Is Industry 4.0 the next natural step in manufacturing practices or a threat to manufacturers themselves? The answer changes depending on who is asked, but what seems to be inevitable is the eventual implementation of these practices by global manufacturing companies, according to panelists at Mexico Automotive Summit 2017 who debated the inevitability of Industry 4.0 and what it means for companies and their labor force.
“Mexico has always been considered a low-cost, high-quality labor country,” said Alejandro Salas, Senior Industry Analyst and Journalist of Mexico Automotive Review and moderator of the panel at the Hotel Sheraton Maria Isabel in Mexico City on Thursday. In Mexico, the automotive industry represents 3.1 percent of GDP. The sector has also been praised for introducing new technologies to the country and is now spearheading the introduction of Industry 4.0 practices. “Industry 4.0 is not a revolution but a natural evolution of manufacturing practices,” said Arturo Zavala, National Sales Manager of Carl Zeiss de México. “This trend aims to connect the real world with the digital one, which can be done by measuring and quantifying real-world data. Investing in equipment that performs these measurements faster allows for a better development of more complex pieces and their evaluation.”
In Mexico, major international companies are setting the pace. “OEMS and Tier 1 companies have a high level of technology which they are bringing to Mexico. Some of their plants in the country are among the most advanced in the world,” said Zavala. Raul Meyer, Automotive Industry Partner at EY, agreed, adding that “most innovative technology is developed in Germany and other countries and then adopted by Mexico.” The reason for the implementation of these practices are the many advantages they bring to manufacturers. “Industry 4.0 allows us to create a fully integrated supply chain often with lines fully manned by robots,” said Víctor Fuentes, Director General of Mexico and Latin America at Mitsubishi Electric Automation.
However, these practices are not widespread for many reasons. “The challenge is to expand the use of these technologies to the rest of the supply chain, as companies cannot acquire this pricey equipment, which leads them to lose competitiveness,” said Zavala. Challenges are not just of an economic nature. “The main barrier of access to these technologies for SMEs is a lack of information. It is necessary to actively train the current labor force in the existing technologies,” said Manuel Sordo, General Manager, LATAM of Universal Robots.
These barriers can be overcome. “Governmental support to SMEs can greatly help companies to acquire this technology,” said Sordo. However, local companies can also be convinced to incorporate the technology on their own. “Companies that want to adopt this technology are looking for accessible costs, fast returns on investments and easy implementation in terms of information processing and programming.”
However, Fuentes warned that companies are often reluctant to incorporate these technologies due to other concerns. “Mexico needs to change its vision and be ready to take on the risks of incorporating these technologies. Company owners need to look beyond the price tag and consider how they can do more with less in the long term.”
Another concern, and not just in Mexico, is the fear that the use of these technologies will mean fewer human workers. “This is a challenge for every single country which invests in automation,” said Sordo. This fear is unwarranted, the panelists agreed. “Many feel that Industry 4.0 will lead to the disappearance of 600,000 jobs but it will also create 400,000 new, better paying ones,” added Zavala.
“As with every other type of technology there is a chance that technology will replace workers. But technology also permits the increase in productivity which might lead to the generation of more jobs,” agreed Sordo. Furthermore, he explained that while robots increase the efficiency of the manufacturing chain, they also eliminate the need to put humans in dangerous situations.
Under these circumstances it is necessary for the government and academia to train people to have a technological mindset so they are able to work alongside this technology. “What will be necessary are highly qualified people. With automation, manual workers will be gradually replaced by analysts who are in charge of programming and optimizing the robots,” said Zavala. This is no small challenge. “Education in Mexico is highly deficient. OEMs are unable to find qualified professionals and they have to send them overseas for a year of training. The country needs more educational institutions to begin to drive innovation,” said Meyer.
There is still a wide breach to overcome to fully incorporate these practices. Meyer expects Mexico to fully incorporate these technologies by 2040. “Industry 4.0 is more than an idea, it is a series of practices that are creating the industry of the future,” said Salas.