Changes in Organisations Due to Industry 4.0

Table of Contents

Introduction and Background

Aim of the Study

Objectives of the Study

Literature Review

Importance of Industry 4.0

Factors of Change Management

Communication

Apt Strategies

Motivation

Consultation

Theoretical Framework

Lewin’s Change Model:

Unfreeze

Change

Refreeze

Bridges’ Transition Model

Case Study of PwC

Analysis of Case Study

Discussion and Critical Reflection

Science Fiction Story

Conclusion and Recommendation 250

References

PwC. (2016). How Industry 4.0 changes business. [online] Available at: https://usblogs.pwc.com/emerging-technology/how-industry-4-0-changes-business/ [Accessed 6 Dec. 2018].

CHANGE IN ORGANISATION DUE TO INDUSTRY 4.0

Current study is based on the analysis of the impact on organisations due to adoption of industry 4.0. Basically, industry 4.0 refers to the current trend of data exchange in technological manufacturing, cloud computing, internet of things, and cognitive computing are the essential and key elements of Industry 4.0. Most of the organisations are inclined to adopt such procedure in order to enhance their performance and to raise the productivity criteria as well. Implementation of the industry 4.0 might be found negative for the organisation but the positive aspects were found greater. Current study is aimed to discuss the external and internal changes faced by the firm. Leaders of the firm hold the responsibility to maintain the change by implying relevant strategies on the firm. If the criteria of doing business change then it must possess direct effect on the employee behaviour and their satisfaction level.

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During past two years, the revolution of the technological advancement came into existence. The innovation and revolution has largely been adopted by several organisations for increasing their organisational benefits and to achieve competitive advantage as well. By entering industry 4.0, organisations have a huge platform to carry out their operations more efficiently. The impact of  IOT and cloud computing played vitally in increasing the productivity criteria of the firm. By using cloud computing services, manufacturing industries can save their huge data more easily than before. Moreover, the data that has been saved in the cloud system, kept secured by adopting cloud security process. On the other hand, internet of things played significantly in saving the time for several operations. Those operations which require much time can be done aptly with the help of Internet of Things and did the same work in minutes instead of spending hours on it. The importance of industry 4.0 is being highlighted in the study and the leaders are being recommended to adopt relevant strategies for marinating the change in organisation.

Aim of the Study

Current study is aimed to analyse several aspects of change management by considering the case study of PwC as an example. However, any external and internal change assessed in any organisation caused by adopting the industry 4.0, is the primary goal of the study. Basically the author is inclined to evaluate the steps and procedures used by the leaders for managing the change created in the organisation. Entire scenario can be assessed aptly by incorporating relevant example, for doing so, PwC has been selected for completing the section of case study. Moreover, the leaders of the firm had also been recommended by relevant strategies and steps for keeping up the image of the organisation within the market. Along with this, the criteria of employee satisfaction and work engagement has also been involved in the study, which is the major criteria of getting affected.

Objectives of the Study

Primarily, the study is focused on investigating the external and internal affects observed in any organisation caused by Industry 4.0. Following are the basic objectives to which the study is basically depending:

Assessing the impact of Industry 4.0 on organisational performance and productivity

How Industry 4.0 works as a catalyst to change management

Evaluating the crucial factors for efficient change management

Analysing the pros and cons of the change management

Providing apt recommendations to the leaders for maintaining the change in the organisation

The section is meant to discuss the previous studies done on the similar topic by the researchers. The significance and the negative aspects have been assessed by means of reviewing previous literature. However, the impact of Industry 4.0 on several respects and operations of organisations should be assessed with the help of previous studies. On the other hand, a number of suitable theories and models have been selected that helped in the evaluation of change management.

