What defines Industry 4.0 better than anything else? Many specialists claim that its three trademark features are productivity, efficiency, and quality. These drivers are crucial for any business, especially for small and medium businesses (SMEs) that make up more than 60% of all manufacturing companies in Pakistan.
The digital transformation empowers Small and Medium Enterprises to incorporate processes that can produce high quality with large volume but with lower costs. The key technologies that is shaping this digital transformation journey are namely cloud computing, the Industrial Internet of Things (IIoT), Big Data Analytics, 3D Printing and Robotics.
The trend around the globe clearly signifies that smaller companies are now rapidly competing with the larger corporations because they are empowered with low-cost modular tools that allow them to compete at a much rapid pace. The chances are they will overtake the large corporations soon.
It is due to this reason various parts of the developed world are now experiencing a rapid transition to Industry 4.0 . A clear example of this transition is being seen in Belgium where out of 265 companies involved in a “Factory of the Future” program, more than 65% represent the Small and Medium Enterprises. So, how is this “Industry 4.0” beneficial for the SME sector? Here are a few key points.
• Increased Productivity
The arrival of Industry 4.0 will result in increased productivity’s potential for small and medium enterprises alike. By using the Industrial Internet of Things, cloud technology, Big Data, and AI-based analytical systems, Small industries will benefit from getting actionable insights out of their data. This means they will have a predictive approach to all kinds of systems in the factory. They will be able to identify the areas for improvements and minimize waste and improve the yield. Secondly, Quality Management will drastically improve helping the industries make profits but at reduced costs.
• Higher Quality
The digital transformation will empower the industries to introduce massive customization support. In the future, every customer will have the option to get tailored servicing and products as per their own demands and likings. This ability is inherently built into the Industry 4.0 ecosystem. When you will meet and exceed the customer demand it will count as meeting the higher quality demands, thus improving the quality of the SME sector.
• More Revenue
When the customer demands are exceedingly met the quality is improved. This would drive in more demand and as the integrated systems will be able to capture the demand and manage the internal resources through intelligence. The companies will see a drastic improvement in their reveneus.
Challenges To Overcome
The major challenges for the Pakistani SME sector rely on the fact that change cannot happen overnight. Technological literacy is gradually rising and it is only about time when we will see a sudden explosion of the technological workforce in the country. In most recent times we have seen a sudden spike in technology startups as well. However, the only problem is that none of these startups are truly executing the work on the ground.
The Small and Medium-Sized Enterprise (SME) sector is entrenched in an old mindset that is largely focused on meeting the daily order demands rather than focusing on the technological revolutions that could help them reduce costs and improve productivity. That’s the biggest challenge that needs to be overcome now.
In a recent study “Industry 4.0 – Opportunities and Challenges for SMEs in the North Sea Region.” the author has brilliantly highlighted key challenges for the SME sector. These include no clarity about economic benefits; the lack of expertise, business tools, and fully-trained labor; threats through cybersecurity; the lack of finance; and insufficient norms and standards.
The second biggest challenge is taking the first step! These SMEs lack the will and the grit to pursue the transformational process. It is a difficult path and requires dedicated resource at least to carry out the whole transformation process.
However, with the involvement of governments, this transformation process can definitely speed up. The COVID pandemic last year has clearly put emphasis on the importance of sustenance of the SME sector for all developing countries. Pakistan in particular has focused on the sector that has saved it from the economic catastrophe that the other countries are facing due to the pandemic.
Last, data security is another huge challenge that poses a threat to SMEs while adapting to the new technologies.
To Sum Up
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