Industry 4.0: Operations Management and Technology Development

Executive Summary

Internet 4.0 is considered to the fourth revolution bringing in the change in the field of technological advancements. Considering the significant impact industry 4.0 has brought in the modern era of business it can be easily said that it has transformed every business sector. Assessing the significance of internet 4.0, this specific report significantly highlights the significance of industry 4.0 in context of operations management in the retailing sector. The report critically evaluates the response of industry 4.0 on the chosen organization followed by an in-depth analysis of technological advancements and operational management in regards to effectiveness and efficiency of production and services.

Introduction

Over the past couple of decades, there has been a significant revolution in the field of technological advancements. The revolution of globalization has prolifically impacted the field of industrialization and technology which has changed the entire face of operating business in the modern era. The globalization’s gift of industry 4.0 is considered to be the most significant aspect in technological advancements along with the change in operations management and business paradigms. Considering the improvement, efficiency and effectiveness of the services as well as production, industry 4.0 titled “The Fourth Developed Insurgency” has taken the automation of the production and services efficiency to a whole new level by the introduction of flexible and customized mass production technologies. These aspects specifically elaborate that the machines of the modern era will operate in an independent way, or cooperate with individuals in development of consumer-oriented production field along with efficiency and effectiveness that continuously works on maintaining itself.

Therefore, the machine has become the most significant as well as independent entity that is able to analyze and collect data for advising upon it. The entire upgrade becomes possible by introduction of self-cognition, self-optimization and self customization into the specific industry of production and services. Despite bringing in various sorts of influence, the industry 4.0 however is accompanied with various sorts of challenges. This specific report would prolifically evaluate and provide an essential overview about the underlying technologies brought in the form of digitalization along with the possible benefits in the field of manoeuvre administration in the context of utilizing “Big Data to advance the usefulness and competence of production and services.” The paper would also provide in-depth analysis about the impact of industry 4.0 on the chosen organization from operational management context and trends in industry 4.0.

Industry 4.0

The phrase, industry 4.0 was first present in the year 2012 in the Hannover Fair, Germany as one of the most significant and future projects as Germany’s High Tech Strategy 2020. To be precise, initially it was intended in evaluating the scientific alterations in manufacturing unit and locate out the different precedence of constant policy structure in preserving the worldwide competitiveness of Germany based industries (Lasi et al. 2014). The phrase 4.0 mainly designates the industry 4.0 which is well thought-out to be the fourth developed revolution, a commonsensical persistence of the preceding three industry insurgencies. The industry 4.0 applies to the holistic approach of connectivity, using of data and significant insights across the various business operations including the value chain. The prolific implementation artificial intelligence and decision making aids the workers along with optimizing the automation process.

The present, fourth revolution started in the year 2000 specifically emphasizes in taking the computerization yet further and it gyrate around the cyber-physical production systems. The fourth revolution intensively overlaps with the scientific advancements termed as the industrial internet of things, smart factories, superior manufacturing and smart industry (Brettel et al. 2014) The industry 4.0 is a significant amalgamation of various original technological progressions such as communication and technology, cyber-physical systems, system communications, cloud computing and big data, simulation, modelling and virtualization and improvised equipment for cooperation and human-computer communication.

Organizational Background

The evolution of industry 4.0 has significantly impacted various industries of the modern era. The technological advancements and response of industry 4.0 has been quite significant to attain the creative levels of effective operations management and efficiency in the production and services. Billabong International Limited an Australian based surf organization, primarily a clothing retailer that manufactures accessories, like backpacks, watches, snowboard, and skateboard products under various brand names. The organization was established in the year 1973 in Queensland as a private organization. In the year 2000 the organization was listed in ASX, becoming a public organization with shareholders. The organization over the years has established its wide range operations across four major continents with distribution to more than sixty nations all around the world. Acquisition of distinctive other brands like Element, Nixon, Von Zipper and Honolua etc have prolifically enabled the organization in diversifying their range of products and providing quality service in terms of production. The organization has been one of the forerunners of implementing the key aspects of industry 4.0. The organization over the past decade has eventually upgraded its operations management in remaining competitive in the receding global economy. This has helped the organization in strong growth sales in Australasian and European sectors. Billabong being an international brand has more than 2000 staffs all around the world and has a significant commitment to their stakeholders and consumers in terms of service, production, governance and integrity.

