Avainsana-arkisto: Industry 4.0

Good Business in Industries Needs Good Human Factors Knowledge and Management

Jan Dul & Jari Kaivo-oja:

Grand challenges in the industry in the Industry 4.0 era

Under the banner of ‘Industry 4.0’ a new industrial revolution is unfolding. New technologies and digital transformation force manufacturing companies to prepare for the future and to utilize new technologies for ensuring their competitiveness in markets. The road to a successful end result crosses a jungle of different new technologies, new possibilities of digitalization, and changing roles of humans. For survival, companies need new strategies and plan to reach their targets. Is the Finnish industry ready for this?

To be able to answer this question we need to ask if our “national machine” (ministry, decision-makers in industry, education institutes, politics, and the public opinion) is prepared for this inevitable change in industries. We already know that the industry sectors must acquire new technologies and make steps towards digitization. We also know that there is a huge need for increasing people’s skills and competencies in the industry to work with these novel technologies like Industrial and Service Internet of Things, AI, AR/VR, Cloud computing, Digital Twin tech set, Blockchain, sensory technology, 3D printing of different components, cobots for helping humans at work, Food security. Nanosensors in packaging to detect salmonella and other contaminants in food etc.

We also know the challenges of an aging workforce and the awareness that technologies take over many human work tasks, and at the same time, new roles and work tasks are coming for humans. Technological and human challenges go hand in hand and the human factor will remain a core element of a successful Finnish industry. Now there is a need for integrated humans and systems approach in the design and management of production systems and of future work. This allows to maximally use of the potential of humans as being part of the production system. This knowledge is largely available in the human factors and ergonomics field and can readily be applied in the Finnish industry.

In economic terms, low quality of integration of human factors creates a negative effect on the national economy e.g. due to inefficiency of the systems and cost of bad working conditions. Although we are economically and socially developed we are ergonomically undeveloped. This is not only a question of money but attitude and capability to utilize HFE (Human Factors Engineering) knowledge in general. The critical question is who will compensate for this kind of broad-scale negative effect in society or are just sending a high-cost bill to taxpayers?

For being successful we need to nurture this unused human potential in the right way. When designing or changing production systems we must ensure a mutual development of technology and manufacturing processes by using human factors in design for ensuring a good fit between the two human and the work systems, not only in large companies but also in small and medium-sized companies.  Do we have capabilities for making this happen at the national, industry, and company level? The simple answer is “no”. At the national level, industrial policies for technological development by the ministry of economic affairs (e.g. Renewing and Competent Finland 2021−2027 Program, TEM industrial sectoral reports, AI 2.0 Report etc.) are quite isolated from social policies for human development by the ministry of health and labor (e.g., future of work where integration of HFE in the design of systems and processes is neglected.) At the industry level, separate national policies are being discussed and implemented for specific industries in separate initiatives. At the company level engineers and other technical experts work on changing production systems separately from occupational health and safety (OHS) experts.

In Finland, Industry 4.0 is fully technology-driven, and attention to the human factor at work is fully driven by occupational health and safety. For example, the guideline of the Ministry of Social Affairs and Health intends to help Finnish companies with health and safety issues only but is not taking into account optimizing the interfaces between humans and the other parts of the manufacturing process for improving the performance of the entire system, humans included. The same holds for the health-driven activities proposed in The Occupational health 2025 – In cooperation workability and health.

We can also wonder if the “Work 2030” vision and strategy take an integrative approach to link technology, economy, and human factors for enhancing the cooperation and development between these three core actors in the industry. The skill of HFE makes it possible to combine all needed collaborators and stakeholders together for integrating the HFE into engineering and management work. As a multidisciplinary field, HFE is a must and while respecting the identity of different fields we need to recognize the existing barriers to be able to do cooperation between different fields of knowledge.

The policy is needed for combining technologies, business, and people in workplaces

As a production system consists of all activities that are either produced by humans or by machines, the design of a production system is about designing both activities in concert. This means that even when technologies and digitalization are made for improving the performance of the manufacturing process, humans make the final impact on how things will go in reality – in good or bad. System performance can only be realized while taking into account the human factor. If human factors and ergonomics (HFE) are not orchestrated professionally in companies, large-scale negative effects are created in the whole society on the company and national level.

A ‘human factors’, the HFE approach ensures a fit between humans, technology, and the entire production process. It maximizes system performance while maintaining good standards of ergonomics. It means that systems, work, and works environment are realized for maximizing what technology can do, and what people can and want to do. In this approach technology, organizational and human expertise are combined and optimized for maximum output in terms of the economic and social goals of the system. International evidence shows that designing work processes in such a way can serve both goals simultaneously.

How can this be realized in Finland? What is our policy that combines the development of performance of the production processes and well-being of workers at the same time?

