Drivers of Industry 4.0

Bangkok, Thailand: The country hosted last week ProPak Asia, deemed as the largest and biggest processing and packaging event in the region. The three-day international trade show covered several areas including food and beverage, pharmaceutical, printing, among other things. In fact, our very own DTI was also there to help promote the Philippine version of ProPak happening February next year.

The manufacturing industry is increasingly becoming a hot segment for disruption. In fact, ProPak Asia featured emerging technologies, such as processingtech, packagingtech, printtech drinktech, among others. These are further developed and enhanced by several drivers that help push the industry to transform, adapt, and be disrupted.

First is the environment and the increasing regulatory compliances. Plastic pollution especially in developing countries has been discussed many times. Globally, Bangladesh was the first country to ban the use of plastics. Taiwan also passed a law that will eventually eradicate the use of single use plastics; the country has given itself a leadtime of about 10 years to fully take out plastic in their society.

A 2015 study by the United Nations Environment Programme (UNEP) indicates that the Philippines is one of the five countries that are top producers of plastic waste globally. While at the national level the laws on banning the use of plastic are still to be created, some of our local government units have already started to ban the use of plastic bags in retail outlets. Cities like Las Pinas, Makati, Quezon City, Pasig and Pasay have started doing so.

The second driver is the labor conditions in the Philippines. Senate Bill 1826 or the “Act Strengthening Workers’ Rights to Security of Tenure” has already been approved last month by the Senate on its 3rd and final reading. This means the bill will now be transmitted to the President for signature and would later on provide the implementing rules and regulations for the law to take effect. This would greatly impact the hiring practices of manufacturing companies due to the potential increase in labor cost, and would likely form the business feasibility of investing in automation for further cost and production efficiency.

The third driver is the demographics and culture. The Philippines, being a young country, is a market where millennials and Gen Z comprise the segment that is more environment conscious. The segment prefers to purchase consumer goods that are more environmentally sustainable. Several studies point to the preference of this generation to buy and promote products that are environmentally friendly and sustainable.

In the lifecycle of any manufacturing company, the packaging of the product becomes the most critical aspect as this is the first customer touch point. The visual and aesthetic look of the product, as well as labels and packaging description, determines whether the buyer will end up putting the item in the cart. Manufacturing firms will need to consider upgrading, if not, changing their packaging lines to adapt to these drivers. This is a vital component for manufacturing companies to strategically think about and plan ahead to remain relevant in the marketplace.

Many technology companies provide capabilities in this space to help the manufacturing industry. Given the drivers that push companies to consider Industry 4.0, it is essential to consider these as part of their overall strategy moving forward.

Kay Calpo Lugtu is the COO of Hungry Workhorse, a digital and culture transformation firm; Co-Founder of Caucus, Inc. and Deputy Director of Global Chamber Manila. Her advocacies include data privacy, financial literacy, and nation-building. The author may be reached at kaycalpolugtu@hotmail.com.

Source: https://www.manilatimes.net/2019/06/20/business/columnists-business/drivers-of-industry-4-0/572190/

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