HYDAC is bucking the trend through its investment in Industry 4.0 in the form of virtual reality (VR) and augmented reality (AR) training that is “fundamentally useful and practical”, and which has been recognised as worthy of funding by the Innovative Manufacturing CRC (IMCRC).
This is according to HYDAC Managing Director Mark Keen, who is aware of research conducted at IMCRC through its futuremap® process that indicates that more than half the SMEs with which it engages are aware of Industry 4.0 but that less than 10 per cent have a well-defined digital strategy as part of an overall strategic plan.
And this despite the fact that it is well proven that uptake of Industry 4.0 technology solutions can help companies become more efficient, productive and competitive.
First movers setting fastest pace
A PWC report, ‘Industry 4.0: Building the digital enterprise’ shows how Industry 4.0 is no longer a future trend but at the heart of many companies’ strategic and research agendas.
The study highlights that companies are combining advanced connectivity and advanced automation, cloud computing, sensors and 3D printing, connected capability, computer-powered processes, intelligent algorithms and ‘internet of things’ (IoT) services to transform their businesses.
First movers, which are setting the fastest pace in terms of advanced or very advanced current levels of digitisation and integration and greater levels of investment, are set to outpace their competitors, according to the report.
Digital on its own won’t fix a thing
IMCRC CEO and Managing Director David Chuter cautions that digital on its own is not going to fix a thing unless investments are made with a purpose, ie being clear on the “why” and the “how” before investing in the “what”.
Mr Keen concurs, saying that HYDAC aims to be at the forefront of bringing new Industry 4.0 technologies in, particularly in the areas of “logistic and skills challenges in service and maintenance like mining and defence where application of new technology is having the biggest benefit because of the problems these industries have to overcome”.
“The point of difference is developing the technology from the point of view of a technically oriented company and packaging the new technology in a practical sense,” he says.
“There are plenty of companies that can develop and deploy VR and AR from a technical point of view, ie the AR/VR technology itself.
“How you apply that, in a practical sense, to real world situations requires a deeper understanding of the technology that you're showing and the training and methods that you're transmitting to people. Are they relevant, are they best practice? And so, coming from the design and development engineering point of view, I think that we bring the new AR/VR technology to industry with a completely different perspective in that it’s not just presenting the visualisation technology in and of itself but bringing that technology in a fundamentally useful and practical way to the market.”
IMCRC grants funding to HYDAC for “transformative” VR/AR training solution
IMCRC’s primary objective is to catalyse investment by companies in manufacturing and Industry 4.0 research and development (R&D) with Australian universities and the CSIRO.
IMCRC grant funding has catalysed more than $150 million in investment so far in manufacturing R&D largely with Australian owned SMEs – and the seeds have been sown for a much larger downstream economic impact.
It has deemed the VR/AR training solution – research collaboration between HYDAC Australia and Deakin University – as worthy of IMCRC grant funding.
This 12-month IMCRC co-funded research project is set to enhance the features and functionality – 3D content generation, product visualisation and user interaction – of the current prototype to accelerate the commercialisation of HYDAC’s overall VR/AR training solution.
IMCRC’s foresight is that collectively this funding will help build the bench of future and much needed industry champions.
Why the lack of Industry 4.0 uptake?
A survey, titled ‘Industry 4.0 Maturity, Industry Survey Insights’ and commissioned by Callaghan Innovation with the help of engineering consultancy firm Beca and the Employers and Manufacturers Association (EMA) highlights the lack of uptake by industry as well as the help most companies need to find solutions.
Beca Australia Industrial Business Director Rhys Davies says that change is happening quickly in the sector and that people who have been clear about the challenges and problems they are facing are getting ahead “in leaps and bounds” by integrating “appropriately matched technology solutions”.
“It can be overwhelming, especially for SMEs,” he says, but nevertheless they must respond to the market, generate brands and be responsive to community and society demands.
The study points out that uptake is slow from obtaining funds from those that hold a company’s purse strings through to not knowing enough about the technology to make a discerning decision.
A few in the survey were also concerned about the ability of the company and its people to be able to use the technology. It was noted that when given a choice of which business function an entity would hope to improve on by implementing Industry 4.0, engineering functions such as worker health and safety, equipment efficiency, as well as manufacturing and production capabilities, were at the top of the to-do list.
The IMCRC also queries why uptake of new technologies and associated business models to drive growth has been so negligible, taking into account that some companies are already experiencing the rapid innovation and growth that comes from embracing new business models and technologies that are now widely available rather than industry-specific and minimised cost and barriers to entry.
The answer, says the IMCRC, lies in Australia’s highly fragmented manufacturing sector, with nearly 90 per cent of manufacturers employing fewer than 20 people; only 15 per cent of manufacturers turning over more than $2 million per annum; and poor collaboration.
The key for more rapid adoption of Industry 4.0-led technology and business models lies in ensuring small and medium enterprises (SMEs) are well-enough informed to make smart investment decisions in a global context and encouraging effective collaboration to create scale, know-how, strength and capability.
New skills are needed – at all levels, and especially at the leadership level, it says.
New leadership skills needed
This is echoed in AI Group Chief Executive Innes Willox’s call for a major change in management culture in its paper ‘Addressing Enterprise Leadership in Australia’, which futuremap refers to as reading material.
The changing global landscape for Australian business is creating pressure on leadership capability to enhance productivity, innovation and sustainability, says the paper.
It states that Australia’s international ranking in leadership and management practices has been falling in recent years, with barriers to improvement including organisational cultures that constrain contemporary leadership practices; focus on the short-term which leads to underinvestment in longer term goals such as changes to organisational culture to support new ways of working, and the development of an organisation’s people; and limitations in the current leadership development frameworks, which predominantly focus on individual development without consideration of the collective leadership capability needed to meet the organisation’s business goals.
According to the paper, it is people that create competitive edge in organisations. The evidence from both academic research and business surveys show that workplaces with more effective leadership and management capability are more productive, profitable and innovative.
The potential in organisations can be unlocked through a shift in leadership approach and recognition of the strong link between an organisation’s culture, its structure and leadership approach, and business success, says the paper.
It postulates that a step change is needed regarding the commitment to developing leadership capability and evolving organisational structures and systems.
This requires a better understanding of how culture at both an organisational and national level is impacting on Australia’s ability to remain competitive.
The responsibility is joint, underscores the paper, with action needed by all organisations and sectors.