Smart Factories Need Intelligent Insurance Protection
A 20% growth over five years is anticipated in the smart manufacturing platforms’ sector, with experts at the Capgemini Research Institute  predicting that the global economy could be boosted by smart factories to the tune of $2 Trillion over the same period. But what do employers seeking to integrate such technology into their current processes and business culture need to consider, if this prediction is accurate?
Online grocery retailer, Ocado, has already been attracted to the benefits of using smart processes, using 1000 super-quick, wireless-controlled robots in its picking facility, who can pick a 50-item order in just five minutes. This cutting-edge warehousing and distribution system, designed by Cambridge Consultants, has much to admire.
Significant investment would be required before others could operate in this fashion and there are other things to take into account too. IT systems form the spine of many businesses and harmonising these with Operational Technology (OT) systems, required as monitors of smart devices and digital platforms, could be tricky. Humans oversee the IT and they could be unhappy about robots replacing their factory-floor colleagues.
Cambridge Consultants have suggested that smart technology could one day be used to control the entire supply chain. Notably, they also highlight that OT systems should help businesses using them to address the organisations needs.
Analysing processes and cultures should precede any adoption of smart technology, to assess whether there is a real need, according to Derek Long, Head of Telecoms and Mobile at Cambridge Consultants.
Insurance should also be considered. Cultural and procedural change can impact heavily on employees and be a hotbed for employment disputes which result in drawn-out and costly legal cases.
There is also a greater risk of a cyber attack, as firms become reliant on smart technology. Disrupting supply chains can be a target hfor hackers. But that is not all. A factory or distribution centre could suffer a fire or major weather impact that leaves an entire workforce of robots exposed to possible damage or destruction.
Anyone considering these new technologies needs to consider how they impact on risk and whether new insurance protection is required. The sum insured may also need to be changed. A smart business’s insurance safety net needs to be just as strong as that of other firms.
If an introduction of smart technology is on your business agenda, you would be well advised to talk through your insurance options with a friendly and knowledgeable broker. If you need help with this, please contact us.