Lack of understanding of Industry 4.0 will hold back UK manufacturing

According to a report published today by accountancy and business advisory firm BDO LLP in association with the Institution of Mechanical Engineers (IMechE), just 8% of UK manufacturers have a significant understanding of Industry 4.0 processes despite 59% recognising that the fourth industrial revolution will have a big impact on the sector.

As the increasing use of automation, data exchange, technology and wider supply chain communications driven by Industry 4.0 provides both huge opportunities and threats to UK manufacturing, there remains a ‘gaping hole’ in the education and understanding of Industry 4.0.

According to the report, increased productivity, better data analysis, increased competitiveness and lower manufacturing costs are the top ways in which Industry 4.0 will affect UK manufacturing.

However, a third of manufacturers are at risk of falling behind global competition having not invested in Industry 4.0 related technology or processes in the last two years. Further, a quarter say they have no plans to invest in this area in the next two years and 44% of those not investing said this was due to a lack of understanding.

Of those that are increasing investment levels, 16% of companies expected to spend over £500,000 before 2018, while 7% plan to invest more than £5million.

64% of those surveyed said that production would be a key area when investing in automation systems and Industry 4.0 related technology, with 45% and 25% respectively saying research and development and logistics were key areas of focus. Only 5% said poor investment levels were due to the lack of external finance or grants.

From a security perspective, 73% of those surveyed said Industry 4.0 will increase the risk of cyber security breaches in their business and 48% of these felt they had an adequate IT infrastructure which could prevent breaches.

“The survey findings show that much more is needed to be done to help our manufacturers understand how technologies such as automation can add value to their businesses,” Philippa Oldham, head of Manufacturing at the IMechE, said: “By embracing this new revolution our factories will become much more intelligent, be able to detect and even predict faults in our production lines before they happen. This will not only lead to increases in efficiency and productivity but also drive out waste improving our global competitiveness.”

Tom Lawton, Head of Manufacturing at BDO LLP, said: “The lack of a clear strategy on what could be the most important development in manufacturing for some years is of huge concern. We would like to see the Government doing more to match manufacturers’ long-term outlook by developing a 15-20 year industrial policy that avoids the disruptions of the political cycle.”