The future of manufacturing, a suite of digital technologies grouped under the name Industry 4.0, will be led by the Internet of Things smart devices and powerful algorithms. But although manufacturers need to embrace those technologies, they need to take care when deploying them, because they can pose serious dangers if not handled properly, warns the Gartner report, “How Things and Algorithms Change Manufacturers’ Business Models.” In this blog post, I’ll cover those dangers as outlined in the report, and offer Gartner’s advice about how to handle them.
Overall, the report warns, “Implementing these technologies involves risks such as data privacy, security, usage, and flaws in data or algorithm logic that can affect companies in unexpected and even unwelcome ways.”
It points out the dangers of relying too much on using algorithms to make decisions, particularly when the underlying data on which the data is based is problematic or inaccurate. The report notes:
“There is an ongoing debate in many parts of the world, particularly in the United States, about using algorithms for everything, from predicting consumer buying habits, to determining race and gender correctly, to flying military drones. A flaw in those algorithms can have life-changing impacts on customers, product designs and society at large.”
As one example, the report says that a healthcare vendor’s algorithms “had produced erroneous and unsafe cancer treatment recommendations in multiple cases. The company determined that the flaws could be traced to ‘synthetic’ data — engineers had trained the AI on hypothetical data rather than on real-world cases.”
Beyond that, the report pointed to algorithms that were used to cheat on emissions standards for diesel-fueled cars, and that led to a plane crash.
The report recommends that to make sure that problems like these don’t recur, manufacturers should take care to take “bias and statistical significance” into account when creating algorithms. It adds, “It’s always good to double check with a statistician, an actuary who deals with risk and uncertainty, and subject matter experts, depending on the dataset, to avoid mishaps.”
Smart devices and their associated data can cause problems as well, the report says. It says: “Devices and data may not be secure, may be hacked or may reveal more information than originally intended.”
To lessen the likelihood that may happen, the report says manufacturers should “Protect your company from liability and exposure by implementing strong data security policies that include data ethics.” And it adds that manufacturers should “Establish strong internal data governance policies by addressing what information should be collected, how it should be stored, analyzed and retained, what decisions should be made based on its analysis, and by whom/where.”
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