McKinsey and Company estimate that as of 2015, around 64% of manufacturing processes worldwide could be automated using current technologies. This equals a whopping 478 billion work hours wasted and $2.7 trillion that could be repurposed.
That’s a lot of unexploited opportunities. But nothing compared to the impact Industry 4.0 and its associated technologies could have on manufacturing efficiency. This article provides a definitive Industry 4.0 definition and explores how Industry 4.0 technologies will transform the world and every business in it.
Industry 4.0 Definition
Industry 4.0 is a “fusion of technologies that is blurring the lines between the physical, digital, and biological spheres.”
That’s the definition provided by Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum. He was the guy that came up with the term, Industry 4.0, in his book, The Fourth Industrial Revolution.
Schwab provides an interesting Industry 4.0 definition, but it’s kind of vague. If you want to get the full story, you have to read the book. But that’s 192 pages, and most won’t, so let me summarize:
Industry 4.0 means automation taken to the extreme, where humans take a back seat and artificial intelligence steps in. Efficiency and safety will be elevated to unthinkable heights while costs will reach all-time lows.
How is this all possible? It’s the result of a slew of new Industry 4.0 technologies such as machine learning, IoT (internet of things), M2M communication (machine-to-machine), and the AI mentioned above.
This constellation of Industry 4.0 technologies is set to converge. This will lead to the dawn of smart factories full of smart machines that self-monitor, learn, and optimize without human input.
The smart factory serves as a perfectly balanced connected system. But this connectivity cannot be contained by the walls of the production plant. Smart factories will be interconnected with other smart factories, which will themselves be interconnected to supply chains, warehouses, and fulfillment centers. Entire industries become interconnected, “self-driving” networks.
Industrial Revolutions: A Brief History
Industry 4.0 (aka the Fourth Industrial Revolution) is the latest in a (short) line of industrial revolutions (outlined below). A common thread ties these various revolutions together–a thirst for efficiency.
The First Industrial Revolution occurred in Britain in the late 18th century. Water and steam power replaced human and animal resources to make the mass-production of finished goods possible for the first time.
During the Second Industrial Revolution (late 19th century to early 20th century), manufacturers used new sources of power (such as electricity and gas) to create assembly lines. The telephone and railroad expansion catalyzed production speeds further.
The Third Industrial Revolution began and flourished in the mid-20th century. This was driven by the rise of computers and the birth of the internet.
The Fourth Industrial Revolution isn’t fuelled by the human hand, steam, or even fossil fuels. It’s fuelled by data, which is gobbled up by powerful algorithms and used to solve problems so complex they would take a team of human geniuses millions of years to compute using mindpower alone.
How Industry 4.0 Will Change the World
Industry 4.0 technologies will bring forth unprecedented levels of efficiency, productivity, and growth. According to a study by PWC Global, AI alone will lead to a $15.7 trillion expansion in the global economy by 2030.
Industry 4.0 will change the world. But how? Here are some lesser cited examples:
Greater Information Transparency
There will no longer be valuable information squirreled away in the recesses of employees’ minds and locked in outdated spreadsheets. In the world of Industry 4.0, stakeholders can view every link in every interconnected system and analyze the data that passes through it, seeing risks and opportunities before they present themselves.
Optimal Decision-Making
At the core of a functional and productive organization is the need for an optimal decision-making process. And decision-making is only as good as the data on hand. Industry 4.0 provides means to capture, store, and analyze vast quantities of data at scale (big data.)
Higher Demand for Specific Skills
One of the biggest fears surround AI-driven automation is that it will put millions of hard-working people out of work.
The reality is that while specific jobs–like truck drivers–will most likely disappear, Industry 4,0 will create a host of new, safer, better paid, more fulfilling jobs in their stead.
Demand for computer scientists, software developers, software quality assurance analysts, and electrical engineers (to wire everything up!) will rise.
Improved Safety in the Workplace
Automation has drastically improved workplace conditions. With Industry 4.0, we’ll see a continued reduction in work-related injuries and accidents. Machines will be able to perform the riskiest tasks and predict accidents before they happen.
Industry 4.0 Technologies that Will Shape the Future
The following innovative technologies are at the forefront of Industry 4.0. Adopting these Industry 4.0 technologies in different but complementary combinations will enable manufacturers to conduct the different phases of their respective workflows more efficiently.
AI and Machine Learning: Machines share data, analyze it, get smarter over time, and then use these learnings to carry out creative tasks.
IoT: Networking of smart objects utilizing the cloud, software, and sensors. This is how the machines share data.
3D Visual Technology: Construct 3-dimensional models that allow for realistic virtual experiences (VR and AR), allowing manufacturers and customers to envisage their products better.
Additive Manufacturing (3D Printing Technology): Creates a 3-dimensional object–layer by layer–using a computer-generated model. An additive manufacturing facility requires far less physical space and financial outlay than a traditional manufacturing plant. It also makes it more profitable to produce smaller production runs (even batches of one.) This will lead to localized production and greater competition.
Advanced Robotics: Robots (autonomous machines) and cobots (robots that collaborate with human operators) will carry out a range of non-repetitive, creative tasks, boosting efficiency and minimizing human error.
The Bottom Line
By now, you should have a firm grasp of the Industry 4.0 definition, the advantages, and the technologies at play. But are you ready to benefit?
A survey of 1,600 C-level executives from 19 countries indicated that only 14% of companies are confident they’re prepared for the oncoming Revolution.
If you haven’t already, now is the time to develop a tailored roadmap outlining how your company can be one that benefits from Industry 4.0, rather than one of the many that falls by the wayside.