Importance of Industry 4.0

A study conducted by Lasi et al., (2014) highlighted the innovation and advancement in the manufacturing industry and concluded that industry played vitally in raising the economy. The advancement in the technological era within the industry of manufacturing and technology was found greatly beneficial in terms of performance and productivity. Lean manufacturing is the process that involves cutting down the waste from the process of manufacturing. It has been assessed by Sanders, Elangeswaran and Wulfsberg (2016), industry 4.0 helped in promoting lean manufacturing. The researchers were intended to say that adoption of industry 4.0 must be beneficial for the achievement of competitive advantage. The claim of achieving competitive advantage can be justified by assessing the relationship between productivity and the process of manufacturing. As the process of manufacturing is efficient then the products obtained by the manufacturing process must be of good quality. Thus, it can be concluded that the industry 4.0 played vitally for paving the productivity and performance of a certain organisation.

Factors of Change Management

Change management is that particular process that has been implemented on the organisation for increasing the performance and profitability criteria of the firm. Leaders hold the responsible for maintaining every operation of the firm and imply relevant changes on the firm by keeping the employee satisfaction on priority. It has been seen widely that if the process of change management had been adopted on the organisation, most of the employees argued on such changes. Due to maintaining the criteria of work engagement and employee performance, following factors are required to be taken into consideration while implementing the change management on the organisation:

Communication

For maintaining the organisational peace and equality, leaders are liable to communicate pertinently with the internal stakeholders (i.e., employees). By doing so, leaders succeeded in achieving the trust of the employees. The factor of communication is crucially helpful in raising employee satisfaction as well. By communicating properly, several suggestions can also be taken by to solve certain issue regarding organisational operations.

Apt Strategies

The base of the implementation of any change on the organisation is preparing an appropriate plan. Before implying any change, leaders’ role is to design a proper and strategic plan that help them in future to face any sort of problem while implementing the change on the organisation.

Motivation

Motivating the employees is another important aspect of the achieving organisational benefits. However, while implementing a change the organisation had to face great challenges in maintaining the motivation criteria but the firm had to explore such activities and operations which can motivate the employees. As employee motivation is directly proportional to the performance of the firm, therefore, suitable strategies are required to be adopted by the firm for motivating their employees. Such strategies may include, appreciating the work performance of employees either on monthly basis or weekly basis, providing intrinsic rewards to them, etc.

Consultation

By sharing the challenges and issues faced by the firm to the employees, relevant solutions can be obtained. Consulting to employees is one of the key factors which can enhance the change management process and leads the organisation to achieve competitive advantage.

Theoretical Framework

In order to survive a business respectively, it would require to evolve. For evolving, an organisation needs to make the variations. Without the model of change management, the success factor of those changes or variations is up to nothing more than hope. Following are the three Change Management Models which an organization need to adopt or follow for making effective and innovative changes within the organization.

Lewin’s Change Model:

This first is the Lewin’s Change Model. It is one of the most famous approaches and it is easy to analyse. From splitting the change procedure within three stages, an organization could break a huge, unwieldy shift within the bitesize areas which account both the people and procedure in the organisation. By analysing the change as a procedure within the distinct level, an individual could prepare himself for what is coming in future and making the plan for managing the transitions, analysing before an individual leap, so for speaking. All too often, an individual could move towards the blind changes, causing much unnecessary chaos and turmoil (Levasseur, 2001).

In order to begin any successful changing procedure, an individual must initiate from understanding the reason of change takes place. As Lewin (2001), he analyse it, “Motivation for bringing the change should be generated before the changes could occur”. One should help or support it to re-examine various cherished assumptions regarding oneself and one’s relation to other individuals (Manchester et al, 2014). This is the level of unfreezing from which the changes start. Lewin’s Change Management Model carries three different stages.

Unfreeze

The first stage is the unfreeze stages which engages the preparation of the organization for accepting that change is important, involves breaking down existing of the status quo before an individual could build up the latest way of operating. The main key is the development of a compelling message representing why the existing procedure of implementing things could not continue. For preparing the organization successfully, an individual need to start at its initials. Individuals need to challenge the values, attitude, and behaviour which currently defines it. Usually, the first part of the change is always stressful and difficult to understand or adopt. By forcing the organization for re-examining if core values, an organization efficiently develops a controlled critique.

