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Industry 4.0 - How to Bring Your Company Into the Future

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October 26, 2021
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5 minutes
Lynn's diverse perspectives on business stem from her extensive experience as a management consultant - her role as a beloved wife, mother and grandmother adds further depth to her insights.

Industry 4.0 has been described as the vision of industrial production of the future. It is about the future of business technology and the power of new technologies to transform manufacturing.

The Industry 4 revolution, or the fourth industrial revolution, is a developmental stage in the management and organization of the manufacturing industry. It was preceded by Industry 1.0, 2.0 and 3.0. – and Industry 5.0 is already on the horizon.

Firstly, let’s define cyber-physical production systems and their effect on manufacturing and then look at how companies can remain competitive.

Cyber-Physical Systems: The Building Blocks Of Industry 4.0

Industry 3.0 was about automating processes and sections of manufacturing plants. The Industry 4 revolution will link all of these separate parts together into an optimized whole.

Cyber-physical production systems (CPPSs) are online communication networks between machines. Moreover, mechanical and electrical components of manufacturing operations communicate with each other, much as people do on social networks.

These so-called smart machines share internal information on issues such as:

  • Faults and technical problems
  • Changes in orders or demand levels
  • Stock levels
  • The coordination of processes and deadlines

There is a smart network of links between ICT systems, machines, products and people across the entire value chain and the product life cycle. It majorly includes external fleets, plants, and networks.

Basically, there are two types of integration that define smart factories:

  • Vertical integration: It includes connected units on the factory floor, and there are links to the rest of the business – Sales, HR, Finance, Customer Service, etc.
  • Horizontal integration: It includes connected parts of the supply chain, within the operation, across multi-sites, and with third parties, both up and downstream. Moreover, the game-changer is when external parties in the supply chain have similar levels of integration.

Moreover, the integration enables collaboration, constant communication and visibility, and flexibility in production.

Industry 4.0 is more than just a flashy catchphrase. A confluence of trends and technologies promises to reshape the way things are made. Cornelius Baur and Dominik Wee, McKinsey & Company

Critical Technologies For The Fourth Industrial Revolution

These are some of the technologies that are predicted to drive productivity and growth in manufacturing operations:

  1. Big data and analytics
  2. Artificial intelligence, machine learning and natural language processing
  3. Nanotechnology
  4. Autonomous robots
  5. Drones
  6. Simulation and augmented reality
  7. The Industrial Internet of Things
  8. Cybersecurity
  9. The cloud
  10. Additive manufacturing (3D printing)
  11. Augmented reality and simulation

Many of these technologies have been around for a while. But now, experts are integrating them to form smart manufacturing execution systems.

Moore’s Law And The Urgency To Change

Implementation of change is becoming exponentially faster.

Moore’s Law predicts the speed of technological change and growth. The general rule is that there is a doubling of technological development every 18 months. Some technologies start slowly, but the exponential curve means they rapidly reach disruptive levels.

This basically means if your company hasn’t picked up the technology, you will rapidly be left behind.

The Human-Machine Interface

Machines do not replace human decision-making or responsibility for production strategy and implementation. However, devices collect data from multiple sources for human judgement. Simply, AI and machine learning will incorporate feedback into routine operating procedures, making human intervention less necessary.

Even Elon Musk, the CEO of Tesla, has admitted that “excessive automation” can be a mistake. He has tweeted that “Humans are underrated.”

Industry 5.0

Before we can catch our breath, Industry 5.0 will be upon us. It will drive a change in the interaction between humans and machines. The goal is to combine machine intelligence with human creativity, adaptability, and problem-solving ability.

The Effect Of Industry 4.0 On Manufacturing Operations

Automation and data exchange across connected devices is the driving force of change in manufacturing. Systems can now predict failures, configure themselves without downtime, and adapt to changes. In the long term, production will be self-managed and self-organized.

There are several projected outcomes.

  • Fully integrated, automated and optimized production flow
  • Processes that are faster, more flexible, safer, and more efficient
  • Increased productivity
  • Higher profitability
  • Industrial growth
  • A changed workplace profile
  • Changed relationships among suppliers, producers and customers
  • Increased competitiveness for companies and regions

Higher Productivity

Higher productivity will come from eliminating errors and risks, production of larger quantities of products, reduction of downtime, and the possibility of 24/7 output without the need for shift changes and handovers.

Improved Safety

Safety is an essential factor in any manufacturing environment. Steps to protect workers:

  • Reducing defects and errors,
  • Using sensors to position them safely in relation to machinery, and
  • Remote monitoring and data analysis to identify risks and initiate immediate reactions and interventions.

Greater Flexibility

A benefit of robots and connected devices is much higher variability in the production process and greater flexibility in response to fluctuations in demand.

Robots can also produce individualized products to customer specifications – this is a game-changer.

Higher Profitability

More economical production and higher profits will come from

  • Process improvement and operational efficiency
  • Reduced stock levels and delays waiting for stocks
  • Reduced waste (e.g., by switching off unused components)
  • Mass production
  • Reduced time to market, and
  • Overall higher productivity

Smart manufacturing factories will have a competitive advantage, attracting the best customers and growing their business.

A Changed Workplace Profile

Industry 4.0 will lead to substantial job losses for low-skilled physical labor. Robots are better at precision work than humans. Because, they are more consistent.

It will also affect workers in areas such as logistics, customer communication, and administration.

However, companies are employing many people in positions that did not exist five or ten years ago, and are also creating many more such jobs.

Automated smart factories, established close to home, will create industrial growth points and employ well-educated locals or skilled remote workers.

One of the outcomes is pressure on industries to reskill and upskill their employees and education systems to equip students for future industry needs.

How Do Companies Bring Themselves Into The Future?

Industry 4.0 is a journey towards achieving vertical and horizontal integration.

For example, Manufacturing companies – especially small and medium-sized enterprises - may not have the financial capacity to do all of it. Moreover, legacy systems may not be compatible with new digital technologies.

Perhaps, a phased approach should be taken, starting with robotic process automation (RPA), predictive maintenance systems, or introducing cloud-computing.

It may be advisable to get expert advice. If you feel a bit at sea, you might consider contacting a digital transformation consultant to help you set a course.

Industry 4.0 – The Future of Business Technology

The Industry 4 revolution is driven by online communication networks between machines, systems and people, both within your organization (vertical integration) and along your entire supply chain (horizontal integration).

It also defines the future of business technology and stands to transform the manufacturing industry completely.

Companies that wish to remain competitive should take at least the first steps on this technological journey. Both speed and scope of change are on an exponential curve – and it’s easy to be left behind.

If you are interested in assessing the suitability of Consultport to assist you with your digital transformation needs, get in touch with us today.