January 21, 2016
The World Economic Forum has begun the usher in the fourth industrial revolution, as the Huffington Post would have it. One of the first thoughts that came to our mind (call it professional deformation) was ‘what news could possibly come of this’? So we decided to run a little LEWIS-blog-experiment: We went, checked – and, with the support of some of our clients, put together a list of open questions that are still worth asking.
This week some 2,500 business, political and media leaders attending the annual event in Davos, Switzerland will talk about the internet of things, the digitalization of manufacturing industries and businesses, and how it’s going to change everything.
Again. Haven’t we heard everything that could be said about the internet of things and the digitalization of manufacturing already?
Don’t get us wrong: we understand the importance of the fourth-industrial-revolution story. We’ve learned about many of the opportunities and risks it might bring to all of us. And we like those. After all, they have made – and still make – for some truly interesting, high-profile stories for many of our clients.
But that, then, somehow is the point, isn’t it? At least from a mere news or PR viewpoint.
It just seems as if everybody has been reading, talking, writing, tweeting – and let’s not forget about: surveying – about the fourth industrial revolution for years. Don’t take our word for it, by the way: read the now somewhat famous byline from McKinsey’s W. B. Brian Arthur on The second economy for reference. It’s from 2011!
Which is why we thought that there’s just nothing new left that the world leaders at Davos Klosters could or should talk about – at least at first. But then we checked.
We reached out to some of our tech, industry and consulting clients and asked them, what new questions they would ask in or at the panels, workshops and receptions in Davos. Below is the list of the replies we’ve received, in no particular order. It certainly convinced us that the digitalization discussion is far from over. Maybe it does the same for you? See for yourself:
“Given the scale of the opportunity that the Industrial Internet presents, Europe will be well placed to maximize gains by realigning investment to incorporate cutting edge technologies into its capital stock, thus building and developing the necessary talent bank and creating a framework that facilitates the secure and easy flow of data across borders.
“No one country will succeed alone. Acting together to complete the Single Market will have three related advantages. Firstly, it will ensure harmonization of the relevant institutional and legal systems. Secondly, this will maximize the economies of scale that have been at the very core of European economic and financial integration. Thirdly, it will help reduce macroeconomic imbalances across European countries – imbalances that have been a significant factor in the recent economic crisis.
“No one country will succeed alone”
Policy makers need to move beyond their respective geographies and thinking when planning Europe’s Industrial Internet strategy. Instead, they should focus on the interdependence of countries and industries. Key question is, will Europe and its Member States fully capitalize on this opportunity and create the conditions needed to reap the benefits of the industrial Internet.“
Frank Welge, partner with INVERTO, a procurement and supply-chain-management consultancy, has been researching how German manufacturers are digitizing their own businesses. He wanted to learn how large, mid-sized and smaller firms get their supply chain management ready for the digital future – but he found something rather more interesting, as he puts it.
“There’s already a huge gap between the ‘digital maturity’ of large corporations and that of mid-sized and small businesses.”
“Our survey revealed that there’s already a huge gap between the ‘digital maturity’ of large corporations and that of mid-sized and small businesses. That’s because the big players in key industries innovate and digitize at a rate that smaller firms just can’t keep up with. And that’s a real challenge: If we can’t bridge this gap, our economies might become divided – with only few highly-digitized, highly networked corporations reaping all the rewards of the ‘Industry 4.0’, and the rest of the businesses left behind.”
As an IT industry veteran, Dinko Eror, Managing Director Germany for EMC, knows all about IT’s key challenge:
“It all comes down to: How are we going keep up with the ever-increasing demand for data? The internet is already at the verge of buckling under its own weight. The amount of information that needs to be stored, transmitted and computed grows exponentially – but there’s only limited industrial space and electricity for data centers. And we haven’t even begun to build and use the ‘Internet of Things’ that we are going to need if we want to digitize our manufacturing industries.
“The internet is already at the verge of buckling under its own weight.”
If we want to make this a reality, we’ll have to re-work almost all the IT-infrastructure we’re using today in order to make it more efficient, more scalable and more sustainable.”
“If there is one single question that matters more than ever in the digital manufacturing age, it is ‘where?’. Digitalization
allows manufacturers to (finally) align customer centricity with operational excellence. The relatively high labor costs of near or re-shoring operations are increasingly overridden through the usage of automation.
“Digitalization helps manufacturers to build a business case to re-shore their production.”
Producing in proximity to consumption allows shortened distribution and supply lines, which is exactly what consumers are currently demanding. Digitalization helps manufacturers to build a business case to re-shore their production. The question is how soon they can become efficient enough to relocate production and take advantage of the proximity to the end-consumer.”
Rahul Garg, Senior Global Director, Machinery Industry, of Siemens PLM Software:
“Industry 4.0 is a great opportunity to engage with customers in new different ways and develop potential new business models. It allows end customers to tell their manufactures directly and exactly what they want and when. Manufacturers need to respond with significant reduction in their time to market, with massively improved flexibility to enable individualized mass production. Needless to say that this is a highly complex infrastructure, that involves the way producers collaborate with suppliers, product designers, production planning, engineering, execution and services – the entire Product Lifecycle Management.
“Industry 4.0 allows customers to tell their manufactures directly and exactly what they want and when.”
That’s why manufacturing – the realization phase of innovation – is vital in this new era. Manufacturers must weave a digital thread through ideation, realization and utilization. Digitalization makes the digital thread of knowledge a proactive agent in driving your business. With a fully optimized ‘Digital Enterprise,’ you are better equipped to initiate or respond to disruptive innovation.
In order to activate digitalization, software can help to engage users who receive the right information at the right time, intelligent models that evolve throughout the process with the information necessary to optimize themselves for how they need to be built and how they should perform, realized products that achieve business goals through the integration of virtual product definition and real production execution and an adaptive system that helps you efficiently deploy solutions today, while maintaining future flexibility.”
That’s our short list of questions to ask at Davos.
We’d love to hear from you if you found it interesting (or not interesting), if you have something to ask or if you have a question on one or more of the questions – just leave a comment here in the blog or shoot us a tweet at @teamlewisglobal or @fmheinrichs.
We’d also like to thank the LEWIS’ clients spokespersons quoted here: They’ve probably never done a blog post like this one before (just like us), and they still went for it and put their idea out here. We’re truly grateful for your support!