Ops 4.0—The Human Factor: Why 2020 will be the year of reskilling

In this series, we’ve focused on the human implications of the ongoing, technology-driven transformation of operations. While leaders know that Industry 4.0 will have profound implications for skills, roles and career paths, companies have been slow to develop concrete plans to ensure their future capability needs are met.

Our prediction for 2020: this will be the year when organizations make the decisive shift from thinking about Ops 4.0 capabilities to actively building them. The motivation for action will come from three major trends, which are now making themselves apparent across multiple sectors.

  1. Industry 4.0 is finally starting to scale. After almost a decade of discussion and piloting, companies are now applying new digital operations approaches across entire sites, value chains, and even networks. This summer, the World Economic Forum added ten new “lighthouse” factories to its existing network of fourth industrial revolution leaders. Many of these new examples of digital-manufacturing excellence stand out due to the sheer scale of their achievements. One company has applied digital analytics to improve the reliability and performance of 50,000 machines. Others have built “digital threads” that stretch all the way from upstream suppliers to end customers.
  2. Capability gaps are emerging and growing fast. In operations-intensive sectors, shifts in the specific skills demanded by different industries are accelerating. Work by our colleagues at the McKinsey Global Institute suggests that in the US, around one-third of production roles could change profoundly over the next decade. In ops-intensive sectors, the change will be even greater, estimated at about 50 percent higher than for the economy as a whole. In Indonesia, automation and digital technologies will create more jobs than they displace over the next decade—but demand for highly skilled and educated workers will increase significantly. The story is similar for South Africa, where digitization and automation could result in a net gain of up to 1.2 million jobs by 2030.
  3. Operational capabilities matter even more in turbulent times. The global economy is experiencing high levels of uncertainty as trade tensions, technology shifts, and environmental concerns combine to put businesses under increasing pressure. Our analysis of the winners and losers of earlier downturns shows that operational excellence and accelerated productivity improvement is a key factor in companies’ ability to survive and thrive in difficult economic conditions. Resilient organizations use every lever at their disposal to improve the operations before and during difficult times. In the 2020s, that will increase the need for an Ops 4.0-ready workforce.

In an age of rapid technological change and industry disruptions, organizations need to know how to keep learning—not just today, but on an ongoing basis. Our colleagues have made the case elsewhere for a new C-level role dedicated to reskilling workers. For operations leaders, we think that is going to drive a fundamental shift: alongside a traditional focus on continuous improvement, companies will need to adopt a mind-set of continuous learning and growth.

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