According to a new report by BDO and the Institution of Mechanical Engineers, only 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.

What is Industry 4.0?

Industry 4.0 (Industrie 4.0) is a term first coined by the German government as part of its high-tech strategy for the digitisation of manufacturing, allowing German manufacturing to build on its competitive edge. It is sometimes compared with the Industrial Internet of Things (IIoT), although some argue that IIoT (led from the USA) is what makes Industry 4.0 possible.

Professor Sam Turner, Chief Technology Officer at the Advanced Manufacturing Research Centre, says “Automation of decision-making is a key facet of the fourth industrial revolution with automation of processes arguably being the foundation of the third industrial revolution”.

Significant lack of understanding

According to the BDO Industry 4.0 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.

Worryingly, 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. 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.

Tom Lawton, Head of Manufacturing at BDO LLP, says: “It is surprising to see such low awareness of Industry 4.0 amongst UK manufacturers and clearly more needs to be done to educate, support and assist the sector as we make strides into what is likely to become the fourth industrial revolution. UK manufacturers need to push ahead or they will be left behind, especially when it is evident other countries are already moving ahead of the game with education and investment programmes being much more clearly supported by government than in the UK.

“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.”

Philippa Oldham, Head of Manufacturing at the Institution of Mechanical Engineers, said “It is now time for Government to set-out a clear long-term strategy which empowers UK companies to invest in these technologies and UK manufacturing’s long-term future.”
To read the full report: BDO Industry 4.0 Report