Industry 4.0: Technologies, Outcomes, and the Future of Manufacturing


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The Internet of Things (IoT) is not new – it has been impacting everything from how we exercise to how our cars operate for more than a decade. A newer phenomenon, one that has larger implications for IoT and industrial operations alike, is Industry 4.0 – the next evolution of smart manufacturing and digital technologies.

What is Industry 4.0?

The term “Industry 4.0” is used to signify the beginning of the fourth industrial revolution – the previous three being mechanical production, mass production, and then the digital revolution. It could be argued that Industry 4.0 is simply an amalgamation of the three previous eras in manufacturing, but Industry 4.0 is poised to be much more impactful than that.

Outlined in the book The Fourth Industrial Revolution by Professor Klaus Schwab, Industry 4.0 encompasses “new technologies that combine the physical, digital and biological worlds, impacting all disciplines, economies and industries. These technologies have great potential to continue to connect billions more people to the web and drastically improve the efficiency of business and organizations.”

In its application and universal understanding of Industry 4.0, this term is most directly related to the world of manufacturing – you could even call it Manufacturing 4.0. In return, this industry is seeing growth and transformation unlike ever before. In its application to manufacturing, Industry 4.0 is: The growth of automation and data technologies powered by the internet of things (IoT), the cloud, advanced computers, robotics, and people. The seamless integration of software, equipment, and people increases the speed, reliability, and flow of information between all systems of a manufacturer.

Industry 4.0 Technologies

Industry 4.0 has made the smart factory reality, thanks in part to the widespread use of digital technologies in formerly manual processes. Connectivity, automation, and optimization are driving the Industry 4.0 digital transformation. But many technologies are working together to realize the full potential of the manufacturing 4.0 movement.

1 Industrial Internet of Things (IIoT)

IIoT is when interconnectivity and collaboration of data, machines, and people in the world of manufacturing. Essentially, it takes IoT – sensors, machines, and data all connected and interfacing seamlessly – and applies it to manufacturing. Every aspect of the manufacturing operation can be connected to the IIoT, and the data it creates can be leveraged into optimizing efficiencies across the manufacturing operation.

2 Automation

The ultimate goal of a connected factory is to maximize efficiency, therefore maximizing profits. To achieve that, automation must be adopted into some or all of the manufacturing processes. Automation, via robotics or AI, is made possible by the interconnectivity and communication that occurs across an Industry 4.0 optimized facility.

3 Artificial Intelligence

Artificial Intelligence and its subset of machine learning are practically a requirement for an Industry 4.0-enabled smart factory. The whole premise around this new industrial revolution is to take out manual processing, and AI is the primary tool to use in its place. AI can use the data generated from a connected factory to optimize machinery, reprogram workflows, and identify overall improvements that can be made to drive efficiencies and ultimately revenue.

4 Big Data & Analytics

Because every function of the manufacturing operation is being monitored and generating data, there are tons of data to sift through. However, big data analytics systems can utilize machine learning and AI technologies to quickly process data and give decision-makers the information they need to make improvements across an entire manufacturing operation.

5 The Cloud

Manufacturers don’t have or want to use the massive amount of space required to physically store vast volumes of data created in an Industry 4.0 operation. This is what makes cloud storage and computing an absolute necessity and key cog in a connected factory. Cloud usage also allows for a single source of truth and data sharing across the company, at lightning speed. Lastly, cloud storage also allows for remote access and monitoring of all data and machine operating systems, giving great visibility into operations and efficiencies.

6 Cybersecurity

Because every touchpoint in the manufacturing operation is connected and digitized in Industry 4.0, there is an extra need for robust cybersecurity. Manufacturing machinery, computer systems, data analytics, the cloud, and any other system connected via IoT should be protected.

7 Simulations

Having the ability to forecast outcomes is one of the biggest game-changers in the age of Industry 4.0 and manufacturing. Before the digitization of the factory, changing over a product line and optimizing its speed and production was somewhat guesswork and always imperfect. With today’s advanced simulation models powered by IoT data and AI, manufacturing operations can optimize machinery for their next product run, thereby saving time and money.

Industry 4.0 Outcomes

Industry 4.0 is having an international impact, in terms of connectivity across continents and the way it’s transforming our global economies. Deloitte Insights reported that these new technologies helped to create 3.5 million new jobs between 2001 and 2015 in the United Kingdom alone.

These changes are helpful to understand on a wide-reaching scale, but how do they impact the individual manufacturer? Here are five of the biggest and most noteworthy benefits manufacturers can expect from Industry 4.0.

1 Optimized Processes

All of the Industry 4.0 connectivity – sensors, IoT, AI, etc. – services one primary purpose: optimizing manufacturing processes. Automation allows manufacturers to work faster, data analytics empowers leadership to make data-driven decisions to increase efficiency, predictive maintenance means less downtime for machines, and monitoring systems provide real-time yield optimization across the operation.

What does optimized processes and maximized efficiency actually mean to a manufacturer? In the case of Industry 4.0 and digital transformation, it translates to revenue increases and improved customer service. When manufacturers are able to get the most out of their production with sensor-monitored machines, all while giving personalized attention and fast service to customers via AI and field service, they can truly see the benefit of the connected factory.

2 Greater Asset Utilization

Industry 4.0 allows for greater flexibility across the manufacturing operation, which translates to better asset utilization and therefore a potential for revenue increases. Think of automation – autonomous mobile robots (AMR) can handle menial tasks such as product transportation, leaving skilled human workers to do more higher-value tasks.

3 Higher Labor Productivity

When employees feel more secure on the job, they can focus better and accomplish more tasks during the day. Worker safety is one of the biggest benefits of IoT solutions on the manufacturing floor – sensors on site and worn by workers are monitored constantly to ensure a safe and healthy work environment.

Industry 4.0 is also expanding the skills repertoire of many manufacturing workers. As new technologies come into the operation, workers are learning new skills that improve operational efficiency and their skillset. Think of cobots (collaborative robots) – people and robots working alongside each other in manufacturing workflows, maximizing efficiencies and revenues.

4 Supply Chain and Inventory

IoT-enables sensors and data analytics give manufacturers insight into the entire supply chain and production process. This level of visibility combined with AI and machine learning capabilities means that supply chain optimization can be achieved in real-time. Some are even calling it Supply Chain 4.0, defined as “the application of the Internet of Things, the use of advanced robotics, and the application of advanced analytics of big data in supply chain management: place sensors in everything, create networks everywhere, automate anything, and analyze everything to significantly improve performance and customer satisfaction.”

5 After-Sales Services

The predictive analytics, virtual reality, and remote monitoring that are pillars of Industry 4.0 also translate to the consumer space after manufacturing. While this doesn’t directly impact a manufacturer, if they create goods that are capable of IoT connectivity, they can drastically improve customer and field service offerings.

Top-notch customer service is a competitive differentiator for many companies, and connected equipment in field service is helping to improve the levels of customer satisfaction. With connected devices, manufacturers can monitor product performance, scheduling maintenance before an issue arises and therefore preventing any sort of customer dissatisfaction.

So just how important is customer service? According to the report State of the Connected Customer, 80% of customers say the experience a company provides is just as important as its products or services.

The root of Industry 4.0 is connected devices and people, all powered by robust technology solutions and data analytics. For companies looking to begin their digital transformation, look no further than the full suite of manufacturing products from Hitachi Solutions. From the IoT Service Hub to Dynamics 365, our products are built specifically for manufacturers looking to stay competitive in their newly digitized industry. Contact our team today to get started.