Blog: The fourth industrial revolution and inertia

The fourth industrial revolution and inertia

The fourth industrial revolution and inertia

Rizwan Janjua, Head, Technology, worldsteel

23 June 2017

I attended Future Steel Forum 2017 in Warsaw, Poland last week, where I talked about a key issue for our industry - ‘The Digital Revolution - The Human Factor and Inertia’. We are essentially creatures of habit and the same applies to organisations. Why modify what has always worked?

This is Inertia in a nutshell, a tendency to do nothing or to let things remain unchanged. This typically makes sense, and helps to maintain a sense of order and normality – being cautious can be sensible, as discovered during the 90’s dot com bubble. But such thinking can also lead to complacency and missed opportunities. If we choose to stand still during a period of dramatic change, we may be able hold firm for a while but eventually we may find ourselves left behind.

We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run.  — Roy Amara, Institute for the Future (IFTF)

We are in the midst of the Fourth Industrial Revolution, with a myriad of powerful and affordable new software and hardware tools on offer. Buzzwords such as Industry 4.0, IoT, Smart Manufacturing and so forth that can be confusing, but if applied skilfully, they can deliver greater productivity, increased efficiency and substantive innovations that were previously out of reach.  

As an industry we cannot afford to dismiss this imminent paradigm change and must embrace the array of new technologies available not simply because they are there but because they will be a key driver of competitive advantage. Whether to meet the need to continue to reduce C02 emissions or the demand for building the smart cities of the future - what is required is the adoption of a new mind-set, one that sees industry 4.0 as a facilitator in developing a continual process of improvement, rather than a one-step solution.

A company’s successful entry into this new landscape will depend upon its ability to overcome inertia and whether they have:

  • A culture of product, process innovation and value creation
  • A welcoming approach to new ideas and a willingness to develop them further into products and services
  • A clear innovation strategy which is well understood by all staff

During our recent Technology Committee meeting (TECO), a number of steel companies noted how they have either already started integrating digitisation, or hold plans to introduce significant initiatives over the next two years. Early adopters who manage this change effectively are likely to gain a clear competitive advantage from being able to deliver value-added products and services while making more efficient use of raw materials and energy.

The ongoing digital revolution presents numerous opportunities for the steel industry but we must strike while the iron is hot. What do you see as the biggest push and pull factors on our industry in embracing the digital era?

Add your comment here:

  • 1

    Hi, Thanks for informative and useful text but there is a big question for those companies who have not changed their technologies based on market and geographical circumstances. They have their own markets and especially from labour point of view when there is surplus on work force in the region and you should keep all employee, how could we match these together as one of the important results of technology innovation is decreasing work forces.

    avatarMehran AbbaszadehJun 27, 2017 8:44:20 PMReply

  • 2

    Thanks for your comment, Mehran. I am glad you found it informative. The pace of technological transformation is different in the advanced, developing and economies in transition as you pointed out. It is a paradigm shift that does not aim at reducing jobs; rather enabling the work force to do higher skilled work. Remember, the previous industrial revolutions improved working conditions and created a multitude of new jobs.

    avatarRizwan JanjuaJul 3, 2017 3:24:07 PMReply

  • 3

    Hi Rizwan, interesting text and good presentation. You described that we are in the midst of the Fourth Industrial Revolution, with a myriad of powerful and affordable new software and hardware tools on offer. On the other hand we see that a lot of companies are not yet ready to adopt these innovations and you mentioned some points on which their success in the new landscape depends. I'm currently working in a small startup that is bringing a new innovation to the market and I do experience the inertia of especially the larger steel companies. I therefore think that the success and impact of the industry 4.0 revolution also heavily depends on the impact and influence the small innovators can have on the behaviour of the big companies. What is your opinion about this and what are your thoughts on the best plan of attack on making this happen?

    avatarLuuk LinssenJul 4, 2017 5:32:03 PMReply

  • 4

    Hello Luuk, thanks for your question. One of the items I highlighted in my presentation is the departure from mass production to “mass customization”. This requires an understanding of the customer process and what your product or solution can deliver. Many new technologies never realise their full potential because the customer is either not fully aware of its capabilities or doesn’t know how to use them effectively. So, technologies in their own right are not what the customers are really look for - it’s the solutions, which means going a few steps further than the sales agreement. In this industrial revolution, data along the value chain will play a pivotal role and those who can transform it into insights will be able to reap the benefits for themselves and deliver a higher level of service to their customers. The success of innovators is not dependent on their scale, but rather what differentiates them and whether they are selling the technology or a solution.

    avatarRizwan JanjuaJul 5, 2017 1:51:26 PMReply

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