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Industry 4.0 made simple

What exactly is Industry 4.0?

It’s the fourth revolution in how we work. First came steam, then electricity and mass production, and then computers and automation. With Industry 4.0, computers work directly with automation, so it’s not really new technology. It’s a new approach.

Industry 4.0 and the industrial internet of things: what’s the difference?

On the surface, not a lot. Industry 4.0—first coined by the German government—is specific to the manufacturing industry. Its purpose is to manage the entire value-chain process, integrating all of the functions within the business. It can link suppliers, partners, distributors – anyone within the product’s life cycle.

The Industrial Internet of Things (IIOT) is about interconnected systems that allow ‘things’, such as machines, to talk to each other, capturing data more consistently and accurately than humans. This data can give companies visibility into their business. For instance, it can provide a predictive maintenance model, transparency into what’s happening with their products, and automation solutions. IIOT is not only used in manufacturing, but also in construction, utilities, transportation – essentially, any industry that relies on devices of some kind.

The challenges in adopting Industry 4.0

1 - Resistance to change

It’s only human nature to resist change. Convincing others of the virtues of Industry 4.0 and adjusting your employees to new technologies can be difficult. Shifts in culture are inevitable, so careful workplace planning is essential.

2 - Skilled workers in short supply

A skills gap in IT already exists worldwide, so recruiting workers will present a challenge. Britain will need 2.287m workers with digital skills by 2020. In the U.S., 3.5m jobs in manufacturing are expected to be created over the next decade, but the lack of skilled workers means 2m of those jobs will go unfilled. Companies everywhere will have to think about upskilling employees.

3 - Threat of cyber attacks

The interconnectivity of Industry 4.0 means a cyber attack can have a devastating impact. Cyber security shouldn’t merely be a priority, but an essential part of the planning and operations of any Industry 4.0 strategy.

4 - New organisational processes and structures

With innovative technologies come new end-to-end processes. Industry 4.0 affects the entire value chain, so new business models and structures are needed, right down to administration tasks.

5 - Investment

There are no general standards when it comes to Industry 4.0, so the thought of investment, no matter how small, leaves some companies reluctant to forge ahead. In Britain alone, 44% of companies are holding back on investment due to a lack of understanding of Industry 4.0. It’s worth checking to see if Government initiatives are available to help, so do some research.

The benefits of Industry 4.0

1 - Efficiency improves

Computer control means more reliable and consistent productivity and output. Companies adopting 4.0 expect to increase efficiency by 4.1% annually. Keep in mind, too, that automation usually improves quality, which further enhances efficiency.

2 - Reduced costs

By becoming more efficient, manufacturers can cut their operational costs. Sensors are used in Industry 4.0 for smarter predictive maintenance, allowing manufacturers to be proactive about servicing and prevent downtime with breakdowns. This not only cuts maintenance costs, but also improves productivity.

3 - Better decision making

Machines become data sources. Companies can collect and analyse information based on real-time data, helping them make quicker, more informed decisions on inventory, labour planning, purchasing and production, just to name a few.

4 - Improved customer experience

Industry 4.0 connects the silos within a business, helping manufacturers to be proactive. They can better accommodate critical orders and meet customer expectations. Working more efficiently, manufacturers can also improve speed to market and lower their costs.

5 - Higher revenue

With real-time data, manufacturers can gain insights into creating additional revenue streams. Globally, 35% of companies investing in Industry 4.0 expect revenue gains of 20% over the next five years. By digitising products and services, manufacturers can offer customers data analytics, far more personalised products and customised solutions.

6 - Part of continuous improvement

Improved efficiency is traditionally part of any continuous improvement program, but manufacturers can mine their operations for value, continuallyimproving their processes with the data harnessed. Opportunities previously unknown become apparent, giving them a competitive edge.

Industry 4.0 - The Jargon Buster