When does a component become a system, and when does a system become a solution?

06 November 2015

What has been coined as Industry 4.0 is transforming the manufacturing industry. Driven by digital innovation, it’s not just the way products are being made that’s changing. It’s how they’re being used. As engineering and technology become increasingly indivisible, the emphasis is on developing connected components that come together in new systems to deliver innovative solutions.

Over the past few months, I’ve been hearing more and more companies talk about the need for this connectivity. And it’s not necessarily a requirement they’re comfortable with. Manufacturing a highly engineered bespoke component is hard enough on its own, they argue, without having to integrate complex software and systems design or complex interfaces and connections.

That’s a fair point. But as manufacturing becomes increasingly more digital, the ability to design, develop and service systems rather than simply components is a must-have. The good news is that aside from the (daunting) technical issues involved, it’s no great leap in mindset from what companies have always done. Ask any manufacturing executive what motivates them and makes the job worthwhile, and they’ll tell you it’s solving a customer’s problem and providing an ever increasing share of the end product, whether that be an aircraft or a smartphone.

Where it gets more challenging, however, is their ability to recruit a new breed of young talent that they’ll need to delivered these integrated solutions.  It’s no secret that the manufacturing sector faces a big skills gap. Every single type of engineering talent is in short supply, from mechanical to software, civil to electrical. It’s a multifaceted dilemma. Part of it links to a lack of coordination between employers and higher education (although that’s definitely improving) and part relates to the ever increasing level of competition for this talent from tech companies from across the globe.

There’s also a major image problem. Young people still don't find manufacturing as compelling a place to spend their career as some of the alternative industries. So what’s the solution? Although there’s no quick fix, companies throughout the manufacturing industry need to start inspiring potential recruits by clearly demonstrating how their products produce data, connect and communicate within systems that themselves become real-world solutions. If they can shift the emphasis onto the full spectrum of what they produce and where their products actually fit into the bigger picture, then that should make them much more attractive as employers.

Right now, manufacturers are struggling to identify and attract the product design talent they need to keep on growing. And they’re struggling to attract the technology talent they need to build connectivity into their components. PwC’s CEO Survey puts this into perspective. Seventy-three percent of CEOs are concerned by the availability of skills (up 10 percent on 2014) – particularly so amongst hi-tech innovators and hybrid workers who can bring an understanding of their own industry sector, and complex digital technology as well.

If it’s difficult to start designing and making components that can fit into systems that are already out there, it’s even harder to equip them to keep pace with technologies that are evolving so rapidly. For every multinational with its own virtual factory, there are hundreds and thousands of SME manufacturers for whom these capabilities remain unattainable. So how are they ever going to change their business?

I believe it comes back to talent. All manufacturers, large and small, should be focused on ensuring that the talent they’re trying to attract has the breadth of curiosity that’s going to be needed to want to follow this evolution through, along with a real understanding of systems – and how they coalesce to become solutions.

Cara Haffey | Partner, UK Industrial Manufacturing leader
Profile | Email | +44 (0)14 1355 4125


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