Digital transformation is driving change in the manufacturing industry with companies adopting new technology, such as the Internet of Things, artificial intelligence and machine learning, cloud computing, and big data analytics. According to the Society of Manufacturing Engineers (SME)’s  2022 Smart Manufacturing Market Survey, two-thirds of the companies surveyed are implementing some form of a smart manufacturing strategy.

Manufacturers are now in the fourth industrial revolution often referred to as Industry 4.0. As the Internet of Things technology becomes ubiquitous, enterprises need to think about their products and services in an Industry 4.0 environment or run the risk of falling behind in the race to become digital-native. This inflection point presents a real opportunity for enterprises to adapt to the new paradigm of Industry 4.0 but many are unsure how to make it happen quickly.

What is Industry 4.0?

Industry 4.0, often referred to as the Future of Manufacturing or Industrial Internet of Things (IIoT), is an orchestration that brings together machines, people, infrastructure, and processes into a single connected process. In other words, it’s the ultimate form of digital transformation using technology to automate processes and create an interconnected system of information and operations. This transformation helps manufacturers create a “smart factory” where the equipment, digital systems, and humans overseeing the manufacturing lifecycle are interconnected.

Manufacturers using sensors and robotics can collect, analyze, and use data to improve operations, reduce costs, and offer customers customized products. According to the World Economic Forum, manufacturers that invest in technology can increase productivity by as much as 140%.

Industry 4.0 is changing the way manufacturers make and deliver products. A smart factory that automates manufacturing processes can not only respond faster to changing customer demands but remain agile and competitive in an increasingly evolving business environment.

The History

Industry 4.0 is also referred to as the Fourth Industrial Revolution. What were the other three revolutions and what have we learned from them?

The first revolution in the early 1800s introduced the loom and textiles. The second industrial revolution involved the mechanization of machines such as the steam engine, and the third revolution introduced oil as a fuel and the mass production of products.

Each of these revolutions followed an S-curve path of innovation with three phases: a burst of innovation, a period of stagnation, followed by a massive build-out. We are currently in the third phase of that S-curve, where we are seeing rapid growth coming out of two decades of stagnation. And this massive build-out will probably continue for two or more decades democratizing innovation and technology. Everything around us is now technology-enabled with computing power and a connection to the internet (IoT).

What is the value of Industry 4.0 for manufacturing?

Industry 4.0 is transforming how enterprises operate by combining real-time data and intelligence for operations. This transition is shifting the balance of value from hardware to software, and from process or function to data. For example, a smart thermostat costs significantly more than a traditional thermostat, which demands far more set-up, but offers real data-generated benefits to consumers, including reducing power consumption, improving comfort, and learning how to anticipate owners’ preferences.

Industry 4.0 is transforming how enterprises operate by combining real-time data and intelligence for operations. This transition is shifting the balance of value from hardware to software, and from process or function to data. For example, a smart thermostat costs significantly more than a traditional thermostat, which demands far more set-up, but offers real data-generated benefits to consumers, including reducing power consumption, improving comfort, and learning how to anticipate owners’ preferences.

What technology is driving Industry 4.0?

The beauty of Industry 4.0 is that it integrates all the modern technologies into one fabric. Manufacturers adopting technology benefit from an integrated flow of information between operating and IT systems that transforms the traditional manufacturing lifecycle. Some of the technology driving Industry 4.0 include:

Internet of Things (IoT)

The Internet of Things (IoT) is technology that connects manufacturing equipment to other internet-based digital systems. Using sensors with an IP address, manufacturers receive real-time data and insights that help them monitor the overall performance of the manufacturing lifecycle. Moreover, IoT enables manufacturers to optimize processes, deliver to market faster, and reduce costs.

Artificial Intelligence (AI)

Artificial intelligence (AI) and machine learning help manufacturers analyze and understand large volumes of data to enhance processes and performance. AI is often used for the predictive maintenance of manufacturing equipment to reduce equipment downtime, control the quality of products, and improve planning.

Cloud computing

Cloud computing enables the physical and digital worlds of manufacturing to connect by housing data from multiple sources in one centralized location to make the sharing of information easier. This is important as manufacturers increasingly use automation to control processes that need to be monitored. In addition, cloud computing can save manufacturers the cost of purchasing on-site computer equipment, software, or data centers. Alternatively, manufacturers are also using a hybrid model to combine fog computing and cloud computing giving them the optimum cost structure and flexibility.

Big data and analytics

Data is vital for Industry 4.0 because it helps manufacturers solve problems and improve operations. However, manufacturers don’t have the time to manage the large volumes of data produced by IoT and cloud computing. Big data analytics uses AI and machine learning to recognize patterns and trends from the manufacturing lifecycle to provide insights that can help manufacturers make better decisions.

3D Printing Technology

3D Printing is a much talked about digital transformation technology in the manufacturing industry. The use of this technology helps manufacturers make faster and cheaper prototypes. In fact, innovation in this field has almost halved costs, while delivering twice the performance. It’s a cost-effective way for product designers to troubleshoot and test their commodities. It also helps industrial manufacturers to produce commodities that are in high demand. The aerospace and automotive manufacturing industries are already making good use of this technology.

The transformation of manufacturing

The traditional manufacturing lifecycle is transforming as a result of Industry 4.0. The digitally enabled factory of today looks very different from the factory of ten years ago. Digital transformation with new technology enables a manufacturer to become a “smart factory”. With the interconnectivity between manufacturing equipment, digital systems, and humans, manufacturers can use real-time data to improve operations, deliver products faster, and provide better customer experiences. Implemented successfully, these solutions deliver irresistible returns. Across a wide range of sectors, it is not uncommon to see 40% reductions in machine downtime, 20% increases in throughput, 25% improvements in labor productivity, and 85% more accurate forecasting.