Introduction
4.1
It is perhaps an obvious statement, but manufacturing, like other aspects of life, is a place of constant change and transformation. The large-scale manufacturing of the past, such as cars, whitegoods, and heavy industry have, at least in part, been replaced with the manufacture of high-technology goods such as sophisticated health-care equipment, computers, mobile phones, virtual reality, artificial intelligence, and autonomous vehicles. This has collectively been labelled as ‘Industry 4.0’—the fourth industrial revolution.
4.2
This chapter will examine some of these new trends in manufacturing and how they can be utilised to strengthen Australia's manufacturing.
Industry 4.0
4.3
The remarkable transformation in manufacturing in the past few decades has become known as Industry 4.0 – a fourth industrial revolution. This fourth industrial revolution is changing the way people around the world live and work. Technological advancements in the areas of artificial intelligence and smart devices have meant disruptive technologies are now part of everyday life for both individuals and businesses.
4.4
The University of Swinburne explained Industry 4.0 further:
Industry 4.0 fundamentally changes the way in which businesses create and capture value. This shift is enabled by a set of technologies including autonomous robots, simulation technology, system integration, the Internet of Things (IoT), cybersecurity, cloud computing, additive manufacturing, augmented reality and big data.
Industry 4.0 technologies have been around individually for a while, more recently, they have begun to mutually influence and impinge on each other, enabled by the Internet and a significant reduction in cost. This allows businesses to take advantage of the technology to significantly shift their business models.
4.5
Mr Bernard Marr, in Forbes magazine, described some of the opportunities that this transformation offers:
Identify opportunities: Since connected machines collect a tremendous volume of data that can inform maintenance, performance and other issues, as well as analyse that data to identify patterns and insights that would be impossible for a human to do in a reasonable timeframe, Industry 4.0 offers the opportunity for manufacturers to optimize their operations quickly and efficiently by knowing what needs attention. By using the data from sensors in its equipment, an African gold mine identified a problem with the oxygen levels during leaching. Once fixed, they were able to increase their yield by 3.7 per cent, which saved them $20 million annually.
Optimize logistics and supply chains: A connected supply chain can adjust and accommodate when new information is presented. If a weather delay ties up a shipment, a connected system can proactively adjust to that reality and modify manufacturing priorities.
Autonomous equipment and vehicles: There are shipping yards that are leveraging autonomous cranes and trucks to streamline operations as they accept shipping containers from the ships.
Robots: Once only possible for large enterprises with equally large budgets, robotics are now more affordable and available to organizations of every size. From picking products at a warehouse to getting them ready to ship, autonomous robots can quickly and safely support manufacturers. Robots move goods around Amazon warehouses and also reduce costs and allow better use of floor space for the online retailer.
Additive manufacturing (3D printing): This technology has improved tremendously in the last decade and has progressed from primarily being used for prototyping to actual production. Advances in the use of metal additive manufacturing have opened up a lot of possibilities for production.
Internet of Things and the cloud: A key component of Industry 4.0 is the Internet of Things that is characterized by connected devices. Not only does this help internal operations, but through the use of the cloud environment where data is stored, equipment and operations can be optimized by leveraging the insights of others using the same equipment or to allow smaller enterprises access to technology they wouldn’t be able to on their own.
While Industry 4.0 is still evolving and we might not have the complete picture until we look back 30 years from now, companies who are adopting the technologies realize Industry 4.0's potential. These same companies are also grappling with how to upskill their current workforce to take on new work responsibilities made possible by Internet 4.0 and to recruit new employees with the right skills.
4.6
AIGroup has recognised the importance of this new industrial revolution, and argued that Australia is still grappling with it:
[Well before the pandemic], Australian manufacturing was evolving into more advanced modes, requiring very different mindsets, business models, skills and capabilities. These innovative approaches built on digital technologies are often referred to as Industry 4.0 or Smart Manufacturing.
Rapidly advancing technologies are producing waves of wider innovation across the economy as businesses and individuals build new social practices and business models upon them. Manufacturers are grappling with these changes in different ways and with different levels of readiness and capability.
Connectivity and data
4.7
Connectivity and the ability to share data is at the centre of Industry 4.0, as it provides accurate real-time information and flexibility to the manufacturing sector. Utilising connectivity is the key to developing automation, robotics, virtual and reality, Blockchain, and other Industry 4.0 capabilities. Without connectivity, data could not be fully exploited and only by increasing connectivity will nations and industry be able to harness the opportunities that Industry 4.0 offers.