The Finnish Human Factors Engineering way  

What is the status in companies of the integration of HFE in the design and management while preparing for Industry 4.0? Now, according to the law, OHS-driven activity is a must for companies. In Finland, occupational health services and professionals help companies to develop the workability of the workers and ensure healthy and safe work environments. They focus on optimizing the load of the work for the worker throughout the whole work process and the work life. Good so far, but how will this be possible without HFE expertise in an era of Industry 4.0 where human-system integration is essential? HFE refers to Ergo Nomos = Work Laws of nature which is the science and theory for designing work processes. This internationally accepted definition of HFE and ergonomics is largely absent in Finland. Companies do not get this HFE knowledge from current OHS services and professionals when searching for and choosing new solutions to modern Industry 4.0 production. In Finish public opinion there is a common understanding that occupational health services offer ‘ergonomists for workplaces’, but this idea of ergonomics is limited to the health and safety of workers, and does not deal with system performance.

On the positive side, the Finnish law recognizes the difference between OHS professionals and OHS experts. The physiotherapist is one of the OHS professionals and the ergonomist is the OHS expert. However, the OHS field does not make a distinction between physiotherapists (who is called `occupational physiotherapists ‘in public) and ergonomist. In Finland `Occupational physiotherapist` represents narrow health and safety based definition of ergonomics. This has led to the situation that companies get most often an occupational physiotherapist for tackling true ergonomics issues instead of the ergonomics (HFE) expert that is mentioned in the law. This is an obvious problem in the Finnish work life at the moment. For these reasons, the multidisciplinary approach to the development of working life is thin from the broader system perspective.

Ergonomics is a science, theory and principles that takes a system approach and deal with the interfaces between human and other parts of the system. This means engineering kind of work for optimizing the work for human. HFE takes into account the physical, cognitive and organizational aspects of the work and work system. This approach is helping to integrate human via HFE knowledge as a part of the process proactively on macro and micro levels. In Finland, unfortunately, we see only reactive micro level OHS activity because of health problems of the workers. We cannot survive a long time with this kind of one sided and siloed OHS approach with health and medicine sciences. We need a national level policy that notice the need for fixing the gap between OHS activities and performance and productivity development activities in companies and public sector organizations for combining HFE and performance knowledge.

Figure 1. The Gap problem. Source: Jan Dul´s lecture in ERGO2030 Webinar, in the Palace, Helsinki, Wednesday 10.11.2021.

Innovations for integrating HFE for improving performance of the companies

For being able to succeed in this change in the industry for ensuring the competitiveness of our companies, the productivity of the work, and wellbeing at work, we need an integrated policy that leads OHS, HFE experts, and performance developers to define the performance factors to be noticed, studied, analyzed and designed for ensuring the fit between human and work system. It is good to be aware that part of the recent poor productivity development of work in Finland is due to poor human ergonomics knowledge in design. Solving this big problem needs understanding of the system approach where existing theories and practices are offered to the use of the companies in this industry and technology change process.                                                                                       

ERGO 2030 project brought as an example, facts and factors to be noticed for this systemic and organizational approach by creating a road map to be utilized in different industries and companies. However, this roadmap does not help unless we do not have a policy in Finland that facilitate the OHS and business/technology actors to work together and especially if the education and services of design ergonomics for work systems are not in place and available for companies and technology suppliers.

Let`s bring the key stakeholders around this topic of human, work, productivity, and well-being at work at the same table and listen to the needs and requirements for creating a mutual understanding how shall the national level roadmap looks like for ensuring the capability of our industry and wellbeing of the workers at work. In another case, we are not able to implement efficient digital and new technology transformation in the industry. This negative alternative will lead us to very slow organizational adaptation processes in industries, low work productivity levels, and to huge negative externalities to society. This big financial cost and bill will be paid by taxpayers.

And last but not least. Industry 5.0 is said to be human-centered but can it be realized without having HFE in place in Industry 4.0? The answer is `no`. Using HFE skills already in Industry 4.0 phase makes us better prepared for Industry 5.0 phase. If this is not taken into account now problems maybe even bigger in industry 5.0 what comes to HFE and phenomena related to that in work-life practices.

Jan Dul
Professor, Rotterdam School of Management, Erasmus University, the Netherlands

Jari Kaivo-oja
Research Director, Finland Futures Research Centre, University of Turku

About the ERGO 2030 project

ERGO2030 project was funded by the Anita and Olavi Seppänen Memorial Foundation, founded in 2018 in Helsinki, Finland. The Foundation actively supports Finnish art and culture, and national orthopedic research as well as maintains the historic church and its environment of Tuupovaara in Eastern Finland.

ERGO 2030 report was published in 2021: Reiman, A., Parviainen, E., Lauraéus, T., Takala, E-P., & Kaivo-oja, J. (2021) ERGO 2030 – a roadmap for human consideration in the design and application of new technologies in industry. Tutu ePublications 3/2021: https://www.utupub.fi/handle/10024/152322

About the authors

Professor Jan Dul is a professor of Technology and Human Factors at the Rotterdam School of Management, Erasmus University, the Netherlands. He has a background in the technical, the medical and the social sciences. His is a specialist in human factors and ergonomics (HFE) and studies the interaction between people and the physical and social-organizational environment to maximize business performance and human well-being. His research contributes to the design of successful products and services, and to the development of work environments for high performance (creativity, innovation, productivity, quality, health and safety). He is the winner of several national and international awards including the Human Factors NL award, the Hal W. Hendrick Distinguished International Colleague Award of the USA human factors and ergonomics society, the IEA Distinguished Service Award of the International Ergonomics Society, and the Liberty Mutual award for the paper ‘A strategy for human factors/ergonomics: developing the discipline and profession’. He has advised the EU and national governments about work environment policies, is a regular speaker at management events worldwide, and has shared his insights with companies on how to improve performance with HFE.

