Industry 4.0 is much more than Smart Factories

Beatriz Sanz Baños    23 November, 2016

We should start by explaining what Industrial IoT (IIoT) – also known as Industry 4.0 – is. It is undoubtedly as much a revolution as the three previous revolutions were. But this revolution is quieter and trickles from certain businesses to reach the entirety of organizations. In the digital era, changes move faster than in previous periods.

The term Industry 4.0 was coined by the German Academy for Science and Technology (acatech) a association that protects the interests of key players such as Bosch or Siemens. The term chosen by acatech has become very popular in the industry and describes tasks that were being carried out before there was even a term to describe it: to add intelligence to industrial processes.

Industry 4.0 Evolution or revolution?

Obviously, some industries – like the automotive industry, for instance – have been working on improving efficiency in the manufacturing process for quite some time. Automation in these sectors is exhaustive. Industry 4.0 is a holistic reshaping of the industrial plant, taking into consideration that this does not only include the assembly premises but the supply chain, as well of the final distribution and so on. These centres combine technology as a core factor both as means to achieve connectivity and through automation, optimizes the organizations resources. An initial conclusion is that Industry 4.0 goes beyond the traditional boundaries of the Smart Factory where the product is assembled. It now integrates the raw material supplier, logistics deliveries, the workers (who are now connected), etc. allowing the whole process to flow in a streamlined and connected manner throughout the different stages.

Sometimes, IIoT is called the fourth industrial revolution. In a certain manner, it is safe to say that every evolutionary step in the history of industrialisation has had a revolutionary component that stimulates a part of the productive process. The first factor addressed was energy. When chain production was developed there was an effort to improve productivity. The progressive decline in cost and improvements in automation spurred the search for better quality. Finally this new transformation that Internet of Things has brought aims to achieve more efficiency in the processes and to strive for a zero manufacturing defects scenario. Extreme efficiency is undoubtedly a prime goal for Industry 4.0. Business areas such as the automotive industry achieve a 120-130% efficiency thanks to automation allowing for an end to end control of the process. This trend towards minimum cost and maximum quality is a challenge that manufacturers need to address in a globalized market that is taking competitiveness to a new level.

Technology was not only created for the benefit of industrial use. However the industrial market has been the most keen to embrace and maximize these advancements. Certain technology allows to improve efficiency; the development of electronics, communications, processing power, analytical capacity, etc. are key components of the IoT. These elements have also been put to use by the industrial business to achieve a higher degree of efficiency. To illustrate this with an example, 4G was not developed to improve Industry 4.0, but it benefits from the technological advancement of communications. Another example is miniaturization. It was not developed for industrial use, but for consumer electronics, that required smaller and easier-to-use form factors. However IIoT has capitalized on it to achieve more efficiency – for example using smaller and more efficient truck sensors. There is a transversal benefit for the IIoT allowing it to make the most of technology which was developed – or meant for – other business areas and industries. 

Looking towards the future, this technological reinvention of different industries will continue its unstoppable drive in the years to come. This first stage – currently underway – affects big companies especially those which require controlling costs very closely, that compete in highly competitive markets, and are on a path to reach the aforementioned ultra-efficiency. The transformational forces are not bound to stop after reaching the big players and the expansion of the IIoT will continue until it reaches the whole industrial and manufacturing process of this fourth industrial era.

It will not be an automatic nor simple shift. It will require a new skillset, a new way of focusing on protecting data security and managing the uncertainty that digitization brings. Industry 4.0, for the reasons we just mentioned, requires experienced and talented partners to guide companies through industrial transformation, adapting the general principals to the specific needs of each industry.

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