Technologies enhance skills
Technologies are efficient
Technologies increase employee control
Technology is often heralded as the key to future success for private companies and public sector organisations alike. Nowhere is this more evident than in the current euphoria for ‘Industry 4.0’ or ‘The Fourth Industrial Revolution’ which promised to transform productivity, remove waste and eliminate repetitive work through the rational organisation of production and service delivery. Estimates vary but it is likely that around one fifth of existing jobs, mainly in low- or medium-skilled occupations in both manufacturing and administration, could be automated using existing or emerging technologies.
The promise of digital technologies
- The application of information and communication technology (ICT) to digitise information and integrate systems at all stages of product creation and use (including logistics and supply), both inside companies and across company boundaries.
- Cyber-physical systems that use ICTs to monitor and control physical processes and systems.
- Network communications including wireless and internet technologies that link machines, work products, systems and people.
- Simulation, modelling and virtualisation in the design of products and the establishment of manufacturing processes.
- Collection of vast quantities of data, and their analysis and exploitation, either immediately on the factory floor, or through big data analysis and cloud computing.
- Greater ICT-based support for human workers, including robots, augmented reality and intelligent tools.
European Parliamentary Research Service
Transmission of data through the manufacturing chain, automation of production and the use of configurable robots lead to greatly enhanced flexibility and mass customisation since a variety of different products can be produced in small batches in the same facility. Such flexibility also encourages innovation, since prototypes or new products can be produced quickly without complicated retooling or setting up new production lines. Digital designs and virtual modelling of manufacturing process can reduce the time between product conception and delivery.
Customers will be able to be more involved in the design process. Production can also be located close to the customer because, if manufacturing is largely automated, it does not need to be ‘off-shored’ or located in low labour cost countries, and ‘re-shoring’ is already occurring in parts of Europe.
Integrating product development with digital and physical production has also been associated with large improvements in product quality and significantly reduced error rates since data from sensors can be used to monitor every piece produced rather than using sampling to detect errors, and error-correcting machinery can adjust production processes in real time.
Productivity can also increase. By using advanced analytics in predictive maintenance programmes, manufacturing companies can avoid machine failures on the factory floor and cut downtime significantly. Some companies are already setting up ‘lights out’ factories where automated robots continue production without light or heat after staff leave for home.
Some argue that, in addition, Industry 4.0 will address and solve social and environment challenges such as resource efficiency and demographic change. For example, workers can be released from routine tasks, enabling them to focus on creative, value added activities. Older workers will be able to extend working lives and remain productive for longer, ameliorating the impact of an ageing workforce. Flexible work organisation should also enable workers to combine work, private lives and continuing professional development more effectively.
But what of the risks?
Lessons from recent history show that organisations can make costly mistakes when investment decisions are driven by the technology rather than organisational strategy. Technological investments that fail to harness the tacit knowledge and experience of those using the technology may very well fail.
A high profile example is the Connecting for Health informatics system initiated by the National Health Service in England and Wales and then abandoned, leaving the NHS with a major bill. Connecting for Health was essentially procurement led and top down. Informing Healthcare (the equivalent system in Wales), in contrast, developed a user-centred approach which allowed for local variations while ensuring system-wide compatibility and is widely acknowledged as a success.
On a smaller scale, one manufacturing company achieved productivity gains through the introduction of digital technologies but initially failed to provide its employees with the analytical and programme skills required for problem solving and adaptiveness, leaving it with an expensive dependency on external consultants and a disengaged workforce.
In Denmark, a manufacturing company employed consultants to design the installation of a new production facility without involving the machine operators. By chance one operator spotted a flaw in the configuration of the machinery that would have prevented the product from drying out properly before it moved to the next stage. Fortunately this saved the company a great deal of expense and prevented a serious delay in bringing the new line into operation.
How a people-centred approach to technology works
Research evidence and practical experience alike suggest that improvements in productivity will be achieved mainly through enhancing human labour through digital assistance rather than replacing it. In short, organisations are unlikely to achieve a full return on investment unless technological innovation and workplace innovation are considered together.
What are the practical conclusions?
Be clear about what you want to achieve. Technology is only a means to an end, and that end must be aligned with organisational strategy. Are there other ways of achieving the same outcomes?
Begin and end with a systemic view of the service delivery or production process and its relationship to the organisation as a whole. Seek to maximise the synergies between technology and human potential by removing repetitive work, increasing versatility and enhancing access to information. Digital technologies can then help create the conditions for a true culture of innovation.
Understand the assumptions built in to the technology. The design of IT systems and production machinery can steer organisations towards the creation of very specialised roles and functions, leading to workforce fragmentation. This conflicts with everything else discussed in this Element!
Engage operators, users and others whose work is affected by the technology. Achieve optimal solutions and minimise the potential for error by creating times and spaces where frontline staff and technical experts blend tacit knowledge and experience with specialist expertise through mutual respect and open dialogue. Make use of – or adapt – creative approaches such as Employee-Driven Scenarios where appropriate.
Upskill people. Provide employees with the knowledge and skills required to ‘own’ and to make full use of new technologies, while providing them with fresh opportunities to contribute to the business once repetitive, low skill work is removed.