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GE’s Immelt is Right: Manufacturing 4.0 “Infects” Everything

Posted By Paul Tate, October 20, 2015 at 11:23 AM, in Category: The Innovation Enterprise

Networking.jpgAs GE CEO and 2015 Manufacturing Leader of the Year award-winner Jeff Immelt commented in a recent two-part interview with Mckinsey; “Industrial companies are [now] in the information business - whether they want to be or not.”

He makes a good point. The introduction of pervasive, intelligent new technologies and sensor networks, both on the plant floor and embedded into increasingly smarter products; the end-to-end digitization of industrial processes; and the need for businesses to focus on analyzing all the data these game-changing cyber-physical systems bring will indeed transform the very nature of industrial companies in the years ahead.

“We want to treat analytics like it’s as core to the company over the next 20 years, as material science has been over the past 50 years,” he continued. “So, in order to do that, we have to add technology, we have to add people, we have to change our business models.”

GE’s ambition to fully embrace the potential of the new era of Manufacturing 4.0 and Smart Manufacturing is clear. But as Immelt notes, getting there is not going to be as simple as some may assume.

“I thought it was all about technology. I thought if we hired a couple thousand technology people, if we upgraded our software, things like that, that was it. I was wrong. Product managers have to be different; salespeople have to be different; on-site support has to be different. We’ve had to drill and change a lot about the company. And I just think it’s infecting everything we do. It’s infecting our own IT. It’s infecting our own manufacturing plants. It’s infected everything we’re doing.”

He’s not the only one who’s beginning to realize that the migration to the new world of Manufacturing 4.0 will need far more holistic thinking, leadership courage, and innovative approaches among executive team leaders if they’re going to successfully move their businesses into the new era and thrive.

This recognition was also top of mind when members of the Manufacturing Leadership Council gathered together at the annual Manufacturing Leadership Summit in June this year to identify the most important challenges for manufacturing in the years ahead. The Council’s resulting Critical Issues Agenda now focuses on six key factors along The Journey to Manufacturing 4.0 – from what Manufacturing 4.0 factories will look like in the future and how to reach that future state, to attracting and developing the new leadership and workforce skills companies will need to drive this radical, digital change.

And it’s no wonder all these senior executives are becoming increasingly concerned about the M4.0 journey. The results of our recent research project on Next-Generation Leadership, “Wanted: A Leadership Playbook for Manufacturing 4.0”, revealed that a massive 90% of all respondents believe the emergence of the Manufacturing 4.0 era of cyber-physical systems, digitization, and information-driven factories will require a substantially different approach and set of skills on the part of manufacturing leaders.

Perhaps more worrying, however, is that over 50% also said that their company’s overall success is now “very” or “moderately vulnerable” as a direct result of current deficiencies in their leadership ranks and their ability to embrace the new era of M4.0.

So how can manufacturing companies get from here to there? As with any journey, it depends on your starting point, so an organization’s roadmap to the future is likely to be different for companies in different industry sectors, of different sizes, with different legacy technology infrastructures, and with different leadership ambitions. 

From a technology perspective, a new report from IDC on Worldwide Smart Manufacturing Technologies 2015 suggests that one way companies can start to move forward and get a grip on their M.40 roadmap is to focus on four key technology areas: Data Acquisition - the capturing of information from sensor-rich plant floors, RFID or human-operated devices, all the way to wearable technologies and smart products out in the field; Connectivity – covering the Industrial Internet, wireless, cloud, and security systems; Analytics – covering everything from machine learning to manufacturing intelligence and collaboration tools; and Actuation – looking at new forms of automation such as advanced robotics and 3D printing.

But as Immelt noted earlier, that’s only the start. Manufacturing 4.0 is not just about technology. Making Manufacturing 4.0 happen will require a radical change of corporate attitude, a change of the skills mix, a change of working culture, a change of how you manage, monitor and grow almost every aspect in the business – from production to new data-rich services.

For example, Immelt reveals that he now considers GE’s old-style historical organization chart, with lots of processes, as a thing of the past. “We’ve basically unplugged anything that was annual. The notion is that, in the digital age, sitting down once a year to do anything is weird. It’s just bizarre. So whether it’s doing business reviews or strategic planning, it’s [now done] in a much more continuous way.”

Clearly, the move to Manufacturing 4.0 is not simply a matter of identifying a future destination. Besides, that will constantly change as ever-more disruptive new technologies and business models emerge. It’s really about manufacturing leaders accepting the fact that starting the journey towards a more digital, information-rich future is now essential. Manufacturing 4.0 will be a continuous activity; a continuing conversation. And it's one conversation you can’t afford to miss. 

Adds Immelt: “I would say to any CEO, industrial or nonindustrial, that where we are right now is going to be the most important thing that you’re going to work on, at least in this era.”

 Find Out More About the Journey to Manufacturing 4.0

MLC In Europe: European manufacturing leaders are invited to join Industry 4.0 pioneer Prof. Dr. Detlef Zühlke and the Manufacturing Leadership Council for a special leadership panel on “Manufacturing 4.0 In Action” to hear how leading European companies are bringing Manufacturing 4.0 strategies to life. SPS Drives show, Nuremberg, November 25. Find out more and register here.

Save the Date! “Manufacturing 4.0: The New rules of Leadership” will be the theme of our 12th thought-leading Manufacturing Leadership Summit, June 6-9, 2016, Carlsbad, CA. Find out more and watch for speaker details here.

Share Your Views: Join the Manufacturing Leadership Research Panel and get advance insights into six exclusive Manufacturing 4.0 research projects a year. Next survey: Manufacturing 4.0 and Factories of the Future.  Join the ML Research Panel here.


Written by Paul Tate

Paul Tate is Research Director and Executive Editor with Frost & Sullivan's Manufacturing Leadership Council. He also directs the Manufacturing Leadership Council's Board of Governors, the Council's annual Critical Issues Agenda, and the Manufacturing Leadership Research Panel. Follow us on Twitter: @MfgExecutive

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