Data Will Lead the Fourth Industrial Revolution: Part 2
No one denies that data’s role in the Fourth Industrial Revolution (and in our daily lives in general) is growing. In Part 1 of “Data Will Lead the Fourth Industrial Revolution,” we examined how data is actually one of the major components shaping this industrial revolution. Data is both measuring human behavior and influencing it at the same time. That data-technology-human connection:
- Disrupts which jobs have priority in modern manufacturing (think: data analysts and coders becoming possibly more influential and indispensable in the daily process than manual laborers)
- Helps business leaders make better, more informed business decisions
- Reveals misconceptions or misinformation that may have been slowing down or blocking progress
- Helps us to apply technology in new ways, making it possible to innovate and get new products and services to the public faster
Data is the tool, but people still have to know how to analyze and use it. So, the next question is, how will technology and data change manufacturing in the Fourth Industrial Revolution?
The Role of Technology and Data in Manufacturing
There are five major areas that are changing processes within manufacturing, from customer service and communication to operations.
Connecting people and things is what the Internet and the Cloud do. Machines and people around the globe can connect with each other – and that connects people and machines that share common purposes.
Imagine the possibilities as we begin to link together a base of machines and systems across sectors (i.e., healthcare, transportation, manufacturing, energy, to name a few). Having seamless operations across different organizations and governments could open up the door to:
- Greater efficiency in providing services, including healthcare, emergency management, utilities, and even charitable aid
- More accurate tracking of goods (including energy) as they move across fleets and through different jurisdictions
- More effective cooperation between major players, be they businesses, nonprofits, or governments
There are practical applications for this kind of connectedness now, as well as the potential for innovation later, since groups of people will be able to work together based on their purpose and their skill set and not just location.
The Fourth Industrial Revolution will also be a mobile revolution. This point goes along with connectedness. Everyone wants to have the answers immediately at their fingertips. From connected controllers for operating machines and systems remotely to being able to access customer databases to communicating with customers and clients at a moment’s notice if necessary, we’re an interconnected society on the move. Whoever can capitalize on that and use it to their advantage wins – not just for selling to and satisfying customers but throughout operations and enterprise resource planning (“ERP”).
Big Data – from Machines
We all know that Big Data is king – from Amazon predicting what your next purchase is likely to be to using healthcare data to improve patient care and find miraculous cures. However, did you know that machine data is growing twice as fast as any other kind of data? Machines can now send information and alerts to operators in remote locations. The data can be analyzed, and problems can be diagnosed faster. Sensors can collect and transmit data that can then trigger an action or process within the machine or system, making it self-regulating. All these actions create measurable, trackable data that can be analyzed and applied in decision making.
Internet of Things (“IoT”)
We can joke about having a refrigerator that’s connected to the Internet and can message you if you’re out of milk, but it’s already here. The IoT isn’t as trivial as it might seem at first. Having an interconnected web of communication between devices and humans can make life a lot easier and even safer. Think about the convenience and security of being able to set your home security alarm from your phone, for example. You could get alerts that there’s something wrong with your water heater before it causes damage. You could have a rental property across town equipped with sensors to tell you there’s a leak in the kitchen or basement. Getting an early alert like that could minimize damage and save money and time down the road.
Now, go beyond the day-to-day convenience of this kind of information and think about the impact the IoT could have on ERP. The whole point of ERP is to connect all the portions of your business process, so you can have seamless continuity in your day-to-day operations and collect data for business intelligence. By digitizing all or most of your process, you could collect data every step of the way – from sales leads to conversion to fulfillment and supply chain. There’s also a formula out there for figuring out and tracking that elusive link between manufacturing productivity and profitability. It’s only possible because of the data that all this digitization provides.
Industrial apps are already here. For example, there’s an app that connects wind turbines on wind farms. The app coordinates the pitch of the turbines’ blades as the wind changes, which helps to maximize power output. Logistics companies use apps to manage their fleets, increasing efficiency of routes and minimizing the impact of vehicle downtime.
When you combine these five characteristics of the Fourth Industrial Revolution, you can see the potential for some powerful changes to happen – changes that will disrupt and eventually optimize the manufacturing industry. You also get a better picture of where manufacturing is heading and what it’s going to look like 10 and 20 years down the road.
What’s Next for You – A Checklist
At first, collecting all this data might seem a little cold or even calculating. But really, all this data is giving us insight into human behavior. Then, we can use digitization and technology to improve and enhance the human experience across the board.
So often, we think we know what we want or we think we know what’s going on within a business process or inside a machine. The data we keep collecting is telling us otherwise, correcting misconceptions and helping us better understand what’s going on around us.
As you start to think about your organization’s place in the Fourth Industrial Revolution, ask yourself questions, such as:
- What is your company’s purpose or mission? On a scale of 1 to 10, 10 being the best, how well is your company fulfilling its purpose?
- Who are your competitors now – and who are your competitors likely to be in the next one to five years?
- What are your competitors working on – and whom are they targeting?
- What changes in your industry have already presented you with challenges? Are there any related changes you can foresee coming?
- What’s working now in what you do each day – and WHY does it seem to be working?
- Could what is working well still be improved? Or, can that success be replicated across all areas of your organization?
- What isn’t working? Can you pinpoint what the true problem is? (i.e., communication, broken process, unreliable technology, etc.)
- What does your current business intelligence look like? Is it enough?
- How happy is your current client or customer base?
- How are you determining what your customers really want? Do you have a way of uncovering unmet wants and needs – and then offering a solution for those needs?
- Is there existing technology that can make it easier for you to do a better job fulfilling your mission – or do you need to create something new?
Think of this checklist as a starting point as you do a deep dive into analyzing where you stand now and where you want to go in the future.
Don’t be caught off guard by the fast-paced, disruptive changes happening now. We are far enough into this current industrial revolution that you should start being able to make plans for your future growth – by observing, listening and carefully crafting your strategy.
From the IoT to artificial intelligence, from smart cities to smartphones, this revolution has the potential to create a more personalized customer experience and a more personalized world.
To understand manufacturing’s future is to understand the impact technology has on the industry as a whole. Cherry Bekaert’s team can provide the right balance of:
- Information you need about technological developments that could trigger your next wave of innovative successes
- Understanding to know how best to apply the technology and manage your success
The manufacturing industry is changing at a rapid pace, and you need a team with industry expertise to help you plan for the future.
Let us be your guide forward.
Make sure to read Part 1 of “Data Will Lead the Fourth Industrial Revolution” to get the whole story.
About the Author
Randy Burton, CPA, Partner and Industry Leader for Cherry Bekaert’s Industrial Group, has served clients in manufacturing, wholesale distribution, retail and real estate sectors for nearly 20 years. His areas of specialty include SEC filings, registration statements, mergers and acquisitions, compliance and assurance. Before joining Cherry Bekaert, Randy worked at a Big Four firm and as an assistant controller of a large public retail company, where he led the financial reporting, compliance and general accounting.