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A Fourth Industrial Revolution: Understanding Industry 4.0

“The era of automation is already upon us, and the hype for data-driven solutions has never been so tremendous.”

Since the Digital Revolution at the end of the 20th century, technological advances have taken place at an exponential rate. The last twenty years have been marked by an omnipresence of screens, ubiquitously connected devices and an all-presence of the Internet. While the consumer electronics segment of the market is the most obvious manifestation of such changes, the industrial settings that help produce these electronics — as well as just about everything else we have in our homes — have experienced radical shifts in production methods. More recently, the manufacturing sector has taken giant leaps in the computerization and digitization of its environment to optimize production and reduce costs. The German government coined the term “Industrie 4.0” in 2011 to refer to this transformation. Since then, much has been written on the topic and several definitions of this new philosophy have emerged. This article will define Industry 4.0 as an innovation strategy and examine its three theoretical pillars.

What Is Industry 4.0?

The term “Industry 4.0” generally describes the intelligent networking of machines and processes in industry using information technology and advanced communication technology. Further, it encompasses all value creation guided by network controls in an age of enhanced connectivity. In practice, this entails a holistic approach to customer requirements, the use of real-time data analysis and the direct incorporation of sustainability concerns in production processes. The strength of an intelligent network in manufacturing is the linking of previously unlinked datasets from each entity’s input, whether it be quality data, maintenance logs, production logs or any other information source from the factory floor. The analytical synergies that can be captured by cross-referencing these data points add value to the processes by helping develop cost reduction strategies, offer insight into production methods and give decision-makers real-time production data.

The Three Pillars of Industry 4.0

The committee from the German government that was in charge of elaborating an Industry 4.0 strategy established guidelines for companies to better understand what the scope of Industry 4.0 for Germany would be. To structure their platform, they outlined three main pillars.

The “Technology” Pillar

Industry 4.0 systems have to be easy to understand by the user by being intuitive and reacting reliably. Their design, implementation and operation must be accessible to any actor in a company that wishes to enact a solution model in a process. While networking and customization would normally make tasks more complex, Industry 4.0 processes must strive to make solutions more easily discoverable, simpler and faster to find. This goes hand in hand with autonomous monitoring and planning, reducing the workload for operators. However, autonomy doesn’t mean a lack of oversight; Industry 4.0 system components are to be accessed remotely but effectively, with issues and errors detected in time. All in all, this pillar of the framework is the most important: Industry 4.0 is itself a product of technological advancement.

The “Human” Pillar

Many pundits have commented that increased automation and connectivity in manufacturing systems are necessarily a source of mass job loss. Human-oriented design is at the core of Industry 4.0 improvements to production systems. Such improvements are to be understood as part of a socio-technical compromise that offers opportunities to employees to expand their range of tasks and qualifications rather than be kicked to the curb. Learning tools and online teaching platforms must be integrated into any Industry 4.0 effort to encourage workers to acquire new skills and knowledge. A focus on IT skills should be imposed, as data-driven automation will require companies to hire more IT professionals than ever.

The “Organization” Pillar

Industry 4.0 must also be beneficial to organizations as a whole. Otherwise, firms will not subscribe to the radical changes it commands. Integrating new value networks into an existing one, such as analytics and data mining in a traditional manufacturing setting, is essential in benefiting from the technologies that are invested in. Industry 4.0 creates a new paradigm where the product, production and services are fully integrated into value creation networks. Cooperation with other firms in implementing novel technologies also allows for knowledge transfers that improve a company’s productivity and encourage innovation. Above all, connectivity and automation should allow organizations to cut certain workforce costs and reduce outsourcing to cheaper labour markets.

“When Will Industry 4.0 Come to My Town?”

The era of automation is already upon us, and the hype for data-driven solutions has never been so tremendous. Investing in a more skilled workforce and making sure your hardware can accommodate large datasets soon are the first steps to implementing Industry 4.0 strategies. If your industry hasn’t already experienced a switch in production methods to welcome Industry 4.0 technologies, it won’t be long!

Written by Thomas Stringer for the Axya Blog. Article originally published on Medium.

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A Fourth Industrial Revolution: Understanding Industry 4.0