Key take-aways

  • 1. Key industrial challenges can be overcome with emerging technologies

  • 2. Regulatory compliance can be supported by purpose-built solutions

  • 3. Decommoditisation can help enable circular economies

  • 4. Automation can mitigate the effects of an ageing workforce

The three key industry challenges

1. Meeting stricter regulations

Manufacturers have been subject to a complex web of environmental regulations and legislation for several decades now. In Europe, for instance, the European Chemicals Agency (ECHA)'s 2007 Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) regulations restrict the use of substances of very high concern (SVHCs).

At the same time, global regulations, sparked in part by the Paris Agreement, stipulate that companies must dramatically reduce the size of their carbon footprints. As such, they are seeking ways to save energy and increase their use of renewable forms of energy, such as solar and wind power.

Companies are now taking innovative technology-based approaches compliance. For example, some are using blockchain to track material sources, and purpose-built sensors to trace the amounts of restricted substances used in their products. Others are adopting AI-led and parametric design approaches to create compliant products from the first stages of development.

2. Enabling the circular economy

Many organisations are adopting circular economy-based approaches to developing and manufacturing their products. One approach, ‘the technical cycle’, means products circulate in a constant closed loop of manufacture, use, recovery and re-use.

One strategy to implement this cycle is decommoditisation. Instead of presenting products as a commodity near-indistinguishable from their competitors’ offerings, manufacturers must develop unique products with specific functionalities, designs, sustainability and reusability benefits that appeal directly to consumer needs.

This process is underway in several industries. In the petrochemical industry, for example, new business models such as Chemical Leasing are helping to update product manufacturing processes. In the fast-moving consumer goods sector, companies are responding to the needs of ageing populations by developing innovative products for the care industry.

To decommoditise their products, companies need to exploit digital technologies so they can be in direct contact with their suppliers and customers, well-positioned in the supply chain, and flexible enough to anticipate rapidly changing demands as they emerge.

3. Adapting to a shrinking workforce

Further to the issues surrounding environmental regulation and the push to a circular economy, the size of the skilled workforce in Europe is decreasing.

Population growth has been declining significantly in recent decades, particularly in the EU. By the end of the twenty-first century, the United Nations predicts that the world's population will only grow by 0.1% a year.

So, with low birth rates, there are fewer skilled workers joining the talent pool each year. And with an ageing population, many are reaching retirement and leaving the workforce altogether. To remedy this, manufacturers are increasingly looking to technologies for automation and data exchange in order to increase their profitability and flexibility. As a result, the outsourcing of non-core activities, and the use of internet-of-things (IoT) applications and data analytics for predictive maintenance or even prescriptive maintenance, are becoming more widespread.

In addition, industrial clusters are looking to share services, so they can access utility assets on a pay-per-use basis. As such, specialists must be trained in the use of digital technologies to run assets to improve both their performance and the services they provide while reducing capital and operational expenditure.

Smoothing the transition

Royal HaskoningDHV Digital is an experienced partner with a long history of assisting businesses in their digital transformation. We collaborate with our client, to help enhance society by providing knowledge and digital consulting services and software solutions.

With our digital consulting services and capabilities, our industrial clients can be confident that, even with stricter regulations and a smaller skilled workforce, they can focus on their core business and develop innovative business models in line with the circular economy push.

Download our white paper

For a more in-depth look at the role digital twins have to play in the rise of Industry 4.0, read our white paper Demystifying Digital Twins.

Industry 4.0: demystifying Digital Twin