Industry 4.0 technologies have converged to supercharge manufacturing efficiency, profitability, and customer experiences. It’s little wonder that manufacturers spent $907 billion on Industry 4.0 technologies in 2020.
In this article, we’re going to define Industry 4.0 and the Fourth Industrial Revolution. We’ll explain why the world needs Industry 4.0 technologies more than ever, break down each vital Industry 4.0 technology in turn. And find out how you can unlock Industry 4.0 technologies in your business.
Industry 4.0 Definition
Industry 4.0 refers to digital transformation of the manufacturing sector–blending the operational with the informational. It marks the convergence of several major disruptive technologies (explored later,) which McKinsey groups into four clusters:
- Data and connectivity: Big data, the cloud, IIoT (industrial internet of things)
- Analytics and intelligence: AI, machine learning, advanced algorithms
- Human-machine interaction: AR, VR, next-generation interfaces
- Digital-to-physical conversion: Additive manufacturing, autonomous robotics
Most people think that Industry 4.0 simply means digitizing existing manufacturing processes. But Industry 4.0 represents much more than that. Rather than merely replacing existing systems with digital alternatives, Industry 4.0 leaders are redesigning their entire operations into “smart factories”.
What’s the smart factory? It’s a cyber-physical network. The shop floor, machine operators, back-office systems, supply chains, and pools of data are connected via the cloud. The smart factory monitors itself. It self-optimizes and self-modifies. It’s autonomous and adapts to new opportunities and challenges as they emerge.
The Fourth Industrial Revolution
Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, put the “4.0” into Industry 4.0. His 2016 book, entitled The Fourth Industrial Revolution (highly recommended,) describes a new industrial stage centred around emerging technologies that fuse the physical, digital and biological worlds.
The Fourth Industrial Revolution represents the fourth time industry has transitioned to all-new manufacturing technology. The three preceding Industrial Revolutions were as follows:
- The First Industrial Revolution (1760–1840): Took place in Europe and the United States. Saw the shift from hand production methods to machines, and the rise of steam and water power.
- The Second Industrial Revolution (1870–1914): AKA the Technological Revolution. Widespread adoption of telegraph networks, and gas and water supply. Factory electrification and the production line.
- The Third Industrial Revolution (the 1960s): Simple digitization and high-level automation in production.
The Fourth Industrial Revolution is transforming the way goods are produced at a fundamental level. It’s a paradigm shift, the likes of which hasn’t been seen since the 18th Century. Industry 4.0 companies stand to take an unassailable lead over competitors. Still, manufacturers are slow to embrace this technological progress.
Their sluggishness is the result of two widespread myths that need to be dispelled ASAP:
Myth #1 — Industry 4.0 technologies are prohibitively expensive: Not true. Manufacturers can get going immediately with technologies like AI, VR, AR, big data, machine learning, and cloud computing thanks to SaaS solutions with modestly priced subscription models.
Myth #2 — Industry 4.0 technologies are only for large enterprises: Not true. Cloud computing and SaaS have removed barriers to adoption, powering up companies of one to 100,000+.
The Ultimate Industry 4.0 Technologies
Here’s a rundown of the core Industry 4.0 Technologies set to digitally transform manufacturing over the 2020s and beyond.
Data and Connectivity
- Cloud Computing
Smart factories are vertically and horizontally integrated through the cloud. Internal business functions like sales, marketing, engineering, and production are vertically integrated. External entities like suppliers, logistics, and taxation bodies, are horizontally integrated.
Without the cloud, the rapid data sharing required to sustain Industry 4.0 technologies wouldn’t be possible. The benefits of cloud integration are vast and wide-ranging. They include:
- Efficiency
- Flexibility and agility
- Scalability
- Customer satisfaction and retention
- Collaboration (breaking down silos)
- Automation
- Lower costs and increased revenue
- IIoT (Industrial Internet of Things)
Sensors embedded into everything from machines to products, vehicles, pallets, and workers, feed computer systems with a rich tapestry of data, identifying bottlenecks, failures, and inefficiencies.
- Big Data
Fifty-nine zettabytes (ZB). That’s how much data was created, captured, copied, and consumed in 2020. To put that into perspective, at current internet speeds, downloading that volume of data would take 600 million years!
Buried within this precious data, manufacturers will find the secrets to their long-term success. They just need the right technology to extract it: cue analytics and intelligence.
Analytics and Intelligence
- AI (artificial intelligence)
AI weaves its way throughout the entire Industry 4.0 ecosystem, giving machines the ability to think and behave “intelligently.” A couple of examples:
- Predictive maintenance: machines can predict defects and fix themselves in advance, reducing downtime and extending product lifetimes.
- Generative design: AI can generate ingenious product ideas and test them under various scenarios and conditions, predicting profitability and performance.
- Machine Learning
Machine learning is the study of algorithms that teach themselves, improving over time. It’s an application of AI.
The most frequently cited example of machine learning is AlphaZero: a deep-learning algorithm developed by the Google-owned AI lab, DeepMind. Through machine learning, AlphaZeroIt was able to master chess, shogi, and Go by playing against itself millions of times. Within an hour, it had become the best player–human or machine–of all time.
Human-Machine Interaction
- Industrial augmented reality (AR)
AR overlays computer-generated imagery onto the real world, as viewed through the screen of a mobile or wearable device. Manufacturers can use this composite view to guide product assembly, warehouse operations, maintenance and repair, or quality control. Workers receive information in real-time. The possibilities are endless.
- Virtual reality (VR)
VR places users inside a simulated reality where they can experience different scenarios. Training and testing can be carried out virtually, free from real-world consequences. So no downtime, product recalls, or safety hazards.
Digital-to-Physical Conversion
- Autonomous Robotics
AI-powered autonomous robots carry out highly-skilled, non-repetitive tasks, free from human error and quality issues. They can work independently, together with other robots, or in concert with humans. They recognize their surroundings, solve problems, and make intelligent decisions.
- Additive manufacturing
Additive manufacturing (or 3D printing) translates CAD models into real-world 3D objects. Objects are created by depositing plastics, metals or ceramics, layer–by–layer. It’s making batch-of-one production runs financially viable and moving production sites closer to customers.
Industry 4.0 Technologies Have Arrived in the Nick of Time
Moore’s Law was the most remarkable technological prediction of the 20th Century. It states that the number of transistors on a chip doubles every two years, while the cost is halved — the result: exponential technological advance.
Moore’s Law proved to be eerily accurate. And as a result, we got the home computer, the smartphone, and, one would assume, an exponential improvement in manufacturing productivity. But that assumption would be wrong. Besides getting bigger and moving offshore, little has changed on the average shop floor over the last few decades.
Despite Moore’s Law (which appears to be slipping), manufacturing productivity stagnated over the last 50 years. If this declining trend continues on its current trajectory, the result will be catastrophic: Global economic growth will halve over the next 50 years, leaving hundreds of millions languishing in poverty.
50% of S&P 500 firms will be replaced in the index within the next ten years. This sweeping change will be, in large part, due to their failure to adopt Industry 4.0 technologies. Manufacturers need Industry 4.0 now more than ever. And the world does too.