Dr. Jari Kaivo-oja is an Adjunct Professor and Research Director working at the Finland Futures Research Centre, University of Turku. He is a researcher in the Manufacturing 4.0 project funded by the Strategic Research Council of the Academy Finland. He was scientific expert in the ERGO2030 project. He has worked in various European research and development projects serving among others the European Foundation for the Improvement of Living and Working Conditions (European Foundation/Eurofound), the European Agency for Safety and Health at Work (EU OSHA), the European Commission, the European Parliament and the EU DG Enterprise and Industry (DG-ENTR).

Articles

  • Reiman, A., Kaivo-oja, J., Parviainen, E., Takala, E-P. & Lauraeus, T. (2021). Human factors and ergonomics in manufacturing in the Industry 4.0 context – A scoping review. Technology in Society. 65, https://doi.org/10.1016/j.techsoc.2021.101572
  • Reiman, A., Kaivo-oja, J., Parviainen, E. Lauraeus, T. & Takala, E-P. ”Human work in Industry 4.0: A road map to technological changes in manufacturing”. Journal manuscript in review 

Chapters:

  • Reiman, A., Kaivo-oja, J., Parviainen, E. Lauraeus, T. & Takala, E-P. ”Human Work in the Manufacturing Industry 4.0”. Book chapter in review for textbook: Operator 4.0 by Springer.
  • Takala, E-P. & Reiman, A. Ergonomia. Article to Fysiatria. 6. edition 2023. Duodecim.

Conference papers:

  • Takala, E-P., Reiman, A., Parviainen, E., Lauraeus, T. & Kaivo-oja, J. (2021). ERGO 2030 – A roadmap for the implementation of human factors within the newest technology. In: Black, N., Neumann, P.W., Dewis, C. & Noy, I. (Eds.), Book of Extended Abstracts, 21st Congress of the International Ergonomics Association, Vancouver, Canada, 14-18 June 2021, pp. 389-392.

The final ERGO report:

  • Reiman, A., Parviainen, E., Lauraéus, T., Takala, E-P., & Kaivo-oja, J. (2021) ERGO 2030 – tiekartta ihmisen huomioimiseen suunniteltaessa ja sovellettaessa uutta teknologiaa teollisuudessa. Tutu eJulkaisuja 3/2021: https://www.utupub.fi/handle/10024/152322 

Picture Stefan Keller Pixabay 

Out of the cages: Here comes the cobots

Kommentoi

Mikkel Stein Knudsen and Jari Kaivo-oja:

Forbes, The Guardian, and Financial Times have written about them. The US Department of Commerce lists it as one of 5 Manufacturing Technology Trends to Watch in 2019. Cobots – short for ‘collaborative robots’ – are increasingly entering into industrial manufacturing, profoundly changing the ways in which humans and robots interact.

As one research article puts it, “robots have long left the cages of industrial settings: They work together with humans – collaboratively” (Korn et al., 2018). Smart Cobots are a key technology informing the futures of manufacturing; our research topic in the large Strategic Research Council-project Manufacturing 4.0.

What are cobots?

Collaborative robots differ from traditional industrial robots precisely in the direct interaction with human workers. They are intended to e.g. handle a shared payload without the need for conventional safety cages or separating protective measures. They are generally small, lightweight, mobile and flexible units, and they enable – at least in theory – organisations to leverage the strengths and endurance of robots with the tacit knowledge and agile decision-making skills of humans. Both humans and robots have crucial advantages (Fast-Berglund et al., 2016) – while robots ace repetitive and monotonous tasks, humans remain the most flexible resource in the system. Humans still handling unexpected and unplanned tasks better that their automated co-workers. A human-robotic collaborative approach also proved superior in experimental research settings compared to a similar purely robotic process (Bloss, 2016).

With its focus on flexibility the paradigm of cobots aligns well paradigms of Industry 4.0 – driving at increased automation and increased efficiency in parallel with increasingly flexible production processes, small batch sizes and mass customization.

A sector on the up

Industry forecasts for the near future market for collaborative robots are wildly positive, from global revenues of $7.6 bn in 2027 to the exceptionally optimistic 2019-prediction from the Robotics Industries Association of a $34 billion cobot market by 2026. This will require exponential growth from the current global market of around $600 million in 2018, which in itself was 50% higher than the year before (Sharma, 2019). The academic research output on cobots is also rapidly growing, as the assessment of articles indexed in Web of Science (Figure 1) shows.

