Daniel Zbacknik is chief consulting officer of ZF Management Inc. in Toronto. He is a Fellow of the Quebec CPA Order (FCPA, FCMA) and MBA, ICD.D.\nAs the owner of a manufacturing company, I frequently hear that we are headed for a fourth Industrial Revolution. Is that true? \n There is no doubt about it: We are headed for a technological revolution that will alter the way we live, produce and work. The fourth Industrial Revolution, often referred to as Industry 4.0, is all about the “smart” factory, where information and production are inextricably linked so that manufacturers can make better decisions, reduce waste, cut down on production time and eventually move toward mass customization of products. \nWhat are the elements of artificial intelligence [AI] that will have an impact on the manufacturing processes of the future? \nBasically we’re talking about a variety of technologies that work together to create a more efficient factory, including “smart” machines, the Internet of Things and machine learning. \nFirst, 3-D printing will reduce the amount of time it takes to go from design to prototyping, testing and production. What used to take months will take days. And built-in sensors throughout the production process will monitor how things are going – noting, for example, when you are getting low on certain parts, or whether there are defects in production. \nThat information will then be linked to the supply chain through the Internet of Things with sophisticated algorithms to direct it to the appropriate department. For example, if a part breaks down, the sensors would pick up the problem and then automatically trigger an order for a new part to get it back into production. Because the process is automated, you waste fewer materials and your reaction time is faster. \nMachine learning or artificial intelligence refers to the fact that the machines – think robots and other manufacturing machines – learn to correct themselves over time, operating more autonomously and with fewer errors. \nWhat can I do to prepare for the coming changes? \nIt’s crucial for manufacturers to educate themselves about what’s coming down the pipe and try to develop a road map for how their companies can get to Industry 4.0 in an incremental fashion. \n The first step is going paperless. That means digitizing all of the information you have on paper and storing it in the cloud [on Internet-linked servers] so that you can use it to create insights about things such as how you manage complex scheduling and production, and the procedures you follow when something goes wrong. \n But you can’t stop there. You have to connect all that information across operations, from the supply chain to design, production and quality control. \nWhat timeline are we looking at before artificial intelligence becomes ubiquitous? \n This technology will be in most organizations within five years. The leading corporations today are very heavily into technology, but many small to mid-sized companies will take some time to catch up. \nIs AI likely to result in lower employment rates? \n I think there’s a fear that AI is going to take all our jobs. But you can’t look at it that way. It should actually increase interesting creative jobs because we’re going to be able to do more work with routine tasks automated, and the work we do will be more rewarding and complex. \n When you look at the “dumb” robots that came in in the ‘60s for car manufacturing, we may have hired fewer for the production line, but we hired more people to deal with the new technology and schedules. We didn’t actually go backwards in terms of employment. Instead the job changed. \nWhat is the danger I face if
I don’t adapt?
\nIf your competitors get there before you, they’re going to render you obsolete because they will be able to do things cheaper and faster. This isn’t the flavour of the month. This is a revolution. And it’s going to happen whether you’re on board or not. \nWhat role can Chartered Professional Accountants play
in the process? \nCPAs are well positioned to drive this change by providing valuable strategic input to the direction of the organization. A professional accountant can not only help you track the numbers, they can provide valuable input into what those numbers actually mean for your business and how you can improve business processes and enhance profits. The manufacturing industry faces big structural changes, and a CPA who understands the disruption taking place and how to capitalize on it can be a tremendous asset.