The Man And The Machine
While we are all familiar with the impact of the digital economy through e-commerce and services like taxis and food delivery, there is a more fundamental change happening behind the scenes that has important implications. This is the phenomenon called Industry 4.0 that involves a transformation of how both goods and services are made and delivered.
Industry 4.0 is based on nine major components: simulation, horizontal and vertical integration, the industrial IoT, cybersecurity, cloud, additive manufacturing, augmented reality, big data & analytics and autonomous robots. Industrial production in parts of the developed world has already incorporated many of these, and they are slowly diffusing into emerging markets.
What do these changes mean for the management of business and more specifically for business education? At its simplest level, Industry 4.0 will change the way operations management is conceptualised. Industry 4.0 permits an integrated and synchronised approach to manufacturing as machines and cells will be able to communicate with each other, and AI will allow synchronisation and optimisation in real time. Some of the traditional trade-offs in manufacturing such as between variety and efficiency may disappear. But the larger changes may be in the other functional areas.
Clearly the integration of technology with all the operational processes of the company will mean that managers need a better understanding of technological trends and choices.
It is clear that analytics will pervade the whole organisation. While management programmes always covered statistical methods and operations research techniques, the absence of sufficient data often prevented these methods from being used. That will no longer be the case.
Analytics is becoming important in other dimensions of the enterprise including Human Resource Management. Given the importance of analytics, the management graduates need to not only understand the basic tools and techniques, but more importantly be able to creatively identify opportunities to use data and analytics to improve business performance. Ideally, analytics needs to be integrated with each of the functional disciplines.
If the integrated industrial enterprise of Industry 4.0 becomes the reality as is likely to happen, the response times of companies to changes will potentially shorten, set-up times will reduce and products-mix changes will become easier to execute. As a result, competition will become more dynamic, and therefore hyper-competition may become more common across industries. Innovation will also increase as the possibilities of experimentation will be enhanced. All this means that managers need to be more flexible, adaptable and nimble than ever before.
Though managers will have multiple tools and lots of data to combat this hyper competition, stress levels are bound to increase!
The study of organisational behaviour in the past focused on how to manage human beings in the workplace. With more robots entering the workplace, understanding the human-machine interface will no longer be in the realm of science fiction alone.
Productivity is predicted to increase by 15 to 25 per cent under Industry 4.0. However, the skill sets required are likely to undergo substantial change. Managers will need to enhance their own skill profile, develop the skills of their co-workers as well as identifying people with new skills to compete in this paradigm.
