Manufacturing companies are rapidly evolving their operations through the adoption and development of new technologies such as AI (Artificial Intelligence), the IoT (Internet of Things), process automation, and data analytics.
Digital solutions can benefit a company in a multitude of ways. By integrating sophisticated methods of digital transformation, productivity, output and efficiency can be dramatically increased. Industry 4.0, regarded as the fourth industrial revolution, is ushering businesses into the world of smart factories, artificial intelligence and automation, which in turn develops a more agile and responsive service to meet customers’ needs.
Although most companies are keen to modernise and keep up with market trends, it is crucial that manufacturers are aware of the challenges that these solutions present, and acknowledge that such transformations are not without legal and ethical implications. Some of those issues which we might expect to arise for businesses include:
1. Data protection and personal privacy challenges
Smart manufacturing systems often operate by accumulating personal information, generating algorithms and preserving data which may contain personal or sensitive information on customers. Although this can benefit manufacturers in terms of forecasting trends more accurately, they must be aware of the dangers of data exchanges, the possibility of data breaches and their obligations under the General Data Protection Regulations and related legislation.
2. Cybersecurity
The ever increasing reliance on technology, software and cloud computing increases the possibility of exploitation by online criminals. Manufacturers must remain up-to-date with best practices in order to protect their organisation and their clients’ data, and also develop and maintain protocols to deal with any cyber threats, hacking incidents and ransomware.
3. Logistical considerations and provision of services
Implementing new technologies can often lead to disruption. Manufacturers should be conscious of entering into agreements for the provision of such services, ensuring that not only the needs of their businesses are met, but also that the technology they are being offered is suitable. Connectivity and compatibility struggles can arise, for instance, when an existing IT infrastructure does not integrate with newer software. Resolving these issues often requires legal assistance that can be both costly and time-consuming.
4. Social responsibility
Manufacturers, whilst developing innovative ways in which to do business, should be mindful of the human consequences of Industry 4.0. Becoming dependent on advanced technologies can have an impact on the working environment, and although the effectiveness of industry 4.0 technologies can enhance customer relationships, the profound effect this will have on employment and the supply chain has to be acknowledged.
Manufacturers will be required to take employment in a new direction, requiring software developers and ‘smart factory workers’ experienced in coordination and oversight of machines, displacing the traditional skilled factory worker. The number of employees required to fulfil traditional roles is also likely to reduce as the reliance on physical human labour reduces.
Whilst acknowledging the challenges, digital transformation does offer manufacturers many opportunities. Statistics have shown that industry 4.0 can offer substantial value, by increasing labour activity and reducing machine downtime, but it will still be important for manufacturers to strike the right balance in their approach to adopting any form of advancing technology and maintaining an engaged, skilled and happy workforce.
There are indeed many benefits to adopting new technologies, processes and smart systems to enhance business activity, however before adopting any new digital solutions, it is advisable that all manufacturing businesses should carry out thorough research and take the necessary legal advice to ensure smooth implementation and prevent any potential issues in advance.
This article has been produced for general information purposes and further advice should be sought from a professional advisor. Please contact our Manufacturing team at Cleaver Fulton Rankin for further advice or information.
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