Scott: It's relevant and I think ... I know certainly, Siemens was certainly on of the organization and I'm assuming that the others will be there as well. But they actually can do ... There's two things happening. There's one ... And listen to this one. The virtual engineering piece is actually a sharing of technology. There's actually ... the impetus of sharing within the cloud. And there's also companies that would also have their own private ... They weren't perfectly private in [inaudible 00:13:30]. With all that, their ties. There's certainly ... I haven't heard any stories of ... technology being pinched. If that makes sense. As in, we've heard of the IT-related ... [inaudible 00:13:45] that we're all aware of. But actually, I haven't yet heard ... Maybe it's in the court now. I don't know.


Terry Mallin: Yeah.


Scott: But a factory closing down because someone's jumped into that. I think it is very well protected by ... And companies can get a lot of money to [inaudible 00:13:58]. To make sure that that data's safe and secure.


Terry Mallin: Well, exactly. And I think that's a big thing. I know it as well, a lot of manufacturing companies have their own intellectual property. And there's a risk, obviously, about confidential information being exposed when systems are involved as well. So that has to be taken into account as well. Yeah. I think, see in reflection, Scott, with me summarize everything up? Manufacturing's at a crucial tumbling point right now. The market is very positive. It's better than it's ever been in the past few years. There's more certainty. Some extent around. Innovation and technology is far more accesible than it ever has been. And I think, as a UK manufacturing business owner or leader, the question probably is, "Are you in a position to take a risk? To be a market leader and pioneers within smart technology in creating a smart factory?" We like putting our stamp upon the industry.


Scott: You said what risk [inaudible 00:14:59]. I would actually argue that risk-factor, I think that if investment isn't there, unless they have a very unique product that no one else is going to be doing, the risk-factor is if they don't invest ... Do you know that way? I think it's actually going to be the other way around. If you don't move with the times, because ... As I've said before, manufacturing is the beating heart of the entire UK. Companies that are lagging behind ... It's about the future. And technology is there to be used and to be ... to help companies mitigate that risk of the future.


Terry Mallin: Yeah.


Scott: Certainly seem that's what we're seeing with some of our clients, isn't it?


Terry Mallin: 100%. And that's your two pence worth on our insight. I think what we're going to move on next is in the recruitment manner. I think this ties in really well, because we're going to be talking about professional recruitment process's been outdated. And then the [inaudible 00:15:55] we're going to go for the next couple of weeks is how yo embrace technology and data to solve that problem. I think that was pretty well covered, Scott. With industry 4.0.


Scott: Certainly, here. It's an overview isn't ...


Terry Mallin: Yeah.


Scott: I think what all that we are, technology's there. I think the professionals around this space need to ... hopefully the business leaders will ... Certainly, open to the idea. Certainly all the people be [inaudible 00:16:22]. They can't get enough information in this. So thank you, thank you.


Introducer: Thanks for listening to the Manufacturing Ignition Podcast. If you've made it this far, we take it that you enjoyed the show. In return, we'd love it if you would leave us a rating and a review on iTunes. Subscribe while you're there and we'll catch you for the next episode.


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