4.8
Mr Colin Koh, Senior Business Development Manager, Industry 4.0 Consultant, explained:
However, connectivity is useless unless the machines communicating can understand one another. So, in our journey to Industry 4.0, the field of interoperability has come to the fore to facilitate the smooth exchange of information between various devices and systems, often made by a range of manufacturers…
The primary role of connectivity in Industry 4.0 is to enable companies throughout the manufacturing supply chain to form networks and optimise individual steps in the supply chain. Various information and communications technologies enable creation of networks, which include entire manufacturing processes. Links connect warehousing systems, smart machines, human workers, and production operations, to bring about a wide range of enhanced processes and services.
Skills & training
4.9
Science and Technology Australia recognised the need for specific training and skills development for Australia to take advantage of the manufacturing transformation.
The future of manufacturing in Australia lies in the areas of advanced and additive manufacturing. It is crucial that we can produce customised products on demand for consumers. To achieve this, the manufacturing sector is going to require additional skills and training, extending the skilled workforce needs of the sector. The new opportunities ahead will require expertise in engineering, software, design, and material science sciences - to name just a few of the specific fields of expertise.
4.10
AiGroup also made specific mention of the need to develop skills and training in the context of Industry 4.0:
If Australians are to have access to challenging, high-paid jobs in high-productivity industries with greater social and economic opportunities, our education and training outcomes need to lift and be more closely aligned with the rapidly changing opportunities in the labour market.
Digitalisation is disrupting the skills that education and training systems strive to supply. It is leading to reallocations of employment between tasks, sectors and regions. It is shifting labour demand towards higher level, more cognitive skills for which many workers are not adequately trained – in critical enquiry, problem solving and communication – that can be coupled with technical capability to build a broader set of skills for application in different environments, including global environments.
These pressures are reflected in significant skills shortages, particularly for professionals, technician and trades workers with STEM [science, technology, engineering, and mathematics] capabilities. At the same time, almost all employers are currently impacted in some way by low levels of literacy and numeracy – a concern when foundational skills now include digital literacy.
Dynamic workplaces mean that continuing education and training needs to be provided to existing workers when required, in shorter forms, for quick adaptation to new skill demands. Workers more capable of undertaking productive and engaged roles are better able to contribute to innovation in the workplace.
4.11
Moreover, AiGroup also identified the need to revamp Australia's apprenticeship system to accommodate the Industry 4.0 revolution:
We identified that, while the traditional apprenticeship model could still have a role within Industry 4.0, it didn't have that high degree, as we like to say, that higher diploma, of digitalisation and those digital skills that are required. The current apprenticeship model obviously gives fantastic on-the-job skills training, but we actually want future skills training. We piloted an apprenticeship model that combined on-the-job training with university-based training...
I think the industry 4.0 example is exactly that, and that can be applied more broadly. Apprenticeships are still very rigid, and they're governed within the industrial system, whereas we could have much more flexibility and a broader application of training and work-related training that could come under an apprenticeship model and be much more widely used.
4.12
A joint submission by AusBiotech, Cell Therapies Pty Ltd, MTP Connect and Research Strategies Australia also argued that for Australia to participate in and take advantage of, the emerging new wave of medical innovation, then this would require scarce highly-skilled personnel. Amongst other factors, they see a key barrier as being lack of a highly skilled advanced manufacturing workforce pipeline and recommend the development of such a pipeline.
Programming and Gaming
4.13
As noted above, 'Industry 4.0' takes manufacturing beyond the traditional mass production of physical goods. In this context, the committee received a particularly interesting submission from Interactive Games and Entertainment Association (IGEA), one which gave emphasis to the advantages of the Industry 4.0 evolution. IGEA represents the Australian video games industry, including the developers, publishers, and distributors of video games, and the makers of video game systems, consoles, devices, and accessories.
4.14
IGEA argued that these software and gaming developers represented a new and potentially lucrative sector of the manufacturing economy, even though the fell outside the traditional perspective of what constitutes 'manufacturing' – i.e. the construction of physical 'things'. They argued:
As very credibly a form of Australian manufacturing, video game development has many unique and desirable characteristics that we believe will be of interest to the Committee and Australian policy-makers more generally, particularly during the current COVID-disrupted world:
As digitally-created software-based goods, limitless copies of a game can be manufactured at no cost (and only at a small additional cost for disc versions of the game).
Digital versions of games, which comprise the bulk of sales in our sector, will never experience supply shortages, unsold inventories, or disruptions to manufacturing processes (such as those that occurred with many industries during COVID).
