Plant & Works Engineering
Preparing for Industry 4.0
Published:  09 February, 2017

Eliza Rawlings, managing director, Festo, takes a look at preparing for the fourth industrial revolution.

Revolution is an evocative word, and one that doesn’t always have positive connotations. However, put into context of an industrial revolution, it is certainly the most descriptive term. New advancements in industry have not just altered the way in which goods and materials are produced, they have always had a fundamental impact on how society develops and is structured.

The first industrial revolution, beginning around 1754, used water and steam to mechanise production. There is a debate around the actual start date of the second industrial revolution, but it was early in the 20th century when electrical power enabled mass production. The third industrial revolution, often referred to as the Digital Revolution, started between the mid-point of the 20th century and the 1970s with the development of electronics and computers. 2015 is seen as the beginning of the fourth industrial revolution with the introduction of smart automation.

Today technology, engineering and manufacturing are developing phenomenally quickly. These disciplines are colliding together creating a manufacturing sector where products can be ordered, processed, manufactured and delivered without a pair of human hands being involved in their production. While this will change the landscape of manufacturing, this level of automation and artificial intelligence will only increase our reliance on engineering skills and maintenance expertise.

To make the most of the opportunities of Industry 4.0, we need to think quickly and respond immediately. Leaders will need to develop a clear vision of where they want to take their organisations. They’ll need to identify possibilities and raise the capital to invest in new production equipment and facilities. This is not about changing factories completely overnight. Instead it’s about having a concerted and planned approach that can take advantage of developments as they occur.

That’s the business plan. What can be often forgotten is the leadership capabilities that will be required not to just take advantage of those opportunities but, importantly, to take people along on the journey.

For example, let’s take the skills shortages that are often reported. In 2015 Festo’s own research showed that manufacturers have been facing increased shortages of skilled labour, especially skilled engineer, for the previous three years, holding back development of our manufacturing sector.

If the UK is to become a driving force for Industry 4.0, every manufacturer needs to get involved in skills development, understand the skills needed in the factories of tomorrow, and invest in the development of these skills today.

The government’s focus on developing three million apprentices by 2020 will hopefully mean that we have a pool of talented people to draw upon. It will also mean that existing employees might need to be reskilled in alternative areas, such as IT and mechatronics.

Just as employees might have to be reskilled, leaders will need to develop strong capabilities and qualities to tackle five changes to the environment that will impact on their leadership.

New competition

Disruptive technology can cause young and innovative companies to gain market traction, quickly eroding market dominance of larger players who are slower to react. Standard & Poors 500 index shows that the lifespan of top companies has shrunk from 61 years in 1958 to 18 years today. Faster, younger and dynamic organisations are constantly emerging to challenge the authority of market leaders. Leaders will need to spot and react quickly to new competition on the horizon.


It is stated that the structures of today will not suit the companies of tomorrow. Dr. John Kotter wrote in a Harvard Business Review article that we must not limit ourselves by thinking that organisations need to have a hierarchical structure.

Dr Kotter believes that hierarchy inhibits transformation because at a philosophical and practice level, hierarchy opposes change. “It strives to eliminate anomaly, standardise processes, solve short-term problems, and achieve stop watch efficiency with its current mode of operating.”

Today, successful organisations need to move towards dispersing leadership and managerial responsibilities throughout a network. "While the hierarchy is important, as it always has been for optimising work, the Network is where big change happens. It allows a company to more easily spot big opportunities and then change itself to grab them," says Dr John Kotter.

Leadership 4.0 needs to free up the decision making process so leaders can quickly grab hold of new opportunities while maintaining a clear flow of communication that runs seamlessly throughout the organisation.


Professor Dr Wolfgang Wahlster, Director and CEO of German Research Centre for Artificial Intelligence and a Professor of Computer Science at Saarland University, describes the world of Industry 4.0 where “products and production facilities will become active system components, controlling their own production and logistics. They will contain cyber-physical systems that link the cyberspace of the Internet with the physical world.”

Machines will be able to interact with their environment. They will plan and adapt their own behaviour to suit. They will learn new behavioural patterns and strategies to be self-optimising. They will allow even the smallest of batches with rapid product changes and a large number of variants to be produced efficiently.

Leadership 4.0 needs to harness individuals to fully explore, utilise and maximise on new technological advancements.

Hyper connectivity

We are now used to being constantly connected. We’re used to using multi-devices (and if we’re not, the younger generation certainly are). We’re used to communicating on different platforms and in a wide variety of ways. With Industry 4.0 we have to take another giant leap. We have to imagine that machinery will always be on, always connected, making decisions without our intervention, optimising our production and managing all of the logistics.

For machines to communicate with each other, and for people to interact with machines, will require a new and standardised language. The Internet will be the communication platform in the factory. This is termed the Internet Protocol and we’re going to have to become proficient quickly to take advantage of the opportunities of hyper connectivity.


Facing a new and different future is a challenging prospect. Managing change of this nature requires communication at a whole new level. Leaders will need to communicate when the future is still uncertain. For many this is a particularly frightening prospect.

As we move into Industry 4.0, open and honest communication is perhaps the most important leadership attribute, especially as we’re entering another phase of enormous change and one that will impact on the lives of many who work in the manufacturing sector. From experience we know that unless we can engage people in the process of change, change will not be as successful as we hope. Because manufacturing will again be affordable in high wage countries, such as the UK, there is an opportunity for us to reclaim our manufacturing heritage in the new automated era and become an early adopter of Industry 4.0.

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