Time for a “virtual reality check”: why manufacturers need to catch the startup mindset – and be ready to fail fast to get ahead of the curve

13 May 2016

Recently, our colleagues in the US surveyed 120 US manufacturers for their Disruptive Manufacturing Innovations Survey, sounding out their views on augmented reality (AR) and virtual reality (VR) technologies. As the chart shows, their responses were informative to say the least. Only one-third said their businesses had no plans to adopt virtual reality tools. However, although 12.5% said they’re doing it already, the majority in the middle are still at various stages of readying their plans.

Q: How would you characterize your company’s use of any type of virtual reality technology?

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In our view, planning and thinking about virtual reality is no longer enough. But, more positively, the findings do suggest that mindsets in the US are starting to progress from evaluation to action – and our own daily conversations with manufacturing clients in the UK show the same is happening here. Given manufacturers’ engrained – and understandable – reputation for conservativism towards emerging technologies, we think that’s pretty significant. In fact, it seems to be part of a wider shift in attitude and approach, as VR and AR come of age and promise to reinvent the factory floor.

So, how are mindsets changing? Traditionally, the concept of learning through constant experimentation, and being ready to “fail fast” before moving on to the next idea, has tended to be associated with technology start-ups rather than manufacturing companies. But VR/AR technology is just one of several playing a part in what we call "Industry 4.0". And so great is the potential of VR and AR, and so profound their implications for manufacturing processes, productivity and ways of working, that we’re now seeing manufacturers starting to catch the fail-fast bug.

It’s a change that we welcome. Why? Because as the momentum behind VR and AR builds, any manufacturer who hangs back to see whether these technologies actually take off is risking being left behind. And given the pace at which some manufacturers are now learning about and capitalising on these technologies, clawing back the lost ground may prove very difficult.

In our experience, scoping out the opportunities presented by AR and VR in manufacturing is a three-step process. The first is to define what the terms mean in terms of technology and employee experience. The second is to work out how they can be applied to generate real benefits in the business. And the third is to decide whether those benefits are sufficient to justify investing in the technologies themselves.

Looking first at definitions, “reality” is clearly what we see and experience all around us. “Augmented reality” is the next stage in technology terms. This is where you’re still in the real world but with an overlay of information that enhances it or enables you to perform tasks better, perhaps by providing directions to a location, or instructions for how to use a piece of equipment.

To date, the most high-profile manifestation of augmented reality was the original Google Glass, now discontinued because it was unfashionable, expensive (at about US$1,500) and had a battery life of only two to three hours – and because people were daunted by having its camera pointing at them. But Google Glass II will come, addressing such issues. And augmented reality is continuing to make strides, including a joint pilot in a warehouse in the Netherlands by DHL and Ricoh, using smart glasses to enable workers to scan barcodes while keeping their hands free for associated tasks such as checklists.

Beyond AR is “virtual reality”, a further step away from the real world, where you’re immersed in a totally different environment usually by wearing a head-mounted device. A host of major players – the likes of Facebook with Oculus Rift, HTC with Vive, and Samsung with Gear VR – have launched VR headsets. A further variant of VR is the cave automatic virtual environment (better known as CAVE) where projectors are directed onto the walls of a room-sized cube.

Again, industrial applications are under way and gaining traction. Among the most effective are using VR for training, enabling people to learn how to use equipment in a hands-on, standardised way without the time and expense of being physically located with it. And among leading manufacturers, Ford is using VR to enable employees to walk around and inspect car designs that haven’t yet been built, while BAE Systems uses it in submarine construction.

So, where is all this leading? Well, the question is often posed of how long it will take AR and VR to take off in manufacturing. But in our view that question misses the point. These technologies are at a tipping-point. And the real issue is how quickly manufacturers can identify opportunities to use them to do things better, faster and/or cheaper – and then how fast they can move to exploit these opportunities. 

To do this effectively will require three things. One is bold management that both understands the opportunities and appreciates the need to explore them. The second is a willingness to forge collaborative alliances and partnerships between manufacturers and AR/VR technology companies. The third – as we highlighted earlier – is a readiness to fail fast. For those manufacturers that hang off now, the risk is that they may fail more slowly. Perhaps, in some cases, irreversibly.

Jeremy Dalton | Emerging & Digital Technologies expert
Email | +44 (0)20 7804 0608

Mark Crawford | Director, Operations consulting
Email | Tel: +44(0)20 721 23555

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