Fig 1. Articles indexed in Web of Science with “collaborative robot*” or cobot* as title or keyword (From Knudsen & Kaivo-oja, 2019)

Until now, Finland has not been at the centre of this research. Out of a total of 496 articles in Web of Science published since 2015 (search: 1.1.2019), only 3 are affiliated with Finland. In a ranking of countries based on this data, Finland places 32th. A recent report for the Ministry of Finance in Finland (Rousku et al, 2019) also identified this problem, as well as collaborative robots as a key growth market, asking (p. 46): “Can Finland afford not to take a slice of a market that generates new wealth and new vitality for business and society alike?” A very good question – indeed.

Cobots may provide answers to megatrends

One of the reasons the future could be bright for collaborative robots is that they can answer to a number of different societal megatrends. As the research paradigm on cobots matures and moves away from strictly technological concerns, these links between societal drivers and cobots should be explored in much further detail.

An example, already prominently suggested in the literature, is that cobots may reduce ergonomic challenges and improve occupational safety and health e.g. in factory settings. By reducing the physical workload for workers, cobots can also enable work environments more responsive to older employees – a highly significant advantage given the changing demographics of labour markets across most industrialized nations.

Key global trends to 2030
(from ESPAS, 2015)		 Potential role of cobots
A richer and older human race characterised by an expanding global middle class and greater inequalities. Enabling inclusive labour markets more responsive to older employees, employees with disabilities.

Providing a work environment more responsive to human factors, ergonomic and OS&H concerns.
A more vulnerable process of globalisation led by an ’economic G3’. ‘Bringing manufacturing back home’; cobots as enabler of competitive manufacturing in high-cost environments.
A transformative industrial and technological revolution. A ‘gateway into factory automation’, enabler of semi-automated manufacturing choosing select elements of Industry 4.0 for optimized production process.
A growing nexus of climate change, energy and competition for resources. Improved resource efficiency, enabler of circular economy and remanufacturing
(Sarc et al., 2019; Huang et al., 2019).
Changing power, interdependence and fragile multilateralism.

In addition, collaborative robotics will be at the absolute forefront of the development of human-machine interactions, which will help shape important parts of our lives in the coming decades. Unlike most of our everyday interaction with machine learning-algorithms, our interaction with cobots has a distinct physical – see, feel and touch – element to it.

We therefore believe that understanding the topic of cobots, envisioning their deployment, and exploring both preferable and undesirable futures of and with cobots must be prominent future research topics.

Fig 2. Current frontiers of cobot research (based on Knudsen & Kaivo-oja, 2019).

Figure 2 shows some of the current frontiers of cobot research and technology, based on our initial literature review. For each of these pillars many research questions are rapidly arising, and they deserve our attention. Because robots are moving out of the cages and into a space near you.

Industrial robots have traditionally worked separately from humans, behind fences, but this is changing with the emergence of industrial cobots. Industrial robots have traditionally worked separately from humans, behind fences, but this is changing with the emergence of industrial cobots. To sum up, emerging cobot issue requires more attention in the field of Industry 4.0/Manufacturing 4.0. Cobots, or collaborative robots, are robots intended to interact with humans in a shared space or to work safely in close proximity. Service robots can be considered to be cobots as they are intended to work alongside humans. This “cobot approach” is very promising, because it focus on human-robot interaction from the beginning of industrial process planning. Typically, sensors and software are needed to assure good collaborative behaviour.

Summary

It is important to note that cognitive aspects and cognitive ergonomics are highly relevant for new digitalized work life. The IFR (Institute for Occupational Safety and Health of the German Social Accident Insurance) defines four types of collaborative manufacturing applications: (1) Co-existence Cobots: Human and robot work alongside each other, but with no shared workspace, (2) Sequential Collaboration Cobots: Human and robot share all or part of a workspace but do not work on a part or machine at the same time, (3) Co-operation Cobots: Robot and human work on the same part or machine at the same time, and both are in motion and (4) Responsive Collaboration Cobot: The robot responds in real-time to the worker’s motion.

All these types of cobots provide interesting possibilities and challenges for Industry 4.0/Manufacturing 4.0 activities. Are we ready to face these challenges?

Mikkel Stein Knudsen
Project Researcher (M.Sc., Pol. Science), Finland Futures Research Centre, Turku School of Economics, University of Turku    

Jari Kaivo-oja
Research Director, Finland Futures Research Centre, Turku School of Economics, University of Turku.

***

The project Manufacturing 4.0 has received funding from the Finnish Strategic Research Council [grant number 313395]. The project “Platforms of Big Data Foresight (PLATBIDAFO)” has received funding from European Regional Development Fund (project No 01.2.2-LMT-K-718-02-0019) under grant agreement with the Research Council of Lithuania (LMTLT).

***

References

Picture copyright Universal Robots A/S, case Hofmann

Bridging Industry 4.0 and Circular Economy: A new research agenda for Finland?

