How automation changes management strategy

Rekha Sethi | Updated on January 10, 2020 Published on January 10, 2020

In the age of Industry 4.0, management practices must be revamped in order to direct technologies, instead of getting directed by them

Business strategy is being revolutionised by advances in automation technologies and management must follow. Management beliefs and practices must evolve with the new ways of production, distribution and consumption. Businesses are beginning to accept the inevitability of tech-enabled processes and tech-determined choices.

Industry 4.0 is about autonomy of machines. Advances in sensors, communication, computation, robotics, GPS etc have created possibilities of infusing machines with intelligence to automate both work and management. Machines are already collecting and sorting information, and management mostly involves dealing with people and making decisions. As Industry 4.0 evolves, a lot of decision-making will also be transferred to machines. But, it is not clear yet how machines will share ethical and legal responsibility for their actions.

Management in the age of Industry 4.0 is about trusting the judgment of machines. Digital technologies deliver instant data and management responses must be automated to keep pace with the frenetic action. Managers have to learn quickly and retrain machines for new variables and priorities all the time.

Production management must be updated as adaptable lines become the norm. Workers and robots, aided with sensors and scanners, make assembly stations flexible and each line can assemble products with different features. Production managers must reorient themselves as the workers are less involved in production and more in supervising the machines.

Support and maintenance management is also getting more automated. Engineering companies are developing ‘digital twins’ of their machines. This allows the producer to monitor the use of the product or installation, fix bugs and upgrade its features through software downloads. Usage and performance data allows the producer or seller to pre-empt breakdowns and service machines when needed. It also aids in further research and development.

Moreover, it changes the business model from making products to selling products as service.

Industry 4.0 technologies are revolutionising the supply-chain management. With each product tagged with sensors for identification and location, the need for maintaining inventory is disappearing. Each item can be shipped on demand because of live tracking of production or sales. Printed or additive manufacturing technology is developing, and will make economy of scale redundant as distributed production will become viable for products that currently require a long supply chain. Procurement and logistics management is set to undergo a transformation.

Marketing and sales management is getting revolutionised by technology. Store shelves and aisles can be equipped with cameras, sensors, augmented reality screens, learning algorithms, face recognition, communicating bots etc. to monitor and promote sales of brands and variants. Management can track which items are selling faster, and which have few takers. The process of billing and payment can be done as customers select the item, for purchase and that will increase stores’ capacity for footfalls while improving customer experience. Repeat customers can be identified and offered targeted suggestions and incentives. Screens in the store can not only display product information, but also demonstrate the fit or placement for better understanding.

The biggest impact of Industry 4.0 is on HR management. Typically, businesses treat automation technologies as a means to cut costs by reducing workforce. However, the more autonomous machines get, the more valuable intelligent people who can supervise become. Managing a workforce of people and machines requires new tools. HR must reimagine the organisation and create new roles and responsibilities.

The transition to a digital future requires HR not to chop headcount, but to bring the existing workforce up to speed. Employees must be taught to train machines and collaborate with algorithms. Seeing-hearing-speaking robots will be more colleagues of people than just tools.

Today, management is lagging technology and the ongoing disruption is merely a reflection of that. Management thinking and practice require a lot of catching up in order to direct technologies instead of getting directed by them.

The writer is Director-General, AIMA

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Published on January 10, 2020
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