Industry 4.0 and the future of manufacturing

Manufacturers have some work to do.
PHOTO: THINKSTOCK

Manufacturers around the world are engaging with Industry 4.0 to improve performance and accelerate growth, yet Canadian companies have been less adventurous when it comes to advanced manufacturing.

A survey of company owners and senior executives by PLANT Magazine and sponsor BDO Canada LLP looked at their involvement with technologies such as digital, automation, the cloud and artificial intelligence (www.plant.ca/2020-advanced-manufacturing-report). The survey results and the subsequent roundtable discussion featuring companies, suppliers and other experts were illuminating.

Canadian companies have a bit of a rep for coming up short on investment in their businesses and being late to the party – as in more risk averse than their US counterparts – when new technologies are introduced, preferring to follow rather than lead in adoption.

Turns out there are some good reasons for their laggardly behaviour.

It’s not that they are skeptical of the value. Almost 90% of the 251 owners and executives recognize emerging technologies allow companies to compete globally. Most of these companies are small, more than half with fewer than 50 employees and and more than half taking in less than $10 million a year.

Almost two thirds acknowledge smaller operations have the most to gain from Industry 4.0. But they’re not big users. For example, just 24% are plugged into the Industrial Internet of Things (IIoT), so everyone else is missing out on the value that – among other things – would come from gathering and analyzing machine data and other digital information.

What’s the hold up?

They’re wary of the costs, where the financing needed to replace machinery and other equipment will come from, and the ROI. How will legacy technology be integrated? They cite the shortage of people with necessary skills. What data should they collect, how do they use it and how about increased cybersecurity risks?

These are significant concerns for small manufacturers. But there are some barriers the federal government can help clear, according to Canadian Manufacturers & Exporters (CME), which has done its own analysis of the issue.

It recommends the federal government improve the accessibility of information about new technologies and testing opportunities by funding case studies, technology demonstration hubs and site visits.

CME also wants to see high purchase costs and investment risks of new technologies offset by a federal-provincial 20% tax credit on the purchase of new machinery, equipment and technologies. And it recommends following the successful example of the SMART program in Ontario to implement strategies that offset the cost of technology assessment and diagnostic services.

To address the skills issue, the government is called upon to encourage more Canadians to choose a career in manufacturing; fund the development of workforce planning consortia across the country; expand the Atlantic Immigration Pilot nationally; and make Canada Job Grant funding permanent, while allowing for multi-year training.

Manufacturers also have some work to do.

As the BDO Canada-PLANT report notes: SMEs may have good reasons for holding off on significant technology implementations, but they will be facing competitors that have made or are making those investments.

Advanced manufacturing technologies will drive factories of the future. Companies that aren’t preparing for the future will soon discover they’re travelling on a short road.

This article appeared in the January-February 2020 print edition of PLANT Magazine.