INDUSTRY 4.0
Empowered People Report
2
sap.com
EMPOWERED PEOPLE REPORT
INTRODUCTION
Empowered People Empowering a business’ most valuable asset, people, is critical to success in Industry 4.0
N
o amount of automation, AI or ML will supplant the ingenuity of the human mind. From the C-suite to the shop floor, people will always be central to any organisation. Better informed people make better business decisions, and by breaking down barriers, companies can achieve more. Empowered People is one of the four pillars of SAP’s Industry 4.0 initiative, alongside Intelligent Factories, Intelligent Products and Intelligent Assets. Andy Hancock, Global Vice President, Centre of Excellence at SAP Digital Supply Chain, says: “We're never going to replace the people, or take the human out of the process. But the key thing is, if we can automate predictable tasks and mitigate risk through technology, those highly skilled workers can move to high value, complex decision-making tasks that are further up that chain.” Here he explores how empowering people comes to life in an organisation, how each individual can achieve more and, ultimately, how businesses can remain competitive and innovative in the era of Industry 4.0.
We're never going to replace the people, or take the human out of the process
Accessing Industry 4.0 data remains a major challenge for employees. Company executives believe only
50%
of manufacturers currently provide access to all who need it 3
Source: MPI Group
sap.com
SAP INDUSTRY 4.0
EXECUTIVE INTERVIEW
Empowering people, improving business Andy Hancock, Global Vice President, Centre of Excellence at SAP Digital Supply Chain on empowering people for better business
B
ehind the platforms, IoT sensors and connected assets in digital transformation sits the humble human, without which the entire system comes to a crashing halt. Employees can be a business’ most valuable asset, but they can also be the most costly if left behind in the revolution of Industry 4.0. Ultimately the goal should be to elevate an individual’s role within an organisation, remove dead weight from their desk and aid them in reaching their full potential. “The people will always be the centre,” says Andy Hancock, Global Vice President, Centre of Excellence at SAP Digital Supply Chain. “It doesn't matter how much automation that you adopt or how much you increase AI integration, there will always be tasks 4
sap.com
ANDY HANCOCK
that only a human can actually execute on. In fact, as we do more automation, there’s an even higher complexity of decision-making required that only a human can do.” SAP envisions a reality of Empowered People as a critical pillar in its approach to Industry 4.0. “What we mean by Empowered People is empowering individuals to be agile in the moment,” Hancock says. “The whole concept and ethos surrounds organising data, whether that comes internally or externally, to make it insightful and, most importantly, actionable.” BREAKING DOWN BARRIERS A real world example that made headlines earlier this year is the Suez Canal crisis. In the operation to rescue the Ever Given container ship wedged across the narrow channel, hundreds
SAP: WHITE PAPER
of experts worked in collaboration. Excavators worked around the clock to dig the bulbous bow of the container ship out of the sand. Dredgers were called upon, who understood the crosssectional area of the Suez canal, and exactly where to dig to help refloat the vessel. And there were the pilots on board who understood that an approaching high tide would give an extra two metres of lift. In essence, this was a microcosm of modern business, where siloed departments use their expertise to help a business reach its objectives. “What happened in the Suez is that these dredgers, excavators, tug boats and pilots all pooled their information together and realised that they can actually refloat this ship in five days and let it sail,” Hancock says. "Go back 20 or even 10 years and this information would have been in people’s heads, in different places, and instead the situation would’ve taken weeks and required the costly job of removing containers. That’s a good illustration of where Industry 4.0
What we mean by Empowered People is empowering individuals to be agile in the moment
brings all of these technology enablers to empower people to make those informed decisions.” EMPOWERING THE WORKPLACE In less extraordinary circumstances, Empowered People is realised through a layering of information that filters throughout an organisation. “Start with the operator who has maybe one or two pieces of equipment to run. To empower that operator to do his job efficiently, he needs to know if it’s running correctly, if it’s going out of bounds, does he need an indicator to do something in order to avoid a failure? That’s the basic level,” Hancock says. “We then lift it up to the next layer, moving from operational execution to areas of financial core values. The plant manager can collate the information from each of the production lines, assess the KPI, form a plan, and measure that against their actuals.” sap.com
5
SAP INDUSTRY 4.0
Andy Hancock from SAP talks about Industry 4.0
Beyond the four walls of the siloed plant, SAP enables businesses to stack further data from external suppliers, their wider network and begin to derive true value. In the boardroom, executive
Where this empowerment truly comes into effect is in the time it takes to make decisions and implement them 6
sap.com
leadership, now fully informed by this aggregated data, are able to deliver to their shareholders. “The CEO or CFO have their core values that they need to meet, whether that’s sustainability goals, P&L, or something else,” Hancock says. "Where this empowerment truly comes into effect is in the time it takes to make decisions and implement them. We can now actually bring the data all the way down the individual steps to the operator, because it's all connected. Decisions made at the top can be actioned incredibly fast throughout the business. That's a very simple example, but it shows how this layered approach works in a lot of our businesses that we see.”
