Industry 4.0 — manufacturers must embrace tech to remain ahead of global competition

The first industrial revolution happened back in 1784 when the age of mechanical production dawned; it was followed by a second industrial revolution sparked by electrical energy in 1870 and a third based on the automation of production through IT in 1969. Now we’re on the cusp of Industry 4.0 – a fourth industrial revolution driven by connected devices and sensors, cloud computing, advanced robotics, intelligent software, and a range of other technologies.

Industry 4.0 is defined by Deloitte as the merging of the real and virtual worlds on the factory floor – a world of smart factories where cyber-physical systems monitor physical processes; communicate with each other and human workers, and make automated decisions. Think of it as the Industrial Internet of Things.

The key driver for the change is the use of sensor-based technology. These sensors are becoming cheaper even as the power of computing grows. They are the exponential technologies that start to blend the real and virtual worlds together.

The entire product life-cycle can be driven through this technology shift – from engineering to delivery. The design can be driven by customers as they personalise products through e-commerce that automatically changes the production process on the fly to deliver an unbelievable customer experience.

On the innovation cycle
Companies refer to this as the Innovation Cycle where they have sensors, actuators and integration at machine level that allows users to generate data from the machines on a product level. Couple this with data analytics, ensuring that you are precise about the data collected, and the immediate results can be extraordinary.

This data may be used to improve maintenance or lower the cost of production by reducing processes and/or process times. Finally, the data gained goes full circle back to the manufacturer who looks for ways to innovate and ultimately create new products and services.

Once the production plant is connected via the Internet of Things, this starts to deliver efficiency and optimisation across production, purchasing, quality control, marketing and engineering control. From here further integration and networking can begin.

The concept of smart logistics, smart sales / marketing and smart services begin to emerge. This also extends to the supply chain, partner and distributor networks and obliterates physical barriers to moving to a highly collaborative and co-operative world.

Industry 4.0 is more than just a vision of the future – it’s a vision for now delivered at the speed of now. Using current technologies to connect physical objects to the virtual world is already yielding new business models, especially across discrete and process manufacturing entities.

Zero tolerance for defects
As markets tighten and currencies weaken, the impact of Industry 4.0 heightens as you look to improve quality and have zero tolerance on defects to drive a more profitable production process. This is supported by a more reactive and predictive maintenance model across the business assets.

There has been a trend to move manufacturing back to higher cost production markets through the labour cost savings the Internet of Things delivers. This poses a threat for our manufacturers unless they leverage new technology to improve quality and efficiency. However, these same technologies could also be used to drive new opportunities for growth in factories.

We are starting to see a local boom in manufacturing caused by the prolonged currency weakness and government incentives. Imagine an investment now in these technologies to drive us to the next level of competitive, personalised, real-time manufacturing.

As the global market leader of integrated accounting, payroll and payment systems, Sage is ready to enable our customers to focus on their business and leapfrog to the future as they embrace transformative technologies such as the Industrial Internet.