HR Consulting in Industry 4.0
The industry is an integral part of any economy. The mechanization of industry started with the First Industrial Revolution. The Second and the Third Industrial Revolution actually introduced the use of electrical energy, along with electronics and automation. However, driven by social, economic, political and technological changes, today’s economy is said to be facing the Fourth Industrial Revolution. This type of industrial revolution is known as Industry 4.0, which is credited to have brought a wide range of digital transformations in every existing industry or business. This has also brought important changes in the current processes replacing the manual business operations by digital computer structures.
The concept of Industry 4.0 was first introduced in 2011 at the Hannover Fair. Originally, it was a proposal for the growth of a new idea of German economic policy based on high-tech manufacturing plans. Many industries have since embraced the concepts Industry 4.0 and have extended these smart changes into diverse areas such as logistics, smart buildings, oil and gas, smart healthcare and even to smart cities.
The main concept of Industry 4.0 is that the industrial business will be built by global networks in the future which will connect their machinery, manufactures and warehousing facilities as cyber-physical systems and will also control each other intelligently by giving out information and data processing that will head suitable actions. These cyber-physical systems will take the shape of four smart changes which is smart factories, smart machines, smart storage facilities and smart supply chains.
- Significance of Industry 4.0
The major significance of Industry 4.0 lies in the creation of a communication pipeline for the constant and real time informational exchange with retailers, manufacturers, health care workers, co-workers, customers themselves etc. Its main mechanism is the dependence on machines that will stream data via wireless sensors and then sending these data to smart services or product providers and decentralized multiple small centers, where large amounts of data are analyzed. The benefit of such automation is the individual customer-oriented transformation of products and services that increases the value for both the concerned organizations and customers. With the use of electronics and information technologies in manufacturing and services, all processes have become fully atomized and digitalized during the Fourth Industrial Revolution. Small and medium industries have been significantly transformed by new age technologies such as 3D printing and new sales online services. But if we look through the customer point of view, the main benefit is personalized service or product in real time, which leads to satisfaction and loyalty benefit in case of provider companies. On the other hand, companies have to understand how associated consumer products and services can perform as a critical basement in their decision-making process.
There is a common misunderstanding that Industry 4.0 benefits only the manufacturing industries but it will also benefit the manufactures. Manufacturers are the prime focus of Industry 4.0’s but it will also influence its other contiguous areas. It not only has an impact on the local cyber-physical systems and local industrial processes but also on the entire value chain, including the producers and manufacturers, suppliers, and workers.
Two of the main tools that accompany the Industry 4.0 revolution are the smart factory and smart manufacturing, which is also known as intelligent factory or factory of the future. In this field, the manufacturers are well equipped with sensors, actors, and autonomous systems. The introduction of new technologies, machines and equipment will improve all the technological processes autonomously through self-decision making and optimization. This will result in self-organization of the manufacturing process which will change the logistics and production chains.
Another important idea of Industry 4.0 is the smart city concept. A smart city is also known as the city of the future which consists of six components such as the smart economy, smart living, smart people, smart governance, smart mobility and smart environment. It should be an outcome of seemingly faster development of the ‘next-Gen’ IT and traditional economy. It will be related to the effective assimilation of the Internet, broadcast network, telecommunication network, wireless broadband and other sensor networks with the Internet of Things (IoT) technology at the center.
In addition, Industry 4.0 involves the attainment process of materials and describes as to how a product moves through the production and delivery process to the customer. Deep analyses of the current execution of new technologies were made in the production sector to comprehend the evolution of the industrial workforce with that of Industry 4.0. Nowadays the main focus of the future industry is on the interaction of its constituent elements in production and the final products are created with as much automation as possible, to go with the present technological progress. New technologies are an integral part of our daily life. It is also important for expanding more with further development of the Internet and technologies such as 3D printing, customized products, greater online sales services etc.
The added advantage will be seen more in the new products and new solutions in a foreseeable future. Each of the objects produced can be possibly connected and networked. As a result, different business will be designed that involves the use of the Internet and connectivity. Industry 4.0 manufactories will increase their productivity and competitiveness which in result will enlarge their industrial workforce. Many technological changes will occur which may include execution of Cyber-Physical Systems (CPS) for production, smart manufacturing, embedded actuators and sensors, augmented reality, networks of microcomputers, and linking the machines to the value chain and so on.
Once these changes are implemented into a business, manufacturers will be able to create new jobs with the adoption of Industry 4.0. Although the type of job and the required skills will vary depending on the manufacturing process and the use of new technologies, the demand for new skills (catalyzed by new technological changes) will help the emergence of new jobs. Apart from the manufacturing industry, Industry 4.0 has impacted the oil industries a big way of late. Many giants in the energy sectors have also embraced the Industry 4.0 processes into their operations and they have found immediate results, particularly in the areas of energy storage and the deployment of renewable energy.
