Industry 4.0 — is there a revolution coming?

Industry 4.0 is a new approach to enabling a genuinely productive future with technological advancements. It is termed as the fourth industrial revolution because of the fourth historic move in history. The first industrial revolution in the 19th century moved humanity from farming to factory production. The second revolution that lasted up to World War I observed the use of steel, mass production, and electrification of factories. The third revolution is characterized by a paradigm shift from analog devices to digital technology that gained prominence from 1950 to 1970. Industry 4.0 is the next big thing that can indeed be considered a revolutionary approach. It is an aggressive use of digital data in the interconnected, smart spaces and devices. According to the estimates by KPMG, the component markets of Industry 4.0 will increase substantially in the next few years, and it will be approximately $4 trillion by 2020. It has even surpassed the business volume of the Internet of Things, which, according to the estimation of Gartner, will be worth $3.7 trillion by 2020.

Background

The presentation of the concept of Industry 4.0 is attributed to a German government memo. The memo was released in 2013 mentioning the term ‘Industrie 4.0’ for the first time. It was a strategic document regarding technology infrastructure, and it aimed for full automation of the processes of manufacturing industry such that there is minimal or no human intervention. The concept gained further prominence when Angela Merkel, German Chancellor, discussed the idea of Industry 4.0 in the World Economic Forum in January 2015. The challenge described the approach as the one that will integrate the online world with the world of industrial production. The German government has taken the lead in implementing this approach, and it has invested €200 million for promoting research and development in this area. The United States has also responded well to the notion of Industry 4.0, and it has established the Smart Manufacturing Leadership Coalition (SMLC). SMLC is a coalition of technology firms, manufacturers, suppliers, government, and academic institutions to implement Industry 4.0 concepts and get the benefits in the short and long run.

Key Features of Industry 4.0

Industry 4.0 will make intelligent use of the Internet of Things (IoT) and the sensors’ data to extract business intelligence essential for producers and manufacturers. The emphasis in this approach is on higher productivity and cost reductions through the use of real-time data and connected environment. A significant challenge in the current context is the management of a huge set of data that is often termed as ‘big data’. Industry 4.0 will deploy robust data analytics systems using the techniques of artificial intelligence (AI), data mining, and big data science. As a result, the systems will be able to produce insights from big data that will be a valuable source of information for senior management. Another critical aspect of Industry 4.0 is a secure communications infrastructure. The infrastructure will ensure real-time connectivity and availability of data. However, at the same time, it will assure that data remains confidential and is not accessed by unintended recipients.

Smart Factories

A significant outcome of implementing Industry 4.0 approach is the emergence of smart factories. These factories will harness information and communication technology for optimizing their supply chains and production lines. All business processes will share the aspects of automation and digitization. Machines will be equipped with the capabilities of self-learning that will be manifested in the form of self-configuration, self-optimization, and self-correction. The techniques of artificial intelligence will enable offering better quality products with superior cost efficiencies. The introduction and implementation of Industry 4.0 concepts will also enhance the employment opportunities, and a report by the UK government predicts that it will create 175,000 new jobs and provide benefits to the manufacturing sector to the extent of £445 billion.

Key Trends in Industry 4.0

Security Controls in the Global Supply Chain

The world is now witnessing a global trade war where the countries are imposing tariffs on imported products to encourage local investors and reduce the pressures on their economies. The U.S. China trade war is a notable example that was also followed by tensed trade relations between Canada and China. The new realities have necessitated looking for alternatives in the supply chain. It is because there may be concerns over technological espionage and trade imbalances.
Consequently, when there is a ban on particular hardware and manufactured technologies from a specific country, the contingency plan should be ready to keep the business operations smooth and stable. In the Industry 4.0 approach, manufacturers will need to assess the impact of the trade wars on their global supply chains. They should reassess the security controls of their industrial systems and scrutinize their imports for potential exploits, whether they are intentional or unintentional.

Readiness Challenge for Industry 4.0

In the context of developed countries, it is challenging to prepare the manufacturing sector for the Industry 4.0 approach. It is such a disruptive and thriving technological approach that it will provide a significant competitive advantage to the countries that will be early takers. In a study, different countries and regions were studied regarding their strategic readiness and implementing enabling technologies for Industry 4.0. The findings revealed the highest preparation of China (92%), followed by Europe (65%), and the United States (44%). It can result in a further increase in the soft power of China and increase the tensions in the trade relationships of China with other countries.

Demand for New Knowledge and Skill Sets

Industry 4.0 enabling technologies will provide new employment opportunities across the globe. However, the manufacturing sector will also experience workforce-related issues. Workers will be required to demonstrate highly advanced and sophisticated skills to accomplish tasks in an Industry 4.0 environment. Hence, the human resources department of the organizations will face this challenge of not only to retain the existing workforce but also to hire a new generation of tech-savvy workers.

Use of Blockchain Technology

Blockchain technology has the potential of integrating the global supply chains because it works with a decentralized ledger and all the transactions are authenticated through a consensus in the blockchain. The supply chain management solution at the enterprise-level supported with blockchain will ensure enhanced security and scrutiny of the processes and provide an enabling environment for the businesses. The blockchain infrastructure has demonstrated limitations regarding scalability and speed. However, it is expected that a few successful implementations will address the shortcomings and enable its widespread adoption. Manufacturers will be able to track the products from the factory floor to cargo ships, manufacturing facilities, and beyond.

Technologies Enabling Industry 4.0

Industry 4.0 technologies will be driven by real-time availability of data, smart devices, and cloud computing platforms. For example, there will be machines autonomously identifying whenever they need spare parts. There will be production systems that will execute their quality control operations. Robots will be used to recognize and move components. All these technologies make efficient use of the concepts of artificial intelligence and edge computing.
One of the examples of such technologies is Siemen’s Digital Enterprise Portfolio. The portfolio is used in every step in the industrial production including product design, product manufacturing, and the use of the product. A virtual form of the product is also created known as a digital twin. Other promising platforms include MindSphere and cloud-based operating system offered by Siemens for the Internet of Things. Organizations are also exploring drone-delivery of the products and using energy-efficient products. Siemen’s Amberg Plant uses the algorithms of artificial intelligence for using data from milling machines and updating about the end of service lives of the machines’ spindles. Edge computing supports full implementation with short transfer paths and real-time data processing.

Conclusions

The future growth of Industry 4.0 enabling technologies will rely on combining digital and industrial expertise. It will require a commitment and collaboration from the companies of all sizes in all industries, but the revolution seems to knock at our doors.