Billabong being an international brand has acquired huge demands from its consumers in terms of production and services. This has specifically helped the organization in deciding on to the specific measures of industry 4.0 which has significantly impacted the operations management of the organization. The utilization of Big Data is the most significant developments of industry 4.0 has enabled the organization in taking strategic measures for having a strong operational unit. In order to diminish the costs of production, the organization with the help of advanced production unit has been manufacturing products from China. This significant outsourcing form and strict procedures has enabled the organization in ensuring quality control. Having offices in various parts of the world, Billabong has used the global web approach along with subsidiaries to move its products faster by avoiding regulations of governments, getting closer to the consumers and markets and avoiding the risks of foreign exchange.

Impact of Industry 4.0 on Billabong

The retail industry of Australia has been one of the most significant and viable industries that has been impacted by industry 4.0. The evolution has specifically enabled the industry to rise to newer heights over the past couple of decades. The significant use of technological advancements and operational efficiency has led the organizations in staying competitive enough. Considering the scenario of Billabong, it was found that industry 4.0 impacted the organization by considering three major diverse that has enabled the organization in building a digitalized enterprise.

• Digitization and Incorporation of Horizontal and Vertical Value Chains

The vertical incorporation has impacted the processes across the complete organization which includes manufacture, product development, and purchase via logistics and services. This significantly has improvised the management of the organization’s operating efficiency along with quality of the product (Lee, Khao & Yang, 2014). All these are basically supported in real time by integrated data network and augmented reality. On the other hand the horizontal integration that includes technologies like trace and track devices help in reaching out to the customers as well as the key value chain partners.

• Digitization of Product and Service Offerings

This significant aspect mainly involve imbedding of existing devices with tools of data analytics which emphasizes on developing new products that solely focuses on the integrated solutions (Jazdi, 2014). Considering the scenario of Billabong, it has helped the business in refining their products range for fitting the needs of their end-consumers.

• Customer Access and Digital Business Offers

The organization has significantly used the disruptive digital business models which have been mainly used in generating the additional digitalized revenues and optimization of the consumer access and interaction. The digital products and services are frequently looked upon to serve the consumers with needful solutions in the distinct digital ecosystem (Shrouf, Ordieres & Miragliotta, 2014).

Big Data in Improvising Effectiveness and Efficiency of Production and Services in Billabong

The big data analytics has been the most intriguing aspects of improvising the effectiveness and efficiency of production and services. Billabong being one of the major players has specifically been impacted by the likes of big data that has been a major revolution of industry 4.0. The big data analytics in context to operational management has enabled the organization to fix its production and services issue by upgrading the operational effectiveness of the organization.

• Consumer Behavior Analytics: The deep, data driven consumer insights are quite critical in tackling the various drawbacks like improvising the consumer conversion rates, personalization of campaigns for enhancing revenues, avoiding and predicting the churn of consumers and lowering the consumer acquisition costs. As the consumers of the present day interact with the organizations via social media sites, e-commerce sites, stores etc. it drastically enhances the data types and complexity to analyze and aggregate (Lee, Bagheri & Kao, 2015). Thus, Billabong has significantly aggregated and analyzed together that has yielded insights to evaluate the high value consumers, what are the aspects that motivates them to purchase more, their purchase intentions and how to acquire them, This has enabled the organization in improving the consumer acquisition as well as drive the consumer loyalty.
• Personalization of In-Store Experience with Big Data: As observed that in recent era the online sales have grown rapidly. This trend has emerged where most of the purchases perform their research via online or in store. The advent of big data has specifically offered the people tracking technology in analyzing the behavior in the store and measuring the merchandising efforts influence. The use of data engineering has significantly helped Billabong in making sense of their needful data for optimizing the tactics for merchandising, personalizing the experience of in-store with the loyalty apps along with driving the timely offers in incenting the consumers for completing the acquirement with the end objective being enhancement of sales across all the channels (Sander, Elangeswaran & Wulfsberg, 2015). With the help of data engineering the organization has turned in-store consumer data sources into significant competitive advantage. Acquirement of the insights has enhanced Billabong’s cross selling, enhancement of the promotional effectiveness and many other aspects.
• Operational Analytics and Supply Chain Analysis: Billabong uses analytics in optimization of supply chain along with product distribution in scaling back the prices. The organization therefore potentially combines the structured data along with unstructured data for discovering the runtime series, outliers, analyses of root cause, parse, remodeling and visualizing the data. The significance behind Billabong’s utilization of data engineering platforms to enhance the operational efficiency for unlocking the insights buried in machine data, sensor and log (Roblek, Mesko & Krapez, 2016). These specific insights include the information regarding the trends, outliers and patters which helps in improvisation of decision and driver quality operations performance. In context to industry 4.0 and operations management, the data engineering has allowed the organization in combining the structured data like ERP, CRM, Public Data and combine together with the unstructured data for detecting, transforming and visualizing data.