Yksi kommentti

Mikkel Stein Knudsen and Jari Kaivo-oja:

Emerging academic research concerns how the principles, practices, and enabling technologies of Industry 4.0 might unlock the potentials of Circular Economy (CE) and sustainable manufacturing (Jabbour et al., 2018; Stock et al., 2018). Digitalisation (Ellen Macarthur Foundation, 2016;  Antikainen et al., 2018) and the use of Big Data (Hazen et al., 2016; Nobre & Tavares, 2017; Jabbour et al., 2017) are seen as key enablers for increased sustainability and for the implementation of a circular economy. Technology is also a necessary enabler of a move towards Product-Service Systems (Tukker, 2015; Antikainen et al., 2018). As Moreno & Charnley (2016) notes the fundamental drivers behind Circular Economy and Industry 4.0 overlap. It is an obvious fact that the combination of Circular Economy and Industry 4.0 leads us towards the Green Economy vision.

However, research output integrating the two important fields is still very scarce and plenty of unexplored research areas remain. Tseng et al. (2018)  deliver a telling example of the hitherto missing research: While separate queries in Scopus using “Industry 4.0” and “Circular Economy” yields 4060 and 2452 results respectively, a combined search using both “Industry 4.0” and “Circular Economy” as keywords provide only three results (all published in 2017). Combined searches for “Circular Economy” and ´digit*´ (i.e. digital, digitalisation etc.) provide similarly limited results (Antikainen et al., 2018). Stock et al. (2018) make the point even broader, as they conclude, “there are rarely any sustainability assessments for Industry 4.0 available”. All transition paths are not automatically leading us to sustainable development and greener infrastructures, which typically mean sustainable land use, widely adopted green consumption lifestyles and broad industrial use of nature saving technologies.

If we – ‘we’ as researchers, as Finland, as the international society – should harness the potential synergies of these two emerging business systems, and strive for a transition to a greener economy, there is therefore plenty of work ahead. It seems likely though that solving this integration puzzle, however, will also bring major (business) opportunities and a competitive advantage for the future.

Industry 4.0 and a new sustainability optimism?

Stock et al. (2018) note that most literature linking sustainability and Industry 4.0 do so with a basic tenor of optimism. Opportunities for increased sustainability by using novel technological opportunities in combinations with new business models take centre stage. Improved traceability of smart products through the entire supply chain and during the products’ use phase allow manufacturers continuously to optimize the performance of both product and production, which may deliver a more efficient use of resources. For industrial practitioners sustainability, environmental, and social opportunities is also a noted driver for implementation of Industry 4.0 (Müller et al., 2018). Highlighting what is at stake for a green economy transition, Erol (2016) even asks thought-provokingly if Industry 4.0 is the very last chance for a truly sustainable production?

Notably, the United Nations also talks of ‘Big Data for Sustainable Development’, and how “new sources of data, new technologies, and new analytical approaches, if applied responsively, can enable more agile, efficient and evidence-based decision-making and can better measure progress on the Sustainable Development Goals (SDGs) in a way that is both inclusive and fair”.

Source: United Nations

While this ‘optimistic’ strand of research is obviously both highly relevant and highly inspiring, increased technology uptake could also happen unsustainably. Rise of enabling technologies behind Industry 4.0 is mirrored by rising demands for scarce resources such as (certain) metals and also highly dependent on increasing consumption of energy.  We can probably sum things up this way, “Industry 4.0 and its related technologies may facilitate more sustainable production, but sustainability is not an endogenous feature of Industry 4.0.”

Industry 4.0 and its related technologies may facilitate more sustainable production, but sustainability is not an endogenous feature of Industry 4.0.

Dual challenges: A sustainable Industry 4.0 and Industry 4.0 for sustainability

In the context of sustainability, new technologies might indeed come Janus-faced. Additive manufacturing and 3D printing disrupts supply chains and reduces the need for large inventories, such as in the aero-industry (cf. Khajarvi et al., 2014). Instead, parts are manufactured (printed) at the time of actual demand, increasing efficiency and reducing waste. On the other hand, beyond specific supply chains, when every part and product can be produced anywhere and at any given time, it takes little fantasy to imagine marked reductions of product lifecycles and overall increases in consumption. Additive manufacturing is therefore not a guarantee for more sustainable production and consumption (cf. review by Kellens et al., 2017 & Holmström & Gutowski, 2017).  On average, production processes using additive manufacturing even results in a higher environmental impact than conventional production processes, although this could be compensated by functional improvements during the use stage of AM manufactured parts (Kellens et al., 2017). In her highly cited literature review, Aalto University’s Cindy Kohtala (2015) concluded “Distributed production holds promise of greater environmental sustainability, but it is not a given that it will be a new, clearly cleaner production paradigm.”

Figure 1. Environmental threats and benefits of distributed production (e.g. decentralized 3D-printing). Source: Kohtala, 2015.

Interconnectivity and continuous massive amounts of data also come with an environmental price: In Denmark for example, the government expects that international data centres will take up 20% of the current national electricity consumption by 2030. The global electricity consumption for mining cryptocurrency using Blockchain-technology already today exceeds the current national electricity consumption of Finland significantly, according to consumption estimates in a recent issue of The Economist (2018).

