Industry 4.0: Update

The Trent and Mersey Canal, at Stoke-on-Trent with narrow boat and pottery kiln. Photo: Geoff Maitland

Wedgwood, located at Barlaston, Staffordshire, England is one of the oldest ceramics companies in the world, established by Josiah Wedgwood (1730 – 1795) in 1759. In 1987, it merged with Waterford Crystal. Their assets were purchased in 2009 by New York based KPS Capital Partners, to become WWRD Holdings Limited, an abbreviation for Waterford Wedgwood Royal Doulton. The company was acquired by Finnish Fiskars in 2015.

In March 2019, Wedgwood announced that about 145 jobs (out of a total of 440) would be eliminated. Its reasoning for the firings almost seem poetic, as it looks to “reduce complexity across its operations”. Complexity is something that most companies embrace. If something is too simple, then anyone can do it, and there would be no need for that company.

Josiah Wedgwood was one of the great engineering entrepreneurs of the industrial revolution. He was a Fellow of the Royal Society, led the industrialization of the ceramics industry, and played a significant role in establishing rail and canal infrastructure.

Why Wedgwood? Yes, he was born into a family of potters, but so were many others, and they did not develop a ceramics industry. One difference was that Wedgwood contracted smallpox as a child. This left him with a permanently weakened knee so that he was unable to operate a potter’s wheel. Because of this he spent his time on the science/ engineering/ design of pottery products and production techniques.

Other ceramics companies have had similar fates. To mention only one recent example, in April 2019, Dudson, also located in Stoke-on-Trent, announced that it would be shutting down its tableware, glassware and fine china business that started in 1800, and all its 390 employees would be made redundant.

This is a reversal of what Phil Tomlinson wrote about in an article titled, How England’s broken ceramics industry put itself back together (2015). Tomlinson comments on the reversal of the ceramics industry, that: “The first factor is global demand, where particularly US and Japanese consumers have become increasingly averse to purchasing premium wares manufactured cheaply in Asia (especially China) but sold under one of the branded names from the English Potteries. With Stoke wares still perceived to be among the highest quality in the world, the “Made in England” back-stamp is an increasingly important marketing tool.”

One of the major difficulties with Tomlinson’s perspective is that wages for the majority in much of the industrialized [sic] world have stagnated the past forty years. Income has been replaced with easy credit, and manufacturing jobs have been increasingly outsourced. Now, more than ten years after the great (financial) recession of 2008, those credit cards are increasingly being maxed out. The majority no longer have the opportunity to buy products “among the highest quality in the world”, but will have to accept that they belong to the “Made in China” class of consumers.

The world is filled with prophets expecting the emergence of a fourth industrial revolution, or Industry 4.0 as they prefer to call it. Some have even gone beyond to refer to it now as Industry 5.0. Technologies powering this include the usual components found in mechatronics, but with additional buzz words such as artificial intelligence (AI), 3D printing and green tech, perhaps more accurately described as green wash.

These prophets are expecting smart manufacturing, as it is also called, to foster the return of manufacturing activities to advanced/ high-cost economies. They are looking at three areas: servitisation, personalization and makerization.

Servitisation: the symbiosis of traditional manufacturing and services.
Rolls-Royce is the poster child, and exemplifies this with ‘power-by-the-hour’ maintenance packages that replaces maintenance (a service), with maintenance-with-a-fancy-name, which is still a service.

The main point with power-by-the-hour, is that Rolls-Royce, as developer of airplane engines, has a greater understanding of their risk, and can manage it better than airlines, who are – essentially – passive recipients of the technology developed by someone else. American farmers, for example, want a right to repair agricultural equipment because manufacturers, such as John Deere, are placing all of the risk onto farmers, rather than taking upon themselves that risk, despite the fact that it is the equipment manufacturers who have designed the equipment, not the farmers.

The only fair solution to this dilemma is for the equipment manufacturers to lease equipment on an hourly basis, that includes all maintenance costs. This way, farmers can choose a solution, knowing the total costs involved. In other words a ‘power-by-the-hour’ solution for farmers would put the risk associated with agricultural equipment where it belongs, with the equipment manufacturers.

Personalization: Customised products produced in small batches or even as unique pieces which require customers to co-innovate/ co-produce with the manufacturer. The poster child here is Shapeways, which takes control over customer designs, 3D prints them, then uses third party logistics firms to transport products back to the original designer/ consumer.

Makerization involves a situation where local production (a service) is integrated with a global supply chain network to ensure that components (products) are globally available on short notice. To ensure that innovations are diffused, designs and other forms of intellectual property, should be (some would say, have to be) open source. The symbol of makerization is the 3D printer. Originally, this was invented by Chuck Hall (1940 – ) in 1983. He used photopolymers, acrylic-based liquids that instantly solidify when exposed to ultraviolet light. Since then, fused filament fabrication has been the norm, with Makerbot, Ultimaker, Reprap and now Creality becoming the poster children of the 3D era.

For personalization and makerization to work, it is necessary for (potential) consumers to know how to communicate with (potential) manufacturers. This means that they have to know how to draw. Freehand drawing is a minimum. Better still, they should learn how to use Computer Aided Design (CAD) programs, to express their intentions. SketchUp, developed by @Last, bought up by Google, then sold on to Trimble Inc., offers mainstream opportunities, as a web-based application (SketchUp Free), as non-open-source freeware (SketchUp Make), and as a paid version, (SketchUp Pro). The latter two requiring Apple OSX or Microsoft Windows operating systems. Fortunately, the open-source community has both Blender and Free-CAD (along with many other similar products), although both of these mentioned are more difficult to use than Sketchup.

There is also a granularity issue. The product made by one person/ business/ organization, can become the component of another person/ business/ organization. With the use of automated processes, labour costs become less of an issue, and component/ product prices become more standardized. Producers can then choose suppliers nearer to home, but connect with consumers both closer and farther away – at least when they offer a unique product. This offers the prospect of a more efficient form of production, with greater sustainability. See comment, below, about OEMs and tiers.

It is this kind of circular-economy efficiency that presents a real opportunity for advanced economies to pursue more evenly distributed and sustainable socio-economic growth. Enabling manufacturers to access and utilise new technologies in this way will be a key to success. Therefore, developing new industrial policies will be necessary to enable businesses to embrace Industry 4.0. New policies will be needed to bring sectors into the new age, so that they will be able to take advantage of new technologies that are emerging.

Unfortunately, not all sectors are embracing change, equally quickly. The construction industry, especially, is reluctant to modernize. Houses and other building have been 3D-printed, but that information has been ignored, possibly suppressed, by prominent business leaders. Despite this, Building on Demand (BOD) will be part of the future. A weblog post about this topic was written in 2018-07-04. See also:

A comment about OEMs and tiers

OEM stands for original equipment manufacturer. The OEM is the company whose name/ brand appears on the final product: Tesla is an OEM of electric cars, while Asus is an OEM of computers.

An OEM may produce little of the final product. Much of the time they assemble. In addition they design/ brand/ define product scope.

But to manufacture the product they use tier 1 suppliers who deal directly with OEM companies. These are often major companies in their own right. Panasonic supplies batteries to Tesla, AMD supplies microprocessors to Asus.

Tier 2 suppliers deal directly with the tier 1 suppliers, but not OEMs.

There may be additional tiers, depending on product complexity.

At some point there will be a tier 3/ 4/ x supplier that provides raw materials like steel/ wood/ plastic. This marks the end of the supply chain, except when it doesn’t because the raw material has to be grown/ mined/ or in some way extracted.

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