Thus, it is only sufficient to say that Industry 4.0 will definitely bring about significant transformations into the economic sector and also to the social and political landscape as a whole.
- Industry 4.0 and HR practices
Because of the benefits of globalization and increased collaboration between EU, US and Japan and other countries, the industries have changed a long way, with the global spread of Industry 4.0. The Fourth Industrial Revolution has been able to give a complex vision on future of the industry that includes the use of Big Data Analytics, interconnected machines, connected devices, cyber-physical systems, cloud computing, software and Industrial Internet of Things (IoT). The HR domain of organizations has not been resistant to this phenomenon either. HR practices have also taken a leaf out of the global smart practices shown by Industry 4.0 and a new area called Smart HR 4.0 has got evolved. Smart HR 4.0 portrays a bright canvas for digital transformation in the HR functions of recruitment, learning and development, social sharing etc.
Smart Human Resources 4.0 is a new idea which is growing as a part of the overall 4th Industrial Revolution and is distinguished by the innovations in digital technologies such as Big Data Analytics, Artificial Intelligence and fast networks such as 4G and 5G. With significant changes due to come into effect in the future, HR 4.0 will have its own set of execution challenges and sets of benefits. These benefits will, of course, depend on how the concerned organization adopts it.
The benefits of Smart Human Resources adoption are:
- To attract, develop and employ new age talent.
- Systematic and faster HR operations.
- Slender HR departments.
The HR department of any organization is responsible for handling all the related aspects of the employee life cycle, from recruitment to exit. HR plays a key role the in organizational growth. However, most of the departments in HR across different organizations today are seen to be playing only an operational role. This resulted in highly inefficient processes which are further worsened by inadequate technology infrastructure. On the other hand, technology is experiencing rapid changes. The new age technology such as the Internet of Things is enabling the digital world to be connected to physical things. This resulted in the generation of a huge amount of real-time organizational data which is guided by massively scalable storage capacities simultaneously using cloud technology.
Not only technological innovations, but the industry is also witnessing vast changes in employee generations joining the organizations.
Smart human resources 4.0 is powered by the new generation employees and new technologies. The employees have the potential to transform all the HR processes taking into account the aspects of talent onboarding, talent development and talent off boarding.
Just like any other concept, the incorporation of Smart HR 4.0 practices is not without its fair share of challenges. Smart Human Resources execution challenges can be explained as follows:
- Firstly, in selecting the correct set of new technological tools.
- Dealing with the present organizational culture.
- Handling employees’ expectations.
Another important point to consider here is the changing nature of HR practices due to the influence of Industry 4.0 processes. If we take the example of the industrial production sector, we will observe that significant changes have taken place in the industrial production processes during phases of industrial revolutions. Firstly, we saw the advent of steam power generation; then came the use of electricity and now is the time for automatization. However, we need to keep in mind that the technological waves did not decrease the overall employment rate at all, in spite of the widespread preference for automatization. Instead, it has experienced a gradual growth during this time. Although there has been a dramatic reduction in the number of manufacturing jobs, new jobs came into existence to suit the new skills demanded by the new processes attached to the Industry 4.0 practices. It is expected that HR practices in the manufacturing and industrial production ( along with all supported business) will see major changes with the advent of upcoming digital disruption. The production business will become increasingly capital intensive and the labor cost advantages attached earlier to the traditional pockets of low-cost areas will be reduced significantly. This is going to impact the HR consulting in this industry a big way.
Industry 4.0 has been able to bring in important changes into the industries, more particularly into the way jobs are executed by the industrial workers. As a result, scopes of certain jobs have got completely changed, while some kinds of jobs have totally disappeared. Some companies have also developed plans to replace some of the human workers totally with robots to assist the workforce. There will be a significant decrease in the number of routine or physically demanding jobs as well.
While there will be an increase in jobs that require problem-solving, flexible responses and customization-investments and constant change are the main challenge faced by industry HR 4.0 as there is a need to build a complex value network that produces and distribute quality HR products.
An organization, on the other hand, requires a successful Smart Human Resources 4.0 strategy so that it can cope up with the Industry 4.0 transformation challenges. Big Data and AI are such emerging technologies that will automate most of the HR processes in an efficient and leaner HR team. The next generation talent will be attracted towards the organization through smart mobile apps along with AR/VR. This will also facilitate smart remote interactions between teams. The changes in both the organizational structure and leadership style would be required for efficient Smart Human Resources 4.0 implementation. This will also allow the HR departments to play a more planned role in the growth of the organization.
HR Consulting in Industry 4.0