The challenge then is (simultaneously!) to build a sustainable Industry 4.0 and to use Industry 4.0 to build sustainability. In other words, society must: (1) Ensure to the widest extent possible sustainability and circular economy as a feature in the ecosystem of Industry 4.0-enabling technologies, (2) Explore and exploit the enabling potential of Industry 4.0 for building more sustainable business models and production systems. These challenges are illustrated in figure 2.


Figure 2. Circular Economy for Industry 4.0 and Industry 4.0 for Circular Economy.

A new research agenda for Finland?

Finland is well poised to be an international leader in the bridging of Industry 4.0 and Circular Economy. Finland is already among the global drivers of Circular Economy. It is a stated objective of the current government to make Finland a “forerunner in the circular economy by 2025”. In addition, Finland is one of the most digitalised countries of the world, and a world-leader in many areas related to Industry 4.0. Our current project – Manufacturing 4.0 – aims at translating this into a success story for the general manufacturing industry of Finland.

It would seem natural then that Finland should also take the lead in bridging Industry 4.0 with Circular Economy. This could secure long-term competitive advantages for Finnish industry and simultaneously improve the local and global environment.

This new research agenda of bridging Industry 4.0 with Circular Economy would not start from scratch, but as the recent literature shows, there are still many research areas to explore. For us, a new research agenda could for example further address some of these key questions:

The countries, which are able to integrate Industry 4.0 approach to the principles of the Circular Economy, are the probably forerunners of Industry 4.0 revolution. However, as we can see above, the list of challenges in Industry 4.0 transformation is not short.  We know also that many economic activities in many countries are stuck in Industry 1.0-3.0 phases. This means that the Industry 4.0 approach with the Circular Economy approach does not solve all the sustainability problems of globalized world economy. However, remaining to Industry 1.0-3.0 models can also be a highly risky “project” for the long-run sustainability of world economy. Greener economic structures can be developed with Industry 4.0 technologies. We know that Industry 1.0-3.0 stages of development have not yet led us to needed sustainability levels, because climate change and other environmental problems are still far from solved.

In Fig 3 we present a scenario roadmap of Industry 4.0 and circular economy development. This scenario roadmap shows that in the process of Industry 4.0 development, it is not enough to change Industry 4.0 structures to meet the deep requirements of circular economy.

Figure 3. Scenario roadmap of Industry 4.0 and the Circular Economy.

Previous old phases of Industry 1.0, Industry 2.0 and Industry 3.0 require attention concerning the adoption of environmental principles of the Circular Economy. We underline that preconditions of Industry 1.0-3.0 are really pre-conditions for Industry 4.0, but also that the simultaneous transformation towards Industry 4.0 and Circular Economy requires both attention and multiple testing phases. From this perspective we can say: “Let´s try it – let´s pilot it”.

References

Mikkel Stein Knudsen
Project Researcher, Finland Futures Research Centre, Turku School of Economics, University of Turku

Jari Kaivo-oja
Research Director, Adjunct Professor, Dr, Finland Futures Research Centre, Turku School of Economics, University of Turku

Note: Authors thank for Try Out! and Manufacturing 4.0 projects for financial support.

 

Picture: pixabay.com

 

Are we in the midst of a fourth industrial revolution? New Industry 4.0 insights from future technology analysis professionals

Kommentoi

Mikkel Stein Knudsen and Jari Kaivo-oja:

The recent July 2018-issue of the highly influential futures studies journal Technological Forecasting & Social Change contained a special section dedicated to Industry 4.0. The issue is relevant to an increased understanding of the current trends and transformations of the manufacturing sector. Finland Futures Research Centre works with this theme in the project Manufacturing 4.0 supported by Academy of Finland’s Strategic Research Council. Discussion about Industry 4.0 is part of larger technological transformation process (Kaivo-oja et al. 2017). “Industry 4.0” was first coined at the Hannover Fair in 2011, seven years ago. All over the world, the term “Industry 4.0” has drawn great public attention from practitioners, academics, government officials and politicians. Some scientist as Reischauer (2018) see Industry 4.0 as policy-driven discourse to institutionalise particular innovation systems in manufacturing.

For use in the MFG4.0-project, and due to its general relevance, this blog post contains a summarizing review of the TFSC-special issue combined with other recent research on Industry 4.0. We hope this blog will be informative both to those already working with these themes and to those curious about the field. Awareness about Industry 4.0-strategy is an important development driver for both progressive SMEs and large corporations. Discussion in the TFSC Special Issues of Industry 4.0 underlines the idea that Industry 4.0 challenges do not hit only large corporations, and that the role of progressive SMEs and start-ups needs more scientific attention in the global Industry 4.0-process. Orchestration of innovation eco-systems requires broad networks and new dynamic capabilities in organizations.

Compared to previous Industry 1.0-3.0 revolutions Industry 4.0 revolution will include a novel and global dynamic element: The BRICS-countries will be now more active players in Industry 4.0 transformations than these countries were in previous industrial transformations. Especially the role of China in Industry 4.0-era will be a big political and economic issue (see Kaivo-oja & Lauraeus 2017a, 2017b). Industry 1.0 phase was founded on mechanisation, Industry 2.0 phase was based on electricity and Industry 3.0 phase was founded on information technology (IT) to human manufacturing. New Industry 4.0 era is expected to be founded on Cyber-Physical Systems (CPS) and the Internet of Things (IOT). Other key technologies are Cloud computing, Big Data analytics and Extended ICT.

