The first industrial revolution was based around the mechanisation of factories. The second was focused on mass production. The third was driven by the rise of the internet and the early stages of automation. The latter shook up the existing status quo and saw disruptive companies like Uber and Airbnb steal market share away from traditional businesses in their respective industries.
Now, according to a leading expert on all things supply chain, we’re on the cusp of the fourth industrial revolution, or Industry 4.0 as it has become to be known. But, the question on the lips of many procurement and supply chain chiefs is what it will mean for their professions and the talent they need to hire?
Marco Taisch, director of the executive course in manufacturing management at MIP Politecnico di Milano School of Management, is a leading supply chain academic and a keen proponent of Industry 4.0. He believes that the combination of four technologies – big data, artificial intelligence (AI), cloud computing and the Internet of Things (IoT) – will “drive huge and sweeping changes across the entire field and create a much greater need for professionals with advanced technology skills”. He also believes that “these changes will infiltrate into the industry at a rapid pace" and that any firms not preparing to meet the anticipated demand could "rapidly fall behind the curve and start to lose competitiveness without these skills in place”.
The arrival of Industry 4.0 is already impacting supply chains and the integration of these technologies is likely to create significant savings and improve efficiencies within the market. Logistics firm Knapp, for example, has already developed augmented reality-led picking technology, which allows humans to locate items more quickly and precisely. It also means they have both hands free to build stronger and more efficient pallets, with fragile items better protected. Benefits have already been realised from this, not least that error rates have reduced by 40%, reducing spend on replacement orders.
Rather than seeing jobs lost, it is actually more likely Industry 4.0 will create new roles.
Traditional skills, like process mapping analysis and planning, will still be valued. However, firms will be on the lookout for technology specialists that can help organisations extract the highest possible value from new innovations. But finding and hiring those people won’t be easy.
Anyone with an eye on the news will be aware that there is a shortage of technology specialists in several parts of the world, including in the UK. There are concerns that Brexit will exacerbate this issue even further and – depending on the type of deal reached between the UK and EU - could mean some specialist skills are lost. And if the shortages are biting now, what effect will they have once Industry 4.0 is fully embedded into the supply chain and demand for this technological expertise increases further?
Employers will have to be open to hiring from other fields such as the oil and gas sector, which is stocked with skilled and effective professionals who could likely be lured away. Businesses must also recognise the ever-growing role of technology in their fields and offer more training on areas like AI and big data to their employees. Not only will this help the business meet the demands of Industry 4.0, but it will also help retain talent.
Industry 4.0 will impact the supply chain. It is up to firms to recognise the changing world they now operate in and recruit for the skills they now require to stay ahead in the war for technology talent.
Gary Noble is co-managing director of leading procurement and supply chain consultancy 1st Executive
This contributed article has been written by a guest writer at the invitation of Procurement Leaders. Procurement Leaders received no payment directly connected with the publishing of this content.