Smart technology risks manufacturers need to be aware of
UK manufacturers are under pressure to adopt transformational digital technologies, which can help them improve efficiency, reduce cost or create new business models that can drive competitive advantage.
The Manufacturer's Annual Manufacturing Report 2019, in association with PwC, shows that manufacturers understand the bottom-line benefit that can come with such technologies. Almost three quarters (74%) of the UK respondents recognised that they need to adopt digital technologies to enable them to prosper.
What the report also highlighted, however, was that a knowledge gap remains – not only from those manufacturers who have yet to adopt ‘smart factory’ technologies but also from those who are already on board.
Confusion over what constitutes ‘smart tech’
The report found that more than half of the manufacturers quizzed are yet to adopt digital technology – 27% said they currently have no plans to get on board, while 26% said they are unsure how to implement it.
However, those figures might not be what they seem, with certain responses suggesting that some manufacturers are not aware they are already deploying digital smart factory technologies.
As The Manufacturer website reports, one respondent said: “Not sure what you mean by digital smart factory technologies. We have an ERP system and we have CNC/robotic machinery.”
Many would consider these to be digital smart factory technologies. The concern is that, if these organisations haven’t recognised they’re already operating with smart factory technologies, they might not have considered all the risks that come with them.
When embarking on such an important digital transformation project, companies must remain cognizant of the risks of the new technologies they’re implementing – in particular the potential for business interruption, both during the implementation process and once they are being relied upon.
Balancing bravery with risk
Cara Haffey, Industrial Manufacturing & Automotive Leader, PwC called for manufacturers to be “braver” by adopting the latest technologies.
“The UK has a tremendous platform to capitalise on these technologies, but adoption needs to be accelerated. It will require clear leadership and a desire and culture for organisations to be braver in disrupting their existing business models,” she said.
At the same time, however, they should develop robust risk mitigation methods by interpreting the underlying drivers of global risks.
MS Amlin is a leading global specialty commercial insurer and reinsurer with operations in the Lloyd’s, UK, Continental European and Bermudian markets.
Comprising Mitsui Sumitomo’s London and Bermuda-based operations and the historic Amlin businesses, MS Amlin specialises in providing insurance cover for a wide range of risks to commercial enterprises and reinsurance protection to other insurers around the world.
It is wholly owned and fully supported by the financial strength and scale of MS&AD of Japan, the eighth largest non-life insurer in the world. To learn more, visit www.msamlin.com.
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