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Talk of Industry 4.0 is very much in fashion these days. There are various schools of thought as to how to best define this term. We will describe this as the vertically- and horizontally-integrated ecosystem an enterprise generates for itself and its partners, suppliers, and clients with a focused strategy on integrating large data streams from this integration into the decision-making process and drive and support the generated ecosystem. The Industrial Internet where everything is massively interconnected and data drives down costs and increases efficiencies and profits are another way of describing this idea.  2016, PWC generated the Global Industry 4.0 Survey [1], covering over 2000 companies, 9 industrial sectors, and 26 countries including Mexico. There is a great deal of excellent statistical and strategic information contained in the report, but we’ll cover a few of the highlights here.

First, is the rapid pace of advancement. The survey was conducted in 2015 and reported in 2016, with estimated projections into 2020. In 2015, there was only 32% digitization in the surveyed companies, with the expectation that this would increase to 74% by 2020. That means that at the time of writing for this article on University as a Strategic partner, we have consumed about 60% of the time expected to reach this level of digitization. While the numbers are not broken down by country, it is probably very safe to assume that Mexico will lag in digitization of its industries across all sectors in the North American segment at least. The PWC report indicates that the danger of ignoring this rapid transformation could be an almost insurmountable impediment to catching up to the competition who has. Of the surveyed companies, 55% expected ROI in the Industry 4.0 transformation to be two years or less. 37% of companies expect that ROI to take 2-5 years. This indicates that the overwhelming majority of companies expect to have seen a payoff on their investments in a relatively short time. In this exponential economy, those starting two or three years later than their competition may take many more years to catch up to those who are already underway.

The PWC report gives a strategic roadmap for an Industry 4.0 transformation for any organization that is as simple as it is profound. Six steps, all readily understood, and yet with massive implications for anyone who is ready to take this job on. These steps are quoted directly from the report [1]:

1.    Map out your industry 4.0 strategy

2.    Create initial pilot projects

3.    Define the capabilities you need

4.    Become a virtuoso in data analytics

5.    Transform into a digital enterprise

6.    Actively pan an ecosystem approach

The discussion for step 2, Create Initial Pilot Projects, identifies Universities and similar centers of innovation as natural partners for creating and managing pilot projects in the Industry 4.0 transformation. In a previous article [2], the importance of knowledge transfer activities was highlighted as an important strategy at a University. In this PWC report we see how this partnership with industry becomes a foundational activity for the healthy growth and competitiveness of the local entrepreneurial ecosystem.

And yet, if we are to become good partners in the accelerating adaptation of Industry 4.0 to our various partners, we must also consider taking on this roadmap to building the UPAEP into a vibrant, thriving, and attractive ecosystem for community. The more integrated this ecosystem becomes, the greater the mutual benefits that can be derived. As discussed in another article [3], we can look at a sister institution such as Notre Dame that has a more deeply developed ecosystem for evidence of this benefit. We recently covered some of this ecosystem generation in a digital and connected platform by discussing the iideas ecosystem that we proudly have right here at UPAEP. [4]

A few lessons we can internalize in our own Industry 4.0 transformation at UPAEP are:

·      Self-study is key. We need to size up and evaluate our digital maturity honestly and dispassionately to chart the best strategic direction.

·      Digital trust will make or break many attempts at this transformation

·      Champions for this transformation need to be identified, nurtured, trained, supported, and incentivized at every level of the organization. Transformational leadership will play a key role in this process.

·      Failures will occur, and they do not necessarily indicate a failure in the strategy. We can learn as much from our failures as our successes, and failures can sometimes identify key areas that must be addressed before the strategy can be successful.

·      A focus on the culture and people is fundamental. No amount of investment in technology, processes, training, seminars, consultants, or certifications will overcome a culture and people that are not ready to take on this job. Transformational leadership again takes center stage.

·      However much data we are collecting…it’s not enough. We will need to truly grow our data acquisition, processing, and interpretation infrastructure and skillset.

We will flesh out a few of these strategies in the coming week. A more in-depth look at Industry 4.0 in our innovation context is planned as an iideas event. Registration for this event is already open, and a lively community dialogue on the matter will hopefully yield even more points of discussion.  Industry 4.0 is rapidly advancing, and Mexico needs to advance with it to beak out of the development lag it has relative to its peers. The UPAEP can be a very powerful ally and contributor to this process, but we cannot delay in our own growth and transformation into an ideal partner in our spheres of influence and beyond.

References

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Dr. Juan Manuel López Oglesby, Director, Graduate Biomedical Engineering Sciences UPAEP

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