Navigating Industry 4.0: Risks and Opportunities in the Age of AI

The advent of Industry 4.0, often referred to as the fourth industrial revolution, has ushered in a wave of transformative changes in the manufacturing sector. These changes, driven by groundbreaking technologies, promise increased efficiency, connectivity, and scalability. However, they also bring forth a host of new risks and opportunities. In a recent virtual discussion, Sourav Majumdar, Editor of Business Today, engaged in a conversation with industry experts Sundareshwar Krishnamurthy, Partner and Leader- Cybersecurity, PwC India, and Sohrab Prakash, Head Audit & Assurance, Hero MotoCorp. This article delves into their insights on the risks and opportunities unfolding in this dynamic landscape.

The Evolution of Industry 4.0 and Changing Perceptions

Before the COVID-19 pandemic, Industry 4.0 was often associated with cost leadership and efficiency. However, post-pandemic, the narrative has shifted. Industry leaders now perceive Industry 4.0 as a means to enhance resiliency and flexibility. Digital transformation underpins this shift, opening the door to new opportunities and risks.

Key Risks in the Era of Industry 4.0

Cybersecurity: As interconnectedness and data generation skyrocket, organizations must address cybersecurity with utmost priority. Protecting sensitive data from cyber threats is paramount.
Workforce Skilling: The integration of advanced technology can lead to errors, especially among blue-collar workers unfamiliar with these technologies. Upskilling the workforce becomes crucial to prevent catastrophic errors in manufacturing.

Supply Chain Vulnerability: The COVID-19 pandemic exposed the vulnerabilities in global supply chains. Organizations must anticipate and plan for disruptions caused by geopolitical events and economic pressures.

Proactive Risk Management and Planning

Organizations that proactively address risks at the outset of their transformation journey stand better equipped to identify opportunities for change. By embracing and effectively managing these risks from the beginning, they can navigate the industry landscape more effectively.

Hero MotoCorp's Perspective

Sohrab Prakash, Head Audit & Assurance, Hero MotoCorp, highlighted the significance of privacy and cybersecurity as key risks in their digital transformation journey. With the shift towards digital sales processes and data transmission between vehicles and devices, safeguarding customer data and ensuring cybersecurity have become paramount.

Hero MotoCorp employs a secure development lifecycle for app development, utilizes listening tools for social media monitoring, and engages in predictive analytics for sales forecasting. Their proactive approach aims to enhance the customer experience while mitigating risks.

PwC India's Role in Risk Mitigation

 Sundareshwar Krishnamurthy, Partner and Leader- Cybersecurity, PwC India, stressed the importance of clear ownership and adequate funding for cybersecurity. He emphasized that cybersecurity should be integrated into the design stage of any technology implementation, rather than being an afterthought.

PwC India advocates a culture that embraces new technologies and identifies opportunities within risks. They also emphasize the need for clear communication to board members and stakeholders in non-technical language.

Scaling and Culture Shifts

Scaling in Industry 4.0 is not just about technology but also about scaling risk management practices. Boards and CEOs need to understand the language of risk and opportunity, fostering a culture that promotes risk awareness and proactive risk management throughout the organization.

Conclusion: Embracing the Future with Caution and Innovation

The journey through Industry 4.0 is characterized by both challenges and opportunities. Organizations must strike a delicate balance between embracing innovation and managing associated risks. The evolving landscape demands proactive risk management, upskilling, and a cultural shift towards embracing change. By doing so, companies can thrive in this era of technological transformation, achieving quality, speed, customer satisfaction, and premium value recognition from customers and investors alike.