Managing Change in Fourth Industrial Revolution: Perspective from Manufacturing Industry
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Managing Change in Fourth Industrial Revolution: Perspective from Manufacturing Industry
Colin Koh Kok Lin, Management Consultant, Singapore
Two basic rules of life are:
1. "Change is inevitable".
2. "Everybody resists change".
- W. Edwards Deming
It’s been said that successful adoption of Industry 4.0 technologies and methods is really an elaborate case of change management. Change management provides an excellent way to acknowledge the long-term value of smart manufacturing, and its gritty real-life challenges.
In plain terms, change management involves the use of every tool available—usually, technology, funding, and the power of human persuasion—to achieve desired business results. You can mention redirecting resources, changing business processes, or rerouting budget allocations. However, ultimately, you want to use resources to move your organisation from a beginning to a final state.
Change Management in Industry 4.0
Managing change in smart manufacturing environment involves surviving global shifts in manufacturing, logistics, and related services, which occur at an increasing pace. Globalisation and constant technological innovation create a roiling atmosphere in a constantly evolving business environment.
With local and global business environments undergoing so much change, organisations can learn to become comfortable with change itself. Yet, every business owner or leader knows that organisational change at any pace is challenging. The structure, culture, and routines of organisations often create a persistent and difficult-to-remove imprint of familiar practices, processes, and decisions. It’s all too easy to enter denial mode and hope that the rush of change will pass quickly.
Denial is a dangerous course of action. When disruptive change occurs, organisations that adapt most quickly build a hard-to-beat, competitive edge. Companies that refuse to change lose the chance to create efficiency-based value. Worse, they don’t seek or find potential opportunities that can help to build revenue, loyal customers, and a stronger brand.
What Changes are we trying to Manage?
Conventional definitions of Industry 4.0 change management focus on improving efficiency and building long-term value by changing manufacturing technology and methods. Everything is couched in terms of choosing, adopting, and orchestrating technology to generate value. The goal is to search for, pursue, and benefit from new value growth opportunities enabled by converging manufacturing technology.
Ultimately, the change that’s managed in Industry 4.0 environments is human behaviour. Human collaboration, habits, and mind-sets take the form of actions made at the levels of national policy, business strategies, manufacturing processes, and individual decisions.
At the national level, smart manufacturing changes involve political action taken to define relevant policies, create government programs, and support Industry 4.0-related educational goals and achievements.
Business-level changes reflect group decisions made by company business and technical leaders. Process-level changes involve the design and operation of manufacturing products, processes, and services within smart factories, warehouses, and offices.
Finally, behavioural change at the individual level includes making educational and training choices, developing a modern work mind-set, and accepting work styles, such as collaboration and life-long learning.
Accelerators & Obstacles
Identifying accelerators of smart manufacturing adoption and obstacles to it is a useful way to analyse patterns of needed change. These indicators make it easier to identify and (potentially) change what can be improved in smart manufacturing operations.
Government documents, print and digital news outlets and countless online business commentators throughout ASEAN list and describe obstacles to Industry 4.0 adoption. These are the challenges that manufacturers face when they engage with smart manufacturing technology and ideas.
Smart manufacturing accelerators acknowledge a problem and often offer improvements or enable change. Accelerators can be a grant funding program for SMEs, an international partnership of educators and businesses, or a vocational training program that sends trainers to factories. These resources and relationships enable adopters to build value more quickly and with fewer resources than traditional manufacturing technology and methods require.
As you might expect, obstacles and accelerators number in the hundreds. When you group them in terms of our four levels, interesting and useful patterns emerge.
Industry 4.0 Change Management in ASEAN
Compiling an accurate, up-to-date account of Industry 4.0-related challenges and enablers is a good way to identify changes that business owners must make to benefit from smart manufacturing technologies and practices.
Taken from ASEAN-6 news outlets and government documents, this information acknowledges the need for specific types of change in different Industry 4.0 environments. To look for useful patterns, we grouped changes at the four levels described earlier. This is what we found.
We’re starting with changes at the highest level, that of government policy and decision making. These are the most familiar accelerators and obstacles, which are often mentioned in the news and speeches made by national politicians.
Government policy — What can ASEAN’s national policy-makers do to promote or speed up Industry 4.0 adoption and value building among manufacturers? They develop and support programs and initiatives, lots of them. These initiatives are designed to strengthen awareness and acceptance of smart manufacturing value and ideas. They use each nation’s policy apparatus to lower barriers to entry of modern manufacturing and align workforce resources with employer requirements.
Readiness assessments — Governments such as Vietnam, Singapore, and Thailand are creating national road maps to adopting smart manufacturing technologies. Singapore’s government developed and promoted the Singapore Smart Industry Readiness Index, a first-of-its-kind self-assessment tool. Designed for use by Singapore’s manufactures, the tool’s usefulness is extended by newly developed software, the Smart Industry Readiness Prioritisation Matrix
Regulatory, business, and trade policy — Many Industry 4.0 programs throughout ASEAN try to reduce the effort and cost of producing and selling manufactured goods within and beyond ASEAN. These initiatives include measures such as defining new tax rules and trade regulations to promote the immediate start of digital transformation. Other measures address manufacturing-related tax reform streamlined regulatory policy and changing trade policies that hurt advanced manufacturing firms.
Funding — Programs and initiatives that provide inducements for manufacturers to adopt Industry 4.0 principles are a big part of promoting smart manufacturing. ASEAN governments have heard the call of the region’s manufacturers for access to more grants and information that can accelerate digital transformation. They have built and promoted special programs such as the Business Grant and SME portal programs run by the Republic of Singapore.
Funding and promoting national education and training programs also play large roles in national Industry 4.0 policy. These funds include everything from forming partnerships with German manufacturers with apprenticeship programs to three-hour workshops for manufacturing employees who want to upgrade their skills.
Partnerships — News about ASEAN national governments, their educational institutions, and manufacturers communicating and working together takes up a lot of space in print and online publications. Partnerships of all kinds are popping up within individual countries and throughout the region. New partnerships between educational institutions and ASEAN manufacturers, industry-university groups that collaborate in advanced manufacturing research, and groups that identify obstacles to digital transformation are in the news.
In these groups, leaders from the public and private sectors work together to identify specific barriers to smart manufacturing and the opportunities that Industry 4.0 ideas enable. ASEAN-wide exchange and cooperation are promoted by pilot and demonstration projects sponsored by regional programs and partnerships.
Education and training — In ASEAN countries generally, there aren’t enough properly trained operators, technicians, and technical professionals to fill the jobs that manufacturers need onsite today. In countries such as Singapore, an ageing, shrinking workforce makes the job vacancy problem even worse. As a result, government-level efforts to promote better job-worker alignment are in progress.
Nationwide, skills development projects — These programs, such as Singapore’s SkillsFuture initiative, are lifelong skills development programs. Guided by the republic’s Future Economy Council, this initiative brings together talent from government ministries, corporations, academic institutions, and labour groups. Their goal is to design curricula that can fill current job openings and help workers at all levels keep their knowledge and skills up to date.
Training programs that teach skills those local manufacturers need. Getting the right manufacturing skills and training to workers in manufacturing hubs is a serious challenge to ASEAN educators. That’s why education and training institutions are starting to change vocational education to
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