Digitally-distributed games, being the most common way games are bought, incur no transport costs or transport-related emissions, are delivered instantaneously, and are very resilient to global trade disruptions (such as those experienced during COVID).
Australian-made video games have a global market, with well over 90 per cent of sales going offshore, as well as a highly diversified market, with Australian-made games one of the very few Australian-made products to have been exported to every country in the world.
The global video games market that our developers target is insatiable, worth around $250 billion last year (well over twice the size of the global film and music industries combined). It is also a consumer market that thrives during periods of disruption, with the global games market experiencing accelerated growth throughout COVID.
Unlike most manufactured products, which are typically sold just once to an end-user or another business, video games can continue to generate revenue year after year as they are often (and increasingly) both a ‘good’ as well as a ‘software-as-a-service’.
Australia has two natural advantages over other countries in game development: the first being a strong global reputation for creating skilled game developers, as well as a beneficial time zone roughly halfway between Europe and North America that allows for continuous global game development under a ‘follow-the-sun’ production model.
Video game development is both specialised and highly
labour-intensive. This means that the sector can create thousands of jobs for Australians. Game jobs are also ‘sticky’ because they are driven by creativity and collaboration, meaning that once in Australia, those jobs tend to stay and cannot be easily outsourced.
The skills created by a strong game development sector are highly relevant to other unrelated sectors, including many other manufacturing sectors. For example, video game engines and the physics engineers trained in them are increasingly finding applications across the Australian economy, such as in Australia’s mining and
ship-building sectors.
A strong game development sector genuinely benefits Australia’s national resilience and security. Video game technology has been developed and employed across Government, from a recruitment tool for intelligence officers to simulation software for combat training, while many Australians with a game development background currently work in Defence.
Role for Government in Industry 4.0
4.15
There has certainly been a role for government in this new industrial frontier. Mr Fengwei Yang and Mr Sai Gu noted in their paper that: "the continuous development and practical applications of Industry 4.0 rely on government policies and supports." Furthermore, they argued that: "it is to the governments’ benefits for materialising the outcomes of various Industry 4.0 practices."
4.16
They also examined the initiatives governments around the world had introduced. A table listing those countries and their main policy documents are in the table below.
Table 4.1: Industry 4.0, a revolution that requires technology and national strategies
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Australia
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Industry 4.0 Testlabs
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Belgium
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Made Different
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Denmark
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Manufacturing Academy of Denmark (MADE)
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France
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Industrie du Futur
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Germany
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Industrie 4.0
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Italy
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Impresa 4.0
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Japan
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Society 5.0
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Netherlands
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Smart Industry
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People’s Republic of China
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Made in China 2025
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Portugal
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Indústria 4.0
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Singapore
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Research, Innovation and Enterprise 2020 Plan
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South Korea
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Manufacturing Industry Innovation 3.0
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Spain
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Industria Conectada 4.0
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United Kingdom
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The Future of Manufacturing
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United States of America
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Advanced Manufacturing Partnership
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|
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Source: https://link.springer.com/article/10.1007/s40747-020-00267-9/tables/2
4.17
The two authors concluded:
Many governments have started their tailored policies to support this technological revolution. However, we are still in the beginning of its transition…
From the existing literature, it is clear and have been repeatedly highlighted that within the industries, an interdisciplinary approach is essential to the Industry 4.0 development…
In addition, it is widely accepted that an international coordination and governmental support are necessary… We can see in many countries, the idea of an industrial revolution has long been on the horizon before 2011. Countries are tailoring their plans in accordance with their strength.
4.18
Notably, Australia signed a Cooperation Agreement with Germany in November 2015 on Industry 4.0:
Plattform Industrie 4.0 in Germany and the Prime Minister’s Industry 4.0 Taskforce in Australia have agreed to cooperate in the following areas:
Reference architectures, standards and norms
Support for Small- and Medium sized Enterprises (SMEs)
Security of Networked Systems
Work, education and training
Committee comment
4.19
Manufacturing world-wide has entered a period of transformation. The rapid development of computing power and internet connectivity are changing what is being manufactured and how that manufacturing is done.
4.20
While this may very well be disruptive, it generates new opportunities for Australian industry. It is encouraging that the Australian Government recognised this opportunity through the Testlabs initiative and its agreement with Germany.
4.21
There does, however, appear to be much further work to do as this fourth industrial revolution is still in its relative infancy. In particular, further consideration to training and skills needs to be made.