Change

Just after the uncertainties have been created in the stage of unfreezing, the stage of change is where the individuals start to resolve their uncertainties and analyse for a new procedure to implement things. Individuals start to act and believe in the ways which support the latest directions. To accept the changes and contributions for making it quite successful, individuals need to understand the way it would benefit them (Manchester et al, 2014). A linked change model, the changing curve, concentrates on the particular problem of the personal transitions within the environment that varies and it is also beneficial for understanding this attribute in more detail.

Refreeze

Whenever the changes have been getting structured and individuals have embraced the latest procedure of working, the company is ready for refreezing. The outward indications consist of the stable organizational charts, institutionalize, or internalize the variations. This means that making sure about the changes that have been utilized all the time and also that they have been incorporated into everyday business. With the latent sense of stabilities, the employees feel quite confident and comfortable with the latest procedure of working. As the part of the refreezing procedure, making sure that an organization celebrates the success of the changes. This would help the individuals to find out the closure and help them out in believing that future variations would be successful.

Bridges’ Transition Model

It has been developed in the year 1991 from William Bridges. This model concentrates on the transition rather than any variation or change. While that may seem like a pointless difference, this minor factor alters the overall way which change management has approached (Bridges, & Mitchell, 2000). This makes the Bridge’s transition model as one of the most guidance models to the employees from the different reactions and emotions they would encounter whenever dealing with the variations. It has done this from explaining the three different stages of transitions, each of which the worker should be guided form the change to be much successful.

Ending, losing and letting go: Ending, losing and letting go is what an organization expect or any individual expects.  It is all regarding the guidance of individuals through the emotions which are linked with the variation and communicating the way their knowledge and skills would transfer to the latest activities.

The Neutral Zone: The neutral zone is basically the bridge between the new and old. It is likely to be the time when production is at the lowest and the employees most tempted to revert and give up. Whenever the changes are initially deployed individual would resist it, forcefully have the high workload factor, and might least productive while they adopt the transitions (Hemmeter, Donovan, Cobb, & Asbury, 2015). The appropriate way for combat is to regularly facilitate the team with the feedback to provide some wide context on the way they are doing and helping them to solve any issue they encounter.

The New Beginning: The new beginning is when the variations and changes have been accepted and energetically high. Again, rewarding the overall team members is an effective way for reinforcement the objectives which were handled quite well and were the appropriate thing to perform in the initial place. Meanwhile, setting up the new goals and objective and also utilizing the momentums from the variation to power up would help for making sure that there is no time to getting complacent and lapse returning into the old habits.

Although, the various number of change models offerings might be overwhelmed initially, having the set frameworks for deploying the variations would let the individual reliable and deploy changes. Also, let the business evolve. The business must take advantage of the combination of change models to adopt the massive change.

The industrial internet of things and the concept of Industry 4.0 is used as an element to transform the complex systems into the engine for growth. The respective statement can be further approved by reviewing the case study of PwC in which the investment related to the digital industrial production is growing at an exponential rate (PwC, 2016).  PwC or PricewaterhouseCoopers is considered to be a multinational professional service network which is headquartered in London, United Kingdom. PricewaterhouseCoopers is currently ranked as the second most famous professional services firm. In the increasingly complicated world, PricewaterhouseCoopers is determined to help the intricate systems function, evolve, and adapt in order to benefit the community and society. The company understands the importance of the latest technological trends such as the Internet of Things (IoT) and Industry 4.0. In this regard, the enterprise is projected to pump more than $900 billion per year in the digital technology (PwC, 2016).  It is expected that this investment will increase the revenue by more than $400 billion per year and thus it will reduce the operational cost as well. It has been defined in the case study that industrial systems are apparently complex and therefore various components and subsystems are affecting the overall performance of the organization.

It has also been exemplified in the case study that the enterprise generally adapts the technological and digital system like the Internet of Things (IoT) and Industry 4.0 to increase the overall efficacy of the business management and production process. In addition to this, the company tends to believe in the ideology that the rising industrial internet of things (IIoT) is fundamentally changing the overall nature of the problem. Therefore, it is projected that the respective firm with the help of the Internet of Things (IoT) and Industry 4.0 has advanced its system in order to resolve all the impending issues or problems which affect the company (PwC, 2016).

