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Industry 4.0 is setting sail, is the UK on board?

The decline of British steel making shows what happens when the UK doesn't match the competition's efforts; it's a warning to shore up other types of manufacturing. Industry 4.0 is set to drive up manufacturing’s share of GDP in Europe by 20 percent over the next five years. With its expertese in software and sensors, the UK has a golden ticket. Are its manufacturers on board? Because the ship is about to sail.  
 
The short answer appears to be: no. The UK is still wondering what to put in its suitcase, while China, Japan, South Korea and the USA march up the gangplank, with the Germans already putting their towels on the deck’s sun-loungers. 
 
That’s if you take heed of a survey published earlier this year by Works Management and software firm Infor which finds that six in 10 UK manufacturing managers have never even heard of Industry 4.0 and 47 percent of those surveyed say their top priority is people management…
 
Forging deals
 
Meanwhile, German hardware is forging deals with Chinese software: Kuka, one of the world’s biggest industrial robotics companies is getting ready to develop a smart manufacturing platform in collaboration with Chinese communications giant Huawei.  
 
The pair are planning nothing less than a global network – built on the industrial internet of things – to enable the connection of robots across many factories - with artificial intelligence and deep learning integrated within the system.
 
“The manufacturing industry is undergoing profound transformation, and robots will be critical to revolutionising factories and driving new opportunities,” says Ryan Ding, executive director and president of products and solutions, Huawei.
 
Another German firm, Bosch, is looking to the United States for state-of-the-art IoT (Internet of Things) technology. It has 3,000 software engineers working on IoT, and has developed its own software platform for smart factories, called IOT Suite, which lets companies connect production machinery on a secure cloud and take advantage of its big-data processing.
 
Altogether, German manufacturers have pledged €40bn a year to help support new initiatives, and €200m of state funds has been earmarked for specific areas like human-to-machine interaction and cyber physical production systems.
 
So what’s going on? Are UK manufacturers treading too lightly around this new revolution or are they in fact implementing Industry 4.0 practices and technology, but calling it something else? Perhaps Government needs to up the ante?  A combination of all three seems more than likely. 
 
Industry 4.0 by any other name
 
“What the future of smart factories will be and what Industry 4.0 actually means depends on who you talk to,” suggests Dr Graeme Philp, Chief Executive of Gambica and a member of the ESCO Industry 4.0 work stream, in newelectronics, “but what we are seeing is a significant move towards greater automation and machine intelligence which is driving manufacturers to look beyond traditional centrally organised scheduling systems.
 
The fact is that UK factories are getting smarter and it’s the food industry that is leading the charge. UK-based Arla Foods, for instance, boasts automated guided vehicles (AGVs) which transport milk from the production line onto despatch tracks. The AGVs communicate with one another and line-side equipment to ensure they’re in the right place at the right time. Arla claims that its product is 100 percent error-free, and that’s largely due to this kind of automation—automation that looks like classic Industry 4.0.
 
And it’s not just the food industry. Take a look, for example, at HARTING Integrated Solutions (HIS), based in Northampton, which designs and manufactures backplanes and backplane systems for customer-specific applications. It offers solutions associated with Industry 4.0 to enable integrated industry, primarily connectivity products that combine power, signal and data. They additionally employ an Industry 4.0 modular manufacturing approach that uses RFID readers and tags to manage and monitor production.
 
Customers can place orders online using the company’s eShop and, via its SAP system factory cells, can combine items to provide different frames, modular assembly and labelling. Products are thus customised, can be produced quickly and efficiently and in very small batches, a key characteristic of Industry 4.0
 
Factory 2050
 
It only opened in January, and the team from the University of Sheffield’s Advanced Manufacturing Research Centre (AMRC) are still moving in, but there are big hopes for Factory 2050 - it’s gearing up to revolutionise UK industry with technologies that include virtual reality, robotics and bitcoin’s blockchain.
 
Part of a collaboration between Boeing and The Advanced Manufacturing Research Centre (AMRC), it’s been dubbed ‘one of the most advanced factories in the world.’
 
The £45m ‘reconfigurable’ enterprise will eventually employ about 70 people and boasts cutting edge manufacturing and assembly technologies, including advanced robotics, flexible automation, next generation man-machine interfaces, and reconfigurable data-driven assembly lines.
 
This automated factory will generate huge volumes of data with all its  cameras, lasers and other sensors. It will retool on the fly, digitally swapping out parts of the production line to model changes a perpetual  hunt for efficiency. Once an automated system has determined the best set of tools, the factory can physically rearrange itself to create the best production line for the job. Using blockchain, it will track and certify the path of raw materials, ensuring provenance and quality.
 
It’s hoped that the factory will be a hub for design and manufacture in a variety of sectors, with involvement from major players like Boeing, Rolls-Royce, Hitachi and Microsoft. Initial projects include a plan to take aerospace manufacturing technology into the construction industry and investigate digitally assisted assembly technologies which could help to fill a looming skills gap in the aerospace sector.
 
The spanner in the works
 
With a number of firms leading the charge, there is change afoot on the UK’s industrial floors and the aims of Factory 2050 are impressive, but it could be that this it’s just not enough. The problem is that new technology requires a certain level of skill in order to make the system work and that’s where manufacturers may find a spanner in the works. 
 
Published last week, the EEF Skills Report 2016 suggests that any plans manufacturers have to ramp up productivity improvements and to capitalise on Industry 4.0 could be derailed, because the UK is struggling to provide the right quantity and quality of skills to meet the sector’s needs.
 
With demand for those skills set to increase over the next three years, the situation can only get worse. The Skills Report shows 72% of firms are worried about how demand is going to be met and 73% of companies have already faced difficulties recruiting skilled workers in the last three years
 
The situation in the north-east is particularly acute. The Employer Skills Survey, published by UKCES, found there are currently more than 27,700 job openings in the North East and nearly 7,000 are difficult to fill because of a lack of skilled recruits.
 
The report also claims the Government has done little to ease the burden of finding suitable candidates, and recent policy changes, such as the National Living Wage, the apprenticeship levy and the proposed immigration skills charge, have exacerbated the issue. 
 
It makes a series of recommendations, including scrapping the proposed immigration skills charge and introducing grants to tackle under-representation in apprenticeships.
 
The stakes are high
 
Perhaps, for Germany, the stakes, and therefore the incentives for Government to put its full weight behind Industry 4.0, are simply higher: in the UK, manufacturing makes up just 10 percent of national output, and in the US, 12 percent, the German manufacturing sector accounts for 22 percent of the country’s economic output.
 
In a recent research report, looking at manufacturing in the UK, it was found that while German manufacturing was 2.7 times larger than in the UK, German companies were spending upwards of 6.6 times as much on automation than those in the UK, and there appeared to be no negative impact on employment levels.
 
Experts believe that within two years the first wave of factories using smart technology will be fully operational, with widespread adoption in factories around the world in the next decade. For the UK, a failure to digitise - and soon - could cost industry a decline of roughly €220bn by 2025, according to some experts.
 
British industry needs smart industrial policy to ensure it is competing on a level global playing field and, as in Germany, Government must play a large part. Failure to act will put much more than British steel production at risk. And that could prove catastrophic.
 
 
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