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Corporate finance

Industry 4.0: The challenges of the manufacturing sector

June 1, 2023

The manufacturing sector is a pillar of the Quebec economy. And to stay competitive, it needs to constantly reinvent itself. For this reason, many businesses have started using new technology and updating their business models and management structures as a result. We’re in a fourth industrial revolution, also known as Industry 4.0, and it’s pushing entrepreneurs to start using cutting-edge production models.

A manufacturing sector made up of creative, resourceful and proactive individuals

Recent years have been trying for the manufacturing sector, but it’s recovering thanks to its fighting spirit. The difficulties to overcome are many and they’re nothing new. But the current context is making things tougher than ever.

Part of the solution to these many challenges lies in the creativity, resourcefulness and proactive approach of manufacturers. More specifically, a growing number of manufacturers have started using cutting-edge technology to improve the quality of their products and services while lowering operating and production costs. And they’re showing greater flexibility while doing it! The digital transformation is the perfect opportunity to grow the manufacturing sector. Businesses should consider 4 key things as we head into Industry 4.0.

Industry 4.0: Key considerations

1. Labour shortage

With the aging population, some businesses are looking abroad to fill positions. However, this solution may be temporary. Investments in automation are part of a sustainable solution to labour shortages. The intent is not to replace humans with robots, but rather to train employees who can supervise the machines instead of doing work by hand themselves. To stand out from the competition, you have to be creative and take chances.

Read: How to become a top employer

2. Supply chain

The pandemic continues to pose supply chain challenges, so businesses need to find new strategies to avoid raw material shortages. After facing transportation issues, delivery times and closed borders, they must now contend with the rising cost of raw materials on top of shortages of important commodities for industrial processes. One solution is to use reliable local suppliers that offer quality products.

With the repercussions of various global disruptions still being felt, caution is the name of the game when it comes to procurement. Expect delivery delays, be resourceful, make sure you have the raw materials you need and find multiple suppliers you can count on. It could also help to use sales prediction software with high accuracy rates to mitigate inventory risk.

Read: 10 tips for reviewing your procurement strategy

3. Digital transformation

Globalization is no longer a theoretical concept; it’s reality. Quebec manufacturing companies need to modernize to stand out in local, national and international markets! Production issues and process optimization are only some of the challenges businesses face, and they need to tackle them with ingenuity.

For example, data connectivity in manufacturing increases predictability and improves decision-making. This makes it easier to get a clear and up-to-date picture of a factory’s staff, equipment, products and other needs. With a system like this, a business could have factories in Quebec, Mexico, the US and Europe, and monitor productivity for all of them in real time.

Accelerate your business' digital transformation

4. New business model

Integrating digital technology is an excellent opportunity to modernize your business and reassess your business operations, from production, supply and logistics to marketing, management and human resources. Innovative tech like 3D printing and smart devices is paving the way for new business models. And the cost of these technologies has dropped in recent years.

A number of Quebec companies are using new technology like smart devices and smart operations. Smart connected products can improve your company’s efficiency and product tracking. Product connectivity improves user experience and increases reliability while bringing down your operating costs and limiting downtime.

Smart operations, like the Internet of Things, are transforming manufacturing companies. They can send real-time information about assets and materials faster and at a power cost, which in turn improves quality and increases productivity and efficiency. Automated tasks minimize errors, which also lowers costs and increases reliability.

These changes allow for new, effective business models and offer the opportunity to innovate and make your mark!

Do you know about the many government programs that can subsidize some of these investments?

Switching to a digital approach could accelerate your business’s growth. The key is to get the right support every step of the way. Feel free to talk about your plans or ideas with an advisor at a Desjardins Business centre!