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The Transformation of Manufacturing: Special Considerations for Managers

This article is based on the findings in the report, Understanding the Impacts of Industry 4.0 on Manufacturing Organizations and Workers, prepared for the Smart Factory Institute and written by Chris Cunningham, PhD, UC Foundation Professor of Psychology, and Scott Meyers, Graduate Assistant, Psychology Department & Smart Factory Institute, from the Industrial and Organizational Psychology Department at the University of Tennessee at Chattanooga.

The technological developments of Industry 4.0 will not automatically or immediately yield organizational benefits (Shet & Pereira, 2021). What is also needed is effective management and leadership support for the corresponding organizational change process and a general ability to align organizational objectives with new technological capabilities as Industry 4.0 is more fully adopted. In addition to the core worker-level competencies for Industry 4.0 outlined in the preceding subsections, it is important to acknowledge that the new ways of doing manufacturing work under Industry 4.0 will present new management challenges and requirements related to performance. For this reason, special attention is also needed to the specific KSAO and competency requirements for managers of manufacturing organizations at this time (McClelland & Boyatzis, 1980; Shet & Pereira, 2021).

Transformation of Manufacturing, Industry 4.0
Critical Requirements for Smart Managers

In many ways, these key competencies mirror those of manufacturing workers more generally. The main difference, however, is in the extent to which individuals who manage and lead others are able to develop not just proficiency (which may be an adequate level of competence in some of these core domains for most production workers), but mastery in many of these competency areas that are essential to shaping and effectively guiding the efforts of their organizations. Managers will especially need to pivot or shift from focusing heavily on administrative issues to more strategic and operational efficiency objectives (Dzwigol et al., 2020). Managers must possess the technical and methodological competencies required to understand and operate within new and rapidly evolving technology environments, as well as the social and personal competencies to understand, integrate, and lead the workforce within new and highly technical environments (Shet & Pereira, 2021; Ustundag & Cevikcan, 2017).

In addition to specific competencies within these domains, several additional competencies have emerged as essential for managers of manufacturing organizations that have adopted Industry 4.0. For example, within the broader domain of technical competencies, the importance of managerial research skills and research orientation are emerging as particularly important (Grzybowska & Łupicka, 2017; Shet & Pereira, 2021). This type of research-related mindset, orientation, and skill is required to discover new methods for production, technology integration, and increased efficiency (Grzybowska & Łupicka, 2017).

In a related fashion, managers must also have advanced data analytics competencies to successfully leverage the wealth of production data created in Industry 4.0. for facilitating good business decisions and predictions (Shamim et al., 2016; Vinodh et al., 2020) for which the stakes are higher than expected for other workers. Other competencies related to understanding and operating within Industry 4.0 include knowledge of connected technology architecture, robotic process automation, digital intelligence, and sustainability/efficiency orientation (Grzybowska & Łupicka, 2017; Shet & Pereira, 2021). Competence in traditional management areas including budget and workflow management, and report and presentations development and delivery will continue to be relevant (Łupicka & Grzybowska, 2018). However, even these more traditional areas of competence for managers are likely to require some adjustment as Industry 4.0 shifts production processes towards increased technology incorporation and managers are increasingly tasked with managing workflows that include more semi- or fully automated components.

Transformation of Manufacturing, Industry 4.0
Smart Worker Competencies

Social and interpersonal competencies will also be increasingly valued within Industry 4.0 manufacturing environments as managers will need to understand and work with increasingly advanced workers. Research highlights the continued importance of entrepreneurial intelligence and skill (Grzybowska & Łupicka, 2017; Shet & Pereira, 2021) as a competency that facilitates goal definition and assignment to effectively motivate workers, identify problems and opportunities, and understand others’ talents (Shet & Pereira, 2021). Other traditional people-focused business competencies that remain relevant include business acumen, design thinking, project leadership, and workforce management (Agostini & Filippini, 2019; Shet & Pereira, 2021). Related to these are general competencies associated with collaboration and emotional regulation and intelligence.

For managers as for other workers, continuous learning and growth mindset will continue to be critical competencies to foster and maintain. Managers will need a positive learning orientation to stay updated on current technical, systems, and business competencies as Industry 4.0 is more widely adopted. These individuals will also need to continuously upskill and increase their knowledge of new technology and work strategy advancements, as well as skills and abilities associated with operational management, people management, and technology integration (Frank et al., 2019). Managers will also likely need digital training or knowledge to be able to use current digital platforms and technologies (Grzybowska & Łupicka, 2017). Extending from this, managers must also continuously upskill and reskill their workforce (Popkova & Zmiyak, 2019). Managers must be able to effectively create and sustain a positive learning culture that emphasizes and encourages lifelong learning in their workforce. Critical thinking, innovation, and adaptability are examples of competencies that can help promote this learning focus (Horňáková et al., 2019; Shet & Pereira, 2021). Managers with these competencies can adapt to new innovations and challenges brought by Industry 4.0 environments and be ready to effectively lead the workforce under these evolving conditions.


Interested in what's coming up at the Smart Factory Institute?

Join us for a 30-minute, virtual information session on Friday, May 13th. The Chattanooga Smart Factory Institute is a business-driven effort guided by the Tennessee Manufacturers Association and will enhance the manufacturing climate in the state, making Tennessee a destination of manufacturing, innovation, and collaboration while providing rich learning and training opportunities for the workforce through new manufacturing technology. During this virtual session, you will learn about the benefits of membership, access to workshops, networking, and other related opportunities.

The Smart Factory Institute is available to all manufacturers, large and small, across the country for innovation and workforce training. Register now for this virtual session.

The Smart Factory Institute hosts 7 Signature Events throughout the year. Get access to the thought leadership sessions from our first two events, Global Robotics and Electric Vehicle Battery Innovations, as well as The Transformation of Manufacturing live sessions. Access includes all recorded sessions and presentation slides (when available by presenter).

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