The expected changes will lead to new integrated systems, where sensors, actuators, machines, robots, conveyors, etc. are connected to and exchange information automatically. Factories are expected to become conscious and intelligent enough to predict and maintain the machines and control the production process. Business models of Industry 4.0 imply complete communication network(s) between various companies, factories, suppliers, logistics, resources and customers. This kind of highly integrated and transparent industrial approach probably allows more efficient circular economy in the future (see de Sousa Jabbor 2018).

Both smart production and smart consumption are key benefits of Industry 4.0 approach. Industry 4.0 includes a new research agenda for sustainable business models, business model innovation and re-organization process of old supply chains of companies. Lean Industry 4.0 is expected to be a key challenge for SMEs and corporations. From this technology foresight analysis perspective, the reported technology roadmap in the computer and electronic product manufacturing industry is highly relevant reading for Industry 4.0 policy discussion (Lu & Weng 2018).

The difficult task of defining Industry 4.0

As noted, the term Industry 4.0 was coined in Germany by a government advisory council at the beginning of this decade. This origin does not seem disputed, but otherwise the definition of Industry 4.0 remains up for debate. It is notable, for example, that all articles in the TFSC-special section provide their own slightly different explanations of the term. One article (Sung, 2018) even argues that the inclusion of “4.0” in the umbrella-term refers to the fourth industrial upheaval post-WW2, while others follow the more widely used definition of 4.0 being the fourth industrial age after the age of steam, the age of electricity and the information age (Müller et al., 2018).

While exact definitions differ, common themes in the understanding of Industry 4.0 are easily distinguished. It revolves about new technologies, new digital possibilities, new modes of inter-connectivity etc. Jabbour et al. (2018) captures this by denoting four significant components of Industry 4.0: i. cyber-physical systems, ii. the internet of things, iii. cloud manufacturing, and iv. additive manufacturing. This is very similar to what Xu et al. (2018) recently described as enabling technologies in a comprehensive assessment of Industry 4.0: State of the art and future trends.

Figure 1: ‘Components’ and ‘enabling technologies’ in Industry 4.0.

Adding to the broader understanding of the concept of Industry 4.0, Müller et al. (2018) provide a qualitatively based examination of how key practitioners, representatives of manufacturing SMEs, perceive the term. This pragmatically highlights those elements of particular interest to manufacturing practitioners, and the empirical results reveal three main dimensions of Industry 4.0: (1) High-grade digitization of processes, most notably manufacturing processes, (2) Smart manufacturing through cyber-physical systems resulting in self-controlled production systems, (3) Inter-company connectivity between suppliers and customers within the value chain.

Figure 2: 3 dimensions of Industry 4.0 (adapted from Müller at al., 2018).

We believe these three dimensions would be interesting starting points for creating a refined Maturity Model of organizational Industry 4.0-readiness. This has already been attempted, see e.g. Schumacher et al., 2016, but a new model based on these three empirically backed dimensions might be both simpler and more precise. Müller et al. (2018) do not formalize a new maturity model in their article, but they do provide a four-stage model of manufacturing SMEs ranging from those deliberately not engaged (“we’ve always done things like this”) to full-scale adopters of Industry 4.0 (“we want to be the leader in our industry and can only achieve this through Industry 4.0”). Other identified firm categories were preliminary stage planners (“for us Industry 4.0 us imaginable in the next five to ten years”) and Industry 4.0 users (“more efficient usage of machines while achieving more with less employers”). Motivation level and strategic maturity level to be engaged in Industry 4.0 revolution vary much among German SMEs. Probably, in Finland we could get similar results.

Organizational responses to Industry 4.0

Through their qualitative interviews (with 68 high-level representatives of manufacturing SMEs) Müller et al. (2018) also importantly provides outlines for various strategies for adopting or not adopting elements of Industry 4.0 within business practices. We expect that this theme – identifying and exemplifying organizational Industry 4.0-strategies – will be a key future research topic for business, innovation and organizational research. Finally, the article illustrates dilemmas of smaller suppliers when the value chain become increasingly inter-connected. Increased transparency is not always in the interest of the minor companies, as pointed out by several informants in the study. This view is supported in a recent survey of UK-manufacturers, where, even if 80% of manufacturers believe that new digital technologies will improve the supply chain relationships up and down, several negative responses with fear of “supply chain bullying” can be found (PwC, 2018).

How Industry 4.0-developments affect supply chain relationships and especially affect suppliers might be a particularly pertinent research question in a Finnish context. Three-fourths of Finnish exports are intermediate goods (Ali-Yrkkö, 2017) – a share significantly higher than the EU-average – and changes (positive or negative) to the role of manufacturing supply companies can therefore have effects not only on the individual companies, but perhaps also on the national economy.

