Disruption is associated with disturbances triggered through a change, and has been happening for a very long time. Reasoning for disruption lies not only in technology innovation, but is also governed by other factors like industrial, socio-political, financial and environmental aspects.
Each factor of industrial disruptions has a significant impact on our industries, creating new opportunities and new ways of working with value added products and services. However, many industries with high inertia that comes out of the conventional pattern perishes. Thus, a balanced and calculated approach is required to sustain on any disruption.
This article is aimed to help readers understand disruption and its analysis by the industry and strategy experts with the hope that future disruptions may be predicted and understood with a structured approach planned to sail through it.
What is Disruption?
Disruption has been coined by several different words to describe the areas in which it occurred. In science and technology, it is expressed as "technology innovation," while in an industry like Industrial Revolution it is referred to as "Renaissance," and in the financial sector as "financial crash" or "boom."
The Renaissance, which occurred between the 14th to 17th century in Europe, gave a rebirth to the freedom-loving urge of people to challenge the conventional past and come up with subtle changes and rebirth in the approach towards philosophy, science and literature.
Following, which Industrial revolution coined as "Industry 1.0," came the science and technology to harness steam and use the same to automate mechanical work. This was a paradigm shift of "Way Of Working" (WOW) with ample benefits to mankind. Then came the rolling out of other Industrial revolutions as follows:
- Industry 2.0—Inventing and harnessing the power of electrical energy)
- Industry 3.0—Putting computerized automation to work with accurate process control and minimizing human involvement)
- Industry 4.0—Establishing a connected world with the backbone of cyber-physical system
- Industry 5.0—With the theme of man-machine collaboration, including sustainable manufacturing with artificial intelligence (AI), Big Data and the Industrial Internet of Things
- Industry 6.0 — This is still yet to come, and will include advanced robotics, machine learning and augmented reality including capability for interstellar operation
Thus, disruption is constantly happening is a multi-layered process encompassing all the aspects which are linked with the society—be it social, cultural, political, economical, educational, etc. As an example, our initial requirement of the mobile phone was aimed towards a very stable wireless audio communication and connectivity across the globe, and we saw how the very unstable landlines and Telex or Telegrams perished.
This disruption evolved from societal requirements, and industry created it by packaging of various related technologies like wireless network backbone, telecommunication hardware(SIM Card), semiconductor hardware, etc. Now, the mobile manufacturers packaged further intelligence with video communications including conducting meetings , multimedia support, advanced photography and scanning. This will erode conventional businesses with Xerox machines, conventional, cheaper cameras, etc. The driver for this disruptive concepts is the industry, while the benefits came to the society—impacting conventional business.
The first phase of Disruption was felt by the Austrian born Economist Joseph Schumpeter. Schumpeter looked into the potential of growth and opportunity—defined the same as Creative Destruction (in early 20th century), where old methodology was abolished, giving place to the new "Way Of Working" (WOW). Disruption thus eliminated conventional standardized approach, and allowed creative thinking to move ahead.
The second phase of Disruption was professed by the famous Harvard School Professor Clayton Christensen, who understood that then the properties of disruption had changed . Initially innovating simpler areas at the lower end of the market, where it facilitates the lower and middle class users with new tools with cheaper budget and limited features, generating a new group of users with possibility of a big market volume. Later, adding advanced features and facilities, it invaded the upper end, which marked challenging the established players. He named the disruption "Disruptive Innovation."
The third stage of Disruption is the current phase through which we are passing , where disruption is spontaneous with a much smaller lifecycle. A structured approach is necessary to anticipate the incoming disruption , understand its areas of impact and the proactive counter measure and strategy to covert Disruption to new opportunities.
Strategic Approach for Disruption
The basic approaches to sustain Disruption require total understanding of the properties and their multi-dimensional impacts the various societal domains. From the analysis and study report of various economists and social scientists , the following nature of Disruptions are understood.
While the factors driving disruptions and their impacts are identified, it must be considered that each of the disruptions are unique and are characterized with constantly changing drivers. Thus, addressing the disruption can never be a fixed process but continuous analysis of the patterns and aligning the adoption process with agility in reaction will define sustainability. Both Industry 4.0 and 5.0 had defined various changed processes and stimulated innovative packaging or collaboration between various distinct technologies to create a platform for connected and sustainable business. The same is require to be understood and adopted.
- The transfer "Function of Disruption" is nonlinear and rises exponential with delayed significant impact
- The Disruption has multifunctional and multidimensional impacts—hence the impact analysis is dependent on the magnitude and the interrelationships between the domains impacted/to be impacted by disruption
- Constant risk analysis and mitigation plan, initial small scale change and based on market success scale up. Back up plan for alternative process in case of sudden unanticipated risks
- Digitization of the entire value chain comprising, data-acquisition, analytics, market intelligence, engineering, supply chain logistics, production process, quality control, scheduling, energy efficiency and elimination of leakage loss, packaging and customer feedback
- Addressing both low-end and high-end products
- Flexibility in Plant Layout (towards layout-free engineering) to quickly customize production-line for changed requirements
- Agile approach to first time launch new product ahead of the market launch with digital marketing to be the market leader
- Total Automation of the process connectivity and visibility of the entire process. Use the power of IIOT based model with Asset Performance Management and Product Lifecycle Management for high availability of plant and equipment and customer connectivity and attachment
- Man-machine collaborations by leveraging collaborative robots ("cobots") to enable better precision, faster execution, personification of products and minimization of wastes
- Enabling a connected process between plants, supply chains, original equipment manufacturers (OEMs), customers and stakeholders to ensure quality, availability of production, feedback, and customization of products as well as absolute visibility throughout the process
- System requirements to ensure an error-free cyber-physical platform, with strong and continuously upgraded security standards
Thus, disruption is spontaneous and industries are required to be agile, flexible and knowledge-driven to constantly redefine strategy and sail through rough terrains.