4 Leaders from 4 Expertise Discuss Industry 4.0
Supply challenges, war, inflation… the list of today’s challenges continues to evolve. As companies hustle to react and adapt, one of the greatest advantages is being anticipatory. This could be in strategy, in leadership, in ethics, in organizational structure. Through building business with an anticipatory mindset, companies can prepare and predict rather than adapt and react. Furthermore, the companies that anticipate change can lead their industry through emerging challenges. They create the new standard and define the path forward.
Being anticipatory doesn’t require a crystal ball, or a palm reader, or a psychic. It does require data, reason, and a little bit of instinct (you might call this experience). And experience matters, now more than ever. At the Industrial Supply Conference held in April of 2022, Daniel Burrus spoke to leaders of the Distribution and Manufacturing industries about differentiating between soft trends and hard trends. While the first are little more than the most recent excitement, the later represent patterns of momentum that provide hints to the future. Like detectives, Burrus and his team of researchers have analyzed and studied the indicators behind these trends to understand which are soon to burn out and which are fundamental to the future. These indicators are demographics, technology, and governance.
Political, cultural, and moral ideals aside this is what the data is saying. Technology and the exponential rise of integrated business intelligence is fueling the 4th Industrial Revolution. Although not yet widely accepted, as with the prior 3 industrial revolutions, the advantages these technologies provide will soon be fully realized by all industries which will dramatically transform the competitive landscape. Those companies that are anticipatory will emerge the disruptors and leaders of the future and, as Burrus pointed out, enjoy the perks of early bird pricing packages and pilot deals. Companies that resist or fail to invest in digital transformation will be left behind with those who tried to hold onto the horse and buggy as the automobile rose to power.
Timing is just as critical as direction when it comes to strategy and digital transformation. This is where the insights provided by economist Alan Beaulieu with ITR Economics are especially helpful. His research team suggests that the time to invest in corporate infrastructure is now. He suggests the best way to prepare for the future is building an adaptable, scalable, and digital foundation. Business leaders should be reviewing their infrastructure in preparation for the accelerated growth of technology and the unknown challenges of tomorrow. Just like covid-19, supply chain constrains, and many other disruptions within the past few years, not all threats are predictable, but the right preparation can better poise organizations to handle unprecedented times. This means investing in forward focused infrastructure that supports continuous growth and helps leaders rise to the challenge during times of hardship.
But this holistic preparation can be difficult to manage. During ISA’s Sales & Marketing Summit, Tim Yates, CEO of DataXstream, provided actionable insights on how to ‘eat the elephant’ of digital transformation. In agreement with Daniel and Alan, Tim emphasized the digital core as the fundamental requirement. “This is the core that runs your business. And whether you’re running SAP or Oracle or some other tier 1, having a strong foundation and digital core is going to drive your ability to implement a unified commerce strategy. If you don’t have a solid foundation, you’re going to be fighting all the upstream processes necessary for digital transformation.”
This raises the question of how to select a digital core, or ERP. Companies that are not already running a tier 1 ERP already have an uphill battle to fight. Especially those with complicated sales transactions or complex inventory management, it is essential the ERP can scale with the challenges a company will face in the future. If the ERP can’t grow with the company, an investment in a tier 2 or undeveloped ERP ecosystem is undeniably an ‘ad iterim’ solution requiring more time, attention, and resource. “All the tier 1 ERPs are very capable of meeting most companies needs […] but it’s more important to get started on your digital transformation journey rather over analyze the tier 1s. So, look for who has the best partners because the partners are what will make or break your project.” Partner solutions are those that provide additional applications and functionality. If the EPR is the operating system, the partner ecosystem is the app store where developers and engineers can create new functionality, customized solutions, and innovative ideas with latest and greatest technology. Partners can develop, innovate, and pivot according to new technologies much faster than the large EPR organizations or individual companies. The strong digital core of the ERP provides the foundation allowing partners to run lean and agile. With this agility and strong foundation, partners can run hard and fast at the newest technology unlocking its unrealized potential in business.
Like most new technology, digital transformation raises concerns about job security and the future of work. It is important to recognize that all technology is designed to be an enabler to human efforts, not a replacement. Leaders who are concerned about the future of their workforce must recognize the limitations to technology in balance with its advantages. The book Intelligent Automation explains, “Another limitation typically concerns work tasks that include several steps, are infrequent, and have a high number of variations or exceptions […] automating knowledge work is probably one of the most complex use cases in the world!” (Bornet et al., 2021) People far surpass even the most advanced AI on tasks such as critical thinking, contextual understanding, and creativity. “In terms of general intelligence, [machines are] not even close to a rat” from Facebook’s AI leader Yann LeCun. Although digital transformation and innovative technologies disrupt, they create much more opportunity than threat. Future workforce advisor, Heather McGowen discussed in her presentation at ISA the importance of learning as a corporate culture. “To thrive in a future that is unfolding faster than we can imagine it, we must become adept at learning continuously. That’s why we believe the Future of Work Is Learning.”
Her compelling collection of statistics:
- An algorithm executed 1,000 stock trades in a single second
- Visa’s credit card network processed over three million transactions
- 56,000 Google searches are returning tens of billions of results links
- More than 2.5 million emails are being sent, not all of them by human beings
show how quickly entire business processes are transforming and the need for a holistic approach to healthy adaptation to manage such dramatic growth. While the emerging workforce needs to adopt the mindset of a lifelong learner, industry leaders can empower and challenge this workforce through enabling technologies. Tools such as artificial intelligence and robotic process automation should not be used to replace the future workforce but empower them. Empowering employees to focus on higher level tasks by automating time intensive manual labor, managers and leaders can use these tools to invest in their people creating a culture of innovation, professional development, and learning. Those that fail to adopt or misuse technology will find it difficult to evolve as employee’s collective industry intelligence leaves the organization, retires, or falls behind the curve.
Research teams and futurists continue to discuss the significance of big data and recent advancements in AI, machine learning, and smart technology in the context of a 4th industrial revolution. This new shift in manufacturing is defined by the synchronized cooperation of virtual and physical systems to create an intelligent digital business. With such technology becoming more available and more advanced, those who prepare for the inevitable disruptions will be poised to pursue the opportunity to reinvigorate their organization, their workforce, and their customer experience. Those who fail to prepare must react which implies less planning, more risk, more stress, and less strategy ultimately putting the organization, its members, and its clientele in jeopardy.
“An ounce of prevention is worth a pound of cure.”
– Benjamin Franklin