Linking Industry 4.0 with the sustainability agenda

Jabbour et al. (2018) examine links between Industry 4.0 and environmentally-sustainable manufacturing. Industry 4.0 and sustainability are argued to be two major trends of, and while they individually cannot be considered revolutionary, together then may “change worldwide production systems forever”. The technological possibilities of Industry 4.0 may help unlock the full potential of environmentally-sustainable manufacturing practices. Whether this will happen, the authors note, depend on eleven distinct critical success factors (CSF) further explained in the article. The CSF’s here are not studied empirically, but they provide research propositions for – as explicitly urged by the authors here – further examination in the synergies between two key societal and manufacturing megatrends. How to best harness these synergies should be of utmost importance to academics, policymakers and practitioners working with sustainable manufacturing and sustainable development, and we will likewise hope that the question of integrating sustainability-dimensions will occupy an important part of the Industry 4.0 research- and implementation agenda. This article together with the highly-cited contribution of Stock & Seliger (2016) provide important background material for this work.

Talkin’ Bout a Revolution?

Like Jabbour et al., Reischauer (2018) and Kim (2018) argue that “Industry 4.0” is not really an industrial revolution. Reischauer argues that, as much as signalling future changes, the particular discourse of “Industry 4.0” serves a policy-driven discourse to institutionalize a distinct now-almost hegemonic idea of innovation systems. Thus, the term itself was developed in the context of a “fluid entanglement of academia, business, and politics”, and the discourse further underpins this entanglement. The discourse hereby both exemplifies and underlines the further need for Triple-Helix Innovation modes (see e.g. Kaivo-oja, 2001, Santonen et al., 2011, Santonen et. al., 2014). It might be illuminating also to see our own MFG4.0 through this critical lens and to remind ourselves that the discourse is neither value- or policy-free.

Kim (2018) puts another critical spin on Industry 4.0. Industry 4.0 is a meso revolution needed by capitalism, because capitalism always needs ever-growing markets, and technology is just one arena for the ever-needed expansion of capitalism. Jumping from this critical view, he goes on to analyse the readiness for this particular meso revolution in South Korea, a topic also explored by Sung (2018). Perhaps surprisingly, both authors conclude that South Korea is a bad position to utilise potential opportunities provided by Industry 4.0. Finland, on the other hand, ranks second only to Singapore in a global competitiveness ranking for the fourth industrial revolution (Sung, 2018). This of course provides some ground for optimism regarding the MFG4.0-project and the general ability of Finland to capture new opportunities and benefits.

Morphological analysis for the future Industry 4.0 transformations

The Special Issue of TFSC also includes also an important methodological paper of Kwon et al. (2018). As we know the generation of new and creative ideas is vital to stimulating innovation, and morphological analysis is one appropriate innovation management method given its objective, impersonal, and systematic nature. In the Big Data-era, we can develop Industry 4.0 strategy on the basis of Big Data files, and the systematic structuring of data becomes vital for success. This methodological case study in the TFSC Special Issue focuses on Wikipedia’s case-specific characteristics using the online database for the development of morphological matrix, which incorporates the data on table of contents, hyperlinks, and categories. This provides interesting results. The feasibility is demonstrated through a case study of drone technology, and the validity and effectiveness was shown based on a comparative analysis with a conventional discussion-based approach. This methodological paper is a milestone study and requires our full scientific attention.

Japanese Industry 4.0 strategy?

Also in the Special Issue, Luo and Triulzi (2018) provide interesting insights about Japanese approach to Industry 4.0. They point out that the architecture of a firm’s network of transactions in its surrounding business ecosystem may affect its innovation performance.  A business ecosystem as a transaction network among firms has been a key issue for successful industrial cooperation in Japan.

The empirical results of Japanese study indicate that a firm’s participation in inter-firm transaction cycles, instead of sequential transactional relationships, is positively and significantly associated with its innovation performance for vertically integrated firms. Within cycles, vertically integrated firms have better innovation performances than vertically specialized firms. Vertically integrated firms that participate in cycles have the best innovation performances in the Japanese electronics sector. This empirical finding can be very relevant also for European firms and companies. The authors also underline that the organizations focusing on quality improvements and production efficiency improvements can be different organizations. Specialization in these fields may be a critical success factor in a national Industry 4.0 strategy. Only in few special cases, organizations are able to integrate these critical industrial functions in one unified organization. We can conclude that Industry 4.0 transformations need more discussions about Japanese historical Industry 1.0-4.0 know-how.

Industry 4.0 in Finland

Discussion about Industry 4.0 will surely continue. Manufacturing 4.0 consortium will contribute to this discussion in various ways and via various channels.

In April 2018, the Manufacturing 4.0 consortium provided the first ‘situation report’ for the Strategic Research Council. The report is (in Finnish).

Link to references

Mikkel Stein Knudsen
Project Researcher, Finland Futures Research Centre, Turku School of Economics, University of Turku

Jari Kaivo-oja
Research Director, Adjunct Professor, Dr, Finland Futures Research Centre, Turku School of Economics, University of Turku

 

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