For instance, PwC PricewaterhouseCoopers is working with a well-known airline which tends to make use of the structured data from different sensors as well as the unstructured data which maintenance engineers typically generate when they properly work with aircraft. The respective data is commonly mined and converted into the key variables which are later fed into the analytical models with an intention to look for all the crucial patterns which are endowed with the credibility indicate the impending problem faced by the company. It has been noticed that with the application of this approach based on Internet of Things (IoT) and Industry 4.0, PricewaterhouseCoopers or PwC was able to help the airline in predicting the expected delays and cancellation of flights (PwC, 2016). In this way, it becomes evident that Internet of Things (IoT) and Industry 4.0 is capable of making the prediction system more effective and this effectiveness later assists the organization in attaining competitive advantage.

On the other hand, it is also evident that the company entitled (PricewaterhouseCoopers) or PwC changed its management system in order to become technically more advanced and effective. The advancement in PricewaterhouseCoopers’s operation can be further understood by another case which is reflected in the case study. It is apparent in the case study that PricewaterhouseCoopers or PwC while dealing with its client (Oil and Gas Company) used the Internet of Things (IoT) sensors in the pumping system which played are a crucial aspect of the oil environment (PwC, 2016). In most of the cases, these environments are exceptionally hostile, dirty, and hot. As a result, human beings cannot predict the failure of the pumping. However, the use of digital pumping systems which are equipped with the Internet of Things (IoT) and Industry 4.0, the sensors are able to generate the data which could be used in order to predict the failure and shut down the pumping system before the failure occurs. In this way, it becomes evident that the use Internet of Things and Industry 4.0 helped the company in boosting its performing and gaining more competence and proficiency to deal with different types of issues which takes place with the company.

The theoretical framework chosen is based on the Change management model based on Lewin’s Change Management model which has been assessed in order to evaluate and analyze the case study of PwC. The first major step of the change management model is based on unfreezing in which the company is given an opportunity to make significant changes and preparation to facilitate the changes in the company. The respective change is apparent in the case study of PwC where the company initially stopped its business operations after realizing the importance of the implication of new technological trends. Once the preparation was done, the company moved towards the second stage of Lewin’s change model which emphasizes on the execution strategies to adopt the proposed change. The management team of the company (PwC) also adopted a similar strategy to bring positive and constructive change in the company. This implication of change allowed the company to become more technically advanced an effective. Lastly, the company reused Lewin’s change management model by using the third stage of the model which focuses on refreezing. At this stage, the company conducted tests in order to make sure that the implemented changes are effective enough to benefit the company in becoming technically more advanced and efficient.

On the other hand, it is also an observable fact that both internal and external factors are typically affected by the implication of new changes based on Internet of Things (IoT) and Industry 4.0. Based on this analysis, it becomes apparent that this change management process which took place at PwC helped in simplifying the entire solution.  Most importantly, the performance criteria and productivity of the company increased significantly with the adoption of the Internet of Things (IoT) and Industry 4.0. In addition to this, it is also a considerable fact that the process through which the Internet of Things (IoT) and Industry 4.0 was adopted proved to be highly effective and thus enabled the company to gain competence and proficiency to deal with different environmental, social, technological, and management-related issues.

From the above analysis, it has been seen that the implementation of advanced technology and innovation must result in the favour of the organisation. Industry 4.0 is basically the innovative methods implied on the organisation for improving the productivity of the firm. Moreover, the performance criteria has also been affected by the adoption of Industry 4.0, due to incorporating innovation in the firm, quality of the products have been increased accordingly. The case of PwC highlighted that they have change their way of providing services and replaced it by IIOT (Internet of Things), which is one of the elements of Industry 4.0. The organisation have used apt strategies for maintaining the change, the process of IIoT had been implemented on the organisation for the sake of raising their profitability and earning criteria. Furthermore, one of the major affect assessed from the analysis was that they were able to save their time by following up several operations in a matter of few minutes instead of spending hours on it.

