Things you should know about Industry 4.0

February 16, 2017

What is Industry 4.0?

 

Industrial development is a process of constant change, ranging from discovery of steam engines, to building machines, to electrical machines, mass production and now the development of cyber technology based industrial solutions [1]. Industry 4.0 is the new face of manufacturing and production, based on integration of algorithms, cyber-space and wireless communication systems. Industry 4.0 production processes will be handled with technology, robotics and algorithms with minimal input from human operators [2]. Industry 4.0, also described as the digitization of manufacturing and “integration of physical and virtual worlds”, has a potential to change the manufacturing industry greatly. It is a great opportunity that businesses can capitalize on for investment and industrial development in this new era. For example, Ohio has declared itself as an industry 4.0 city in order to attract investment and encourage innovative development in manufacturing [3].

 

Source: Image by Christoph Roser at AllAboutLean.com 

 

Industry 4.0 has also been called “smart factory”, because in Industry 4.0, decision making is done through smart cyber physical system monitors that are operated through algorithms and robotics. In simple terms, Industry 4.0 will create an effective network of communication and collaboration between human and wireless technologies, in production and manufacturing.

 

The current stage of 4.0

 

Industry 4.0 is still in the development stage so experts have been reluctant to call it the new phase of industrial revolution. Industry 4.0 is driven by technologies based on artificial intelligence, advanced robotics, sensors, cloud computing systems, data analytics, “internet of things”, algorithms and smart devices. The vision of Industry 4.0 would be based on creating an “an interoperable global value chain, shared by many companies from many countries” [4].

While Industry 4.0 is growing gradually, there is reluctance from businesses to fully adapt the solutions offered by Industry 4.0, due to the security and cost concerns associated with it. For example, with an integration of web-solutions and wireless communication networks, businesses could face a threat of data security issues, moreover, decreased human oversight in production process is viewed to be a threat to integrity in production process [5]. In addition, there are concerns about increased costs, in case of technical jobs, the threat of loss of jobs for humans, and a concern that it’s difficult to attain the stability and reliability needed for creating an effective cyber and physical communication network. Businesses are facing with major challenges when adapting Industry 4.0:

 

How companies should prepare for Industry 4.0?

 

1. Map out an Industry 4.0 Strategy

 

In order to prepare for Industry 4.0, businesses need to design an effective plan and strategies with strong implementation framework. Otherwise, due to the concerns and threats mentioned in previous sections the process of adaptation could fail causing businesses to incur high costs. Below are some steps that businesses need to prepare:

  • Define clear goals and objectives

  • Analyze the infrastructure requirements, costs and budget

  • Build goal aligned strategies

  • Company’s top leaders should take initiative in making changes for the better

  • Clear goal and expectation setting of employees and leadership

It is necessary for companies to conduct the full analysis of their needs and requirements in order to Industry 4.0 to be a success for them, as without goals and refined strategies, inputs cannot be defined and a target for outputs cannot be set. [6]

 

2. Define the capabilities you need

 

Industry 4.0 is based mainly on availability of three key factors: “internet of things’’, data analytics, and cyber-space. However, the infrastructure required for a fully automated manufacturing process, and “an integration of physical and virtual world”, is not just limited to smart devices. Therefore, in order to prepare for Industry 4.0, businesses need to analyze whether or not they can bear the costs of complete transformation. In addition, one of the businesses need to develop a transparent information system, as machines are initially going to complete the processes through contextualization of the information provided, and there could be a problem with transparency if the virtual copy of information created by machines is based on inaccurate information. Thirdly, human resource needs to be technologically trained in order for machines to assist humans and human to assist machines in their tasks. It is essential for machines to be completed automated so that simple and small decisions can be made by machines independently.  

 3. Start with pilot projects

 

The best way to learn is learning by practicing, and one of the most practical way for businesses to prepare for Industry 4.0, is to learn by initiating pilot projects. Even if the pilot projects fail, businesses can learn from those failures and build strategies that work for them; and with every success companies can gain valuable infrastructure insight, and possibly funding for larger implementation [7].  As mentioned earlier, Industry 4.0 is based on some key factors such as wireless information technology, cyber sensors and powerful data-analytic tools, businesses do not need to adapt Industry 4.0 completely in one go, starting a pilot project for example a small system that is run through Industry 4.0 infrastructure could help businesses in analyzing their needs and requirements for industry 4.0, and then work towards a plan that could provide an effective execution process of Industry 4.0 strategy. For a pilot preparation, businesses could follow the following guideline:

  • Define a narrow specific scope

  • Incorporate an end-to-end concept of Industry 4.0

  • Everything from materials, to sales to customer services should be based on Industry 4.0. The combination of human, processes, and system is the key to success.

  • Build pragmatic designs based on ideas of infrastructure that does not exist yet

  • “Accelerate your digital innovation” by partnering with digital leaders.[8]

You can also learn strategies from businesses and industries that have already adapted Industry, e.g. Ohio developed an Industry 4.0 ecosystem, and declared itself an “Industry 4.0 demonstration city”, and it is encouraging investment and innovation in Ohio’s manufacturing sector. In addition, emerging markets such as India or other countries in ASEAN could benefit greatly from an Industry 4.0 system.

 

Industry 4.0 is coming, there is no question on whether or not businesses will soon need to start adapting it. The question is how can businesses formulate an effective Industry 4.0 adaptation strategy.

 

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References

 

[1] Bernard Marr, a Forbes Contributor- http://www.forbes.com/sites/bernardmarr/2016/06/20/what-everyone-must-know-about-industry-4-0/#1539ceac4e3b

[2] Cornelius Baur- http://www.mckinsey.com/business-functions/operations/our-insights/manufacturings-next-act

[3] Bernard Marr, a Forbes Contributor- http://www.forbes.com/sites/bernardmarr/2016/06/20/what-everyone-must-know-about-industry-4-0/#1539ceac4e3b

[4] Cornelius Baur- http://www.mckinsey.com/business-functions/operations/our-insights/manufacturings-next-act

[5] After World War II, we entered a fourth industrial revolution, with great advancement in electronics." Rose, Arnold M. "Automation and the Future Society." Commentary 21 (1956): 274

[6] Cornelius Baur- http://www.mckinsey.com/business-functions/operations/our-insights/manufacturings-next-act

[7] Cornelius Baur- http://www.mckinsey.com/business-functions/operations/our-insights/manufacturings-next-act

[8] Cornelius Baur- http://www.mckinsey.com/business-functions/operations/our-insights/manufacturings-next-act

 

 

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