EMPOWERED PEOPLE REPORT
Empowered People are the culmination of SAP’s Industry 4.0 strategy, and a company value that it wears on its sleeve. "The key thing when we talk about industry 4.0, is that SAP cannot do it on its own,” Hancock says. "We need our partner ecosystem, hardware vendors and integrators, and consultancies to understand these big shifts like digital transformation. And we also contribute to those discussions.
It doesn't matter how much automation that you adopt […] there will always be tasks that only a human can actually execute on
ANDY HANCOCK TITLE: GLOBAL VICE PRESIDENT, CENTRE OF EXCELLENCE Andy Hancock is a Global Vice President of the Center of Excellence, SAP Digital Supply Chain. Using his background in Human Computer Interaction, Enterprise Mobility and Industry Expertise, Andy merges a strong technical foundation, a passion for solving problems and real world situations he has encountered during his 14 years tenure at SAP to fulfill his role as trusted advisor for leading global brands. He understands how to quickly undercover the root of the problem and articulate a clear path to the right business outcome. Having worked in more than 40 countries and experienced a vast array of cultures he knows the importance of operating efficiently at the point of performance and put simply, getting the Right Information at the Right Time to make that informed decision.
“The first step is always the hardest in any project. It requires an amount of energy that some organisations may start but never finish and continually transform. And so what SAP has done is to make the entry point very low, so businesses can come and see the best course of action in our industry hubs. We have SAP services to support the maturity assessment, the evaluation of where they are on that journey. And then we have our partner ecosystem to help them move in the right direction.” sap.com
7
SAP INDUSTRY 4.0
EMPOWERED PEOPLE BY THE NUMBERS
74%
of EMEA industrial product leaders believe training and developing their workforce with new skills is a priority for Industry 4.0 realisation Source: Deloitte
People are at the core of Industry 4.0 initiatives, with three quarters of organisations saying training and development of their workforce is a priority, and 28% focusing on attracting and retain talent Source: Deloitte
Demand for physical and manual skills in repeatable, predictable tasks is expected to shrink by nearly 30% over the next decade…
Industry 4.0 is expected to increase employment prospects for workers with IT skills, 50% of automakers report…
…25%
Source: BCG
expect to need more employees with logistics and planning expertise to derive true value from the insights provided by Industry 4.0 strategies
…Demand for technological skills, and acumen in interacting with technology is predicted to grow by more than
50%
Greater automation and digitalisation also worries workforces. Cultural adaptation and acceptance of Industry 4.0 is a challenge for
27%
of manufacturers…
…Meanwhile around
sap.com
a fifth
of manufacturers struggle with redefining the roles of their employees Source: MPI Group
8
Source: McKinsey
EMPOWERED PEOPLE REPORT
Impact of Industry 4.0 in next five years 1% 1%
29%
On Industry
69%
2% 3% On their business
30%
65%
by percentage of manufacturers
No impact
Limited impact
Some impact
Significant impact
10 biggest challenges with Industry 4.0 adoption
47%
Identifying opportunities/benefits of Industry 4.0
45%
Adapting existing technologies
38%
Security of corporate devices, network, and data
37%
Network capabilities to handle Industry 4.0 Incorporating smart devices/ embedded intelligence
35%
Necessary skills/talent to leverage data/intelligence
35% 32%
Network capacity to handle Industry 4.0 Leadership support for Industry 4.0
27%
Cultural adaptation/acceptance of Industry 4.0
27%
Changing business processes and workflows to accommodate Industry 4.0
26% by percentage of manufacturers
Source: MPI Group
sap.com
9
SPONSORED BY:
sap.com
POWERED BY: