What is the fourth industrial revolution and what is operations management role in it?

Nina Muhleisen | 9 September 2019


The latest buzz words that are pushing our organisations to transform and stay relevant: Digitisation, Artificial Intelligence, Automation, Data analytics, Real Time Analysis, Internet of Things, Innovation, Industry 4.0.

What does it all mean? What does the fourth industrial revolution actually look like? How will it change our business and the way we work today?

I highly recommend that before you keep reading, watch this video (1:41) to find out.

As you can see, the images of Industry 4.0 are robots, virtual reality, space and nano technology. They are of paperless workforces and an environment more connected than we have ever experienced! It is about efficiency, quality at pace, design and simplicity.

With all the advances in technology at our fingertips we still need to think about the use cases and the changes we need to make to our businesses for us to be able to execute successfully in this revolution.

I think about where we are today and what is in the video and the gap is huge. This is where operations management comes onto the scene.

Let’s relate those images of the very near future in the video, to the statistics from a survey by McKinsey. This is what they found:

  • 71% executives believe that digital change will impact top line revenues materially over next 3 years. So that’s a good start but slow when you think of the future.
  • 50% CEO’s have direct sponsorship of digital change initiatives but only 17% of boards sponsor digital initiatives, so it’s important but not that important.

And then, a survey from Forbes states that 72% of chief experience officers think it’s important for an organisation to implement a digital business model, but only 15% feel their own companies have the ability to fully build and leverage such a model.

Only 15%?! That is scary. When you think about just some of the questions you have to answer when pursuing a digital transformation, it’s no wonder that only 15% believe that their companies can build and leverage a digital business model.

  • Yes, we can build the technology but how do we make it sustainable, how does this work, day to day?
  • Is it aligned to our strategy?
  • Do we really understand our customer requirements?
  • Have we thought about the integration of technology, business and processes removing silos?
  • And at the end of the day, how do we service our customers post sale?

Feeling overwhelmed? There is a lot to think about but when you break it down, a large portion of what makes a digital transition successful is Operations Management.

Operations management is the administration of business practices to create the highest level of efficiency possible within an organisation. It is concerned with converting materials and labour into goods and services as efficiently as possible to maximise the profit of an organisation. (Invesopedia.com, https://www.investopedia.com/terms/o/operations-management.asp)

So to help make industry 4.0 a little less overwhelming, and with more use cases becoming available, start with this:

  • How will your operations support new ways of working?
  • What roles will you need?
  • How are you going to take your business through the journey to becoming a more digital business?

Whilst the adoption of emerging technologies is moving faster than previous industrial revolutions, it’s not going to happen overnight. Operations management is going to need to become more agile and responsible to the dynamic environment that is the new normal.

Looking at your organisation and answering these questions will be the start of your journey through industry 4.0.