Maurice Liddell, principal and senior client executive with BDO, examines the results of a survey of manufacturers and their efforts to adopt new technologies in keeping with the age of “Industry 4.0.”

The term “Industry 4.0” describes a continuation of the Industrial Revolution, but with a focus on new technologies that are calculated to realize automation, efficiency and safety, Liddell says. According to BDO’s new survey of manufacturers, progress toward those goals is rapid. Within the next 12 months, 87% of manufacturers expect to have digitized their supply chains, or be in the process of doing so.

“We’re seeing that number go up rather significantly,” Liddell says. As they embrace new technologies, manufacturers are adopting two major focuses: gaining efficiencies in their operations, and adopting more of a customer focus. The latter goal is prompted by “the Amazon effect,” whereby e-commerce customers are demanding virtually instant gratification in product availability and delivery, as well as a high level of technical support. All are areas that are being made possible with automation.                

Liddell relates a story from a few years ago about a supplier to a large computer manufacturer that had its fiber optic communications system damaged by a backhoe. The system automatically rerouted all traffic to a backup cellular network, minimizing any disruption caused by the accident. Manufacturers today are seeking protection against future figurative backhoes, by adopting digital systems that can quickly respond to any situation. The ultimate goal is end-to-end communication with suppliers and customers, ensuring visibility of product throughout the supply chain — what BDO calls “the digital thread.”

Many of the manufacturers that are ahead of the curve in achieving digitization are “born or reborn” in digital — lacking the legacy systems that can hamper progress toward that end.