Nuevo Leon government is leading the push for Industry 4.0

With an eye on the long-term trends towards automation in manufacturing, Nuevo León’s government is looking to take on a leading role within Mexico to develop and adapt the state’s industrial sector, and to increase productivity and competitiveness, by shifting its focus towards research and development (R&D), innovation and higher value-added processes.

In December 2017 the Chamber of Industry of Nuevo León (Camara de la Industria de Transformacion de Nuevo León, CAINTRA) estimated that the industrial sector will grow by nearly 3.6% in 2018, while also creating 60,000 new jobs. At a public event in February 2017 Nuevo León’s then-governor, Jaime Heliodoro Rodríguez Calderón, said that Mexico’s industrial firms need to coordinate with the government to ensure long-term competitiveness. “If we work together we can strengthen the nation’s industry,” he said. “That’s the solution to competing in a globalised world.” NUEVO LEÓN 4.0: The shift towards advanced manufacturing is headlined under the government initiative Nuevo León 4.0, which was launched in May 2017 and focuses on new technologies and business processes, such as the internet of things (IoT), machine-to-machine communication, artificial intelligence, digital manufacturing, big data, 3D printing and advanced simulated design. These technologies fall under the umbrella of a world-wide trend known as the fourth industrial revolution, or Industry 4.0.

The goal of the programme is to help Nuevo León’s industrial sector better compete with companies and clusters in world-leading industrial economies, through the development of smart factories, which will maximise production flexibility and efficiency through innovation and integration. “In Nuevo León we have great opportunity to push the transition from “made in Mexico” to “innovated in Mexico”,” José Alfredo Galván, assistant dean at Regiomontana University, told OBG. “That would boost economic growth and increase productivity, and by doing so, we could offer smart products, processes and services, assisted by the advanced technologies associated with Industry 4.0.” Francisco Garza, rector at Pedro de Gante University, notes that all sectors, not just industry, need to adapt to these new technologies. “Digitisation of the economy is no longer an option; it is fast becoming a requirement for companies to adapt to Industry 4.0, regardless of the sector,” he told OBG.

Government Push

Thus, Nuevo León’s state government has been working to implement a long-term growth strategy that focuses on higher value-added supply chains and increased competitiveness and productivity in order to shift the economy away from lowcost, labour-intensive manufacturing.

The Nuevo León 4.0 programme was launched in April 2017 and brings together leaders from the government, the private sector and local universities. During its first phase, participants aimed to increase awareness of the strategy by engaging key stakeholders in the state’s industrial sub-sectors, such as automotives and autoparts production, electronic appliances manufacturing, agro-industry, health care and education.

At a press event in May 2017, Fernando Turner Dávila, the state secretary of economy and labour, announced the creation of a MX150m ($8.1m) fund to support innovation within businesses. “The goals of Nuevo León 4.0 include developing industry, employment and high value-added labour skills, as well as developing an ecosystem to reposition the state as a national and international benchmark for Industry 4.0,” he added.

In 2018 the initiative is moving forward with concrete developments, such as the creation of new R&D centres. The effort is coordinated by an executive board, which meets every two months, and project-focused task forces, which meet every week.

Industry Leadership

Although the initiative is spearheaded by the government, industry heavyweights are also taking on a critical leadership role. Private companies are tasked with supplying capital to support the Industry 4.0 agenda, as well as working to define the agenda and set specific goals, with companies in the automotive, aerospace and appliance manufacturing segments pushing the hardest.

The Nuevo León 4.0 executive board is chaired by Leopoldo Zedillo, CEO of Metalsa, a Monterrey-based auto-parts manufacturer. The board is also made up of the state’s four leading universities, as well as the state secretaries of education and of economy, the head of the Mexican National Council for Science and Technology, and the head of CAINTRA. The initiative brings together representatives from the government, universities and the private sector; however, it is the latter that will take the lead when it comes to embracing and implementing aspects of Industry 4.0. For this reason, the Nuevo León 4.0’s executive board is chaired by the CEO of an industrial firm, rather than a state official.

The Nuevo León 4.0 strategy’s task forces help coordinate activity between local manufacturing heavyweights, such as Metalsa, Cemex (building materials), Ternium (steel), Nemak (automotives), Vitro (glass), Airbus México (aircraft) and Xignux (electricity, food and infrastructure), that are already working to implement Industry 4.0 in their operations.

In the short term IoT is the first aspect of Industry 4.0 that manufacturing companies are beginning to incorporate in their operations. “The implementation of the IoT has advanced the most,” Jesús Vázquez, professor of engineering management at the University of Monterrey, told OBG. While companies are also looking for ways to implement 3D printing, virtual reality and simulated design into their operations, currently the main area of focus is adding sensors to machines in order to better coordinate and monitor production. “It is just starting, but growth will be exponential,” Vázquez added. Abraham Tijerina, the director of innovation at Metalsa, also sees the potential of IoT. “IoT can be pushed right now,” he told OBG. “The returns can be realised from the moment you turn on the machines.” As companies in the region begin investing more and more in machine-to-machine communication, they will be able to gather real-time data on production and realise benefits from big data, to maximise efficiency and, in the medium term, to begin using artificial intelligence to increase automation processes and introduce modern smart factories.

Looking Ahead

Even though the government and industry are pushing for the modernisation of manufacturing, the shift towards Industry 4.0 is still likely to be gradual. Some critics argue that the global trend towards automated manufacturing could end up undercutting the competitiveness of countries, such as Mexico, that still derive part of their advantage through low labour costs. However, Mauricio Garza, CEO of industrial park Interpuerto Monterrey, emphasises the benefits of automation over the long term. “If Mexico wants to compete on cheap labour, we’ll lose,” he told OBG. “We have to prepare for new challenges, and Industry 4.0 will be the future of manufacturing.”

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The Report: Mexico 2018

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