Operational Management Competencies in Industry 4.0

It has been observed that the revolution of industry 4.0 in context to operational management for improvising the effectiveness and efficiency of production and services in retailing industry guides the innovation and productivity processes by the significant principles of knowledge and skills (Wang et al. 2016)It has been quoted by various authors and researchers that the new possibilities for improvising the efficiency have become available with the help of significant devices by the advent of industry 4.0. In terms of assessing the competencies for retail industry it is quite essential for emphasizing on three key aspects:

• Development of the new solution of intelligent logistics
• Improvement of the method in value stream mapping
• Lastly, by the application of simulation models

In terms of operational management, for civilizing the usefulness and competence of production and services the senior managers of the organization can improvise the development of successful innovative processes by utilizing their technical skills for designing the procedure which would lead to enhancement of performance. It is quite obvious that implementation of innovation in the organizational process needs high technical skills level which enhances and encourages the ability in generating improved and new procedures (Witkowski, 2017). The technological innovation capabilities of industry 4.0 are quite relevant as they helps in operating in the organization as the strategic resource and allows in attaining the sustainable competitive advantage in a dynamic environment. Moreover, the technological innovation capabilities are also considered to be a hugely impactful as they are the strategic resource for enabling organization in building the performance in industries like retailing, which faces immense changing environment.

Technological Advancements in Industry 4.0

There have been various technological advancements in industry 4.0 which can be specifically used as the source of effective operations management in context to effectiveness and efficiency of production and services.

• Information and Communication Technology: In terms of innovation it has been assessed that 80% are based on ICT. The digitalization and application ICT specifically allows in integrating all the systems via the value and supply chains which enables data aggression at all levels (Schmidt et al. 2015) All sorts of information is digitized and the analogous arrangement across and inside the organizations are mainly integrated at all the stages of manufactured goods development and using lifecycles.
• Cyber Physical Systems: These systems mainly improvises the ability of monitoring as well as controlling the physical processes by the help of robots, drones, sensors and 3D printing devices (Erol et al. 2016) In the cyber physical systems all the aforementioned things uses the sensor technology and data analytics which are aggregated in to the interacting elements network.
• Network Communications: All these significant devices both are used by suppliers, manufacturing factories and distributors. These devices are connected via distinctive wireless and internet technologies. These network connections are highly reliable and needs crucial requirement of industry 4.0 (Liao et al. 2016). The networking of interconnected components helps in self organizing and decentralizing of in use of cyber physical systems.
• Big Data and Cloud Computing: With the significant make use of cloud computing and big data, the information those are recovered via network communication can be used in distinctive models for stimulating, virtualized process of manufacturing (Liao et al. 2017) These significant models know as device shadows or digital twins help in enabling monitoring, prognostics and diagnostics of various assets.

Conclusion

Critically analyzing and evaluating the key aspects of industry 4.0 and utilization of Bid Data by the chosen organization Billabong in improving the effectiveness and efficiency of production and services it can be assessed that the industry 4.0 has been a significant revolution for organizations of the modern era. Considering the significance of operations management of Billabong, the use of Big Data has specifically helped in understanding the key prospects by which the organization has been able to attain the competitive advantage. Considering the scenario of production and services the advent of industry 4.0 has enabled organizations in utilizing various technological aspects which has not bridged the gap among the traditional forms of performing business, but it has also enabled the organizations like Billabong and other organizations of retailing sector to prolifically monitor and control the operations management in an effective manner to stay at top of their business performance.