On contrary, it was being assessed that the industrial system of PwC becomes more critical and challenging. The situation can be dealt efficiently with the help of IIoT, the adoption of internet of things can provide a diversified area for analysing the data analytics. Company has the opportunity to predict the behaviours, optimising every operations, and also an ease is of prescribing relevant solutions have been captured. Another crucial aspect of assessing and evaluating the system failure has been revealed from the analysis. By using the process of IIoT, the company is inclined to predict about the failure of their systems and equipment at the right time. If the object failure has been analysed on time then it will play crucially in increasing the worth and productivity criteria of the firm. It is evident that performance criteria of a certain organisation is solely depends on the productivity and the quality of the products and services provided by the firm. Implementation of IIoT can enhance the quality of the products and hence increases the chance of being competitive among the rivals within the market.

Conversely, there exist number of barriers as well while adopting the IIoT and implementing it in the organisation. IIoT is solely depending on analysing, storing, and formatting the data and used it to transfer from one source to another. One of the major challenges faced by the firm was different formats of the data. The data has been fetched from unlike sources, therefore the quality of the data may get worsen accordingly and the chances of difficult formatting is induced. Although the data might contain some security issues but these issues can be resolved by implying cloud security on the stored data. However, adopting an element of Industry 4.0 (i.e., IIoT)possessed the threat of increasing variation of data. Moreover, cost issues are the most significant challenge that has to be faced by the firm while implementing IIoT.

Ash is a final year student of Business Law and needs a huge platform for storing the bug data. He has a laptop but his laptop has to face issues if huge amount of data has been transferred to it. He discussed his problem with his teacher and then he was suggested to use cloud services for saving his important data. The cloud computing service used by him worked perfectly fine and the issues of laptop was totally vanished. Later on, when he shared such relevant information with his classmates, he was then suggested to secure his data because anyone can access his data easily as it is available on a public profile. Then he go through the implementation of cloud security services and implied several privacy steps in order to secure the data. In this way, his data got secured and he still enjoy the ease of saving bugger data in his laptop with the assistance of cloud computing.

It has been seen from entire analysis that Industry 4.0 was found tremendously helpful in enhancing the performance of the firm. The case study of PwC provide an ease in assessing the entire situation. It has been seen that both the internal and external operations of the firm get affected. Industry 4.0 is basically the innovative methods implied on the organisation for improving the productivity of the firm. Moreover, the performance criteria has also been affected by the adoption of Industry 4.0, due to incorporating innovation in the firm, quality of the products have been increased accordingly. The case of PwC highlighted that they have change their way of providing services and replaced it by IIOT (Internet of Things), which is one of the elements of Industry 4.0. The organisation have used apt strategies for maintaining the change, the process of IIoT had been implemented on the organisation for the sake of raising their profitability and earning criteria.

References

Bridges, W., and Mitchell, S. 2000. Leading transition: A new model for change. Leader to leader, 16(3), 30-36.

Hemmeter, J., Donovan, M., Cobb, J., and Asbury, T. 2015. Long term earnings and disability program participation outcomes of the Bridges transition program. Journal of Vocational Rehabilitation, 42(1), 1-15.

Lasi, H., Fettke, P., Kemper, H.G., Feld, T. and Hoffmann, M., 2014. Industry 4.0. Business & Information Systems Engineering, 6(4), pp.239-242.

Levasseur, R. E. 2001. People skills: Change management tools—Lewin’s change model. Interfaces, 31(4), 71-73.

Manchester, J., Gray-Miceli, D. L., Metcalf, J. A., Paolini, C. A., Napier, A. H., Coogle, C. L., and Owens, M. G. 2014. Facilitating Lewin’s change model with collaborative evaluation in promoting evidence based practices of health professionals. Evaluation and program planning, 47, 82-90.

PwC. (2016). How Industry 4.0 changes business. [online] Available at: https://usblogs.pwc.com/emerging-technology/how-industry-4-0-changes-business/ [Accessed 6 Dec. 2018].

Sanders, A., Elangeswaran, C. and Wulfsberg, J., 2016. Industry 4.0 implies lean manufacturing: research activities in industry 4.0 function as enablers for lean manufacturing. Journal of Industrial Engineering and Management, 9(3), pp.811-833.