5 things you should know about Industry 4.0


Hitting a factory near you

Whenever there’s widespread change in any sector you can bet your bottom dollar that a word will be coined alongside it, and the new buzzword for the combination of industry and the current Internet of Things (IoT) technology is Industry 4.0.

Think about what the industrial revolution did for the Victorians and you get an idea of the type of wholesale change that is already taking hold of the industrial sector. You’re probably wondering exactly what it is though, and with that in mind, here are five things you absolutely have to know about Industry 4.0.

What is it?

First things first – this isn’t a new technology. Nor is it a business discipline. It is in fact a new approach to achieve results that weren’t possible 10 years ago thanks to advancements in technology over the past decade. Some will also tell you that it’s in fact the fourth industrial revolution. What does that mean though?

Well, the first industrial revolution was the Victorian one that kicked it all off by moving from farming to factory production in the 19th Century. The second one ran from around the 1850s to World War I and began with the introduction of steel, culminating in the early electrification of factories and the first spouts of mass production. Closer to home is the third industrial revolution that refers to the change from analogue, mechanical, and electronic technology to digital technology that took place from the late 1950s to the late 1970s.

The fourth, then, is the move towards digitisation and involves three key parts, according to Paul Carreiro, executive VP and MD, EMEA, at Infor. One is the Internet of Things and cyber-physical systems such as sensors having the ability to collect data that can be used by manufacturers and producers. Secondly, the advancements in big data and powerful analytics means that systems can trawl through the huge sets of data and produce insights that can be acted upon quickly. Thirdly, the communications infrastructure backing this up is secure enough to be used by heavy industries.

Smart factories, which will be at the heart of Industry 4.0, will take on board information and communication technology for an evolution in the supply chain and production line that brings a much higher level of both automation and digitisation. It means machines using self-optimisation, self-configuration and even artificial intelligence to complete complex tasks in order to deliver vastly superior cost efficiencies and better quality goods or services.

Germany kicked things off

A German government memo released way back in 2013 was one of the first times that ‘Industrie 4.0’ was mentioned. The high-tech strategy document outlined a plan to almost fully computerise the manufacturing industry without the need for human involvement.

Angela Merkel, German chancellor, spoke glowingly of the concept as recently as January 2015 at the World Economic Forum in Davos, and called ‘Industrie 4.0’ the way that we “deal quickly with the fusion of the online world and the world of industrial production.”

To that end, the German government is investing some €200 million (around £146 million, $216 million, or AU$278 million) to encourage research across academia, business and government, and Germany isn’t the only country where advancements are taking place.

In the United States there is the Smart Manufacturing Leadership Coalition (SMLC). It is a non-profit organisation made up of manufacturers, suppliers, technology firms, government agencies, universities and laboratories that all have the common goal of advancing the way of thinking behind Industry 4.0. It is aiming to construct an open, smart manufacturing platform for industrial-networked information applications. The hope is that it will eventually enable manufacturing firms of all sizes to gain easy and affordable access to modelling and analytical technologies that can be customised to meet their needs.

Industrial internet is pretty much the same

The industrial internet is basically a term coined by General Electric (GE) to describe the way that big data analytics combined with the Internet of Things can produce extended opportunities for industries.

In its ‘Industrial Internet Insights Report’ for 2015 the company said it expects the concept to assist firms in aviation, oil and gas, transportation, power generation and distribution, manufacturing, healthcare, and mining. GE even has a formula for the industrial internet. It starts at the bottom with big data, to which you add the IoT (equipment, products, factories, supply chains etc), then throw in the technological expertise surrounding analytics, and finish it off with the context of the industries where equipment or the patients are at the heart of the business. That there is the industrial internet.

There are already a range partners signed up such as AT&T, Cisco, Intel, Amazon Web Services, Accenture and EMC’s Pivotal Initiative, thus ensuring that it has the backing and power to become a huge influence in the decades to come.

The Internet of Things has a role to play

Industry 4.0 is another area where the Internet of Things looks to play a huge role thanks to the sheer volume of sensors and “things” that have the potential to feed information into it and add value to manufacturing processes. Projections on the industry have mentioned the IoT alongside cyber-physical systems as ways in which a combination of software, sensors, processors and communications technology will underpin the very development of Industry 4.0.

To take one example, Bill Ruh, VP of GE Software, told TechRadar that sensors attached to wind turbines to boost their efficiency could improve it by 5%. Now a 5% increase might not sound like much to consumers, but in energy generation a figure that small has a huge impact.

It’s not worth billions… it’s worth trillions

Anything attached to the Internet of Things or increased automation is worth a tidy sum and Industry 4.0 is no different. Accenture released a report in January 2015 which concluded that an industrial-scale version of the Internet of Things, or Industry 4.0, could add $14.2 trillion (around £9.54 trillion, or AU$18.2 trillion) to the world economy over the next 15 years and the UK alone could benefit by up to $531 billion (around £352 billion, or AU$681 billion).

Cisco, meanwhile, thinks that UK startups have a massive chance to benefit by streamlining processes, and getting rid of inefficiencies in order to be in line for some of the £100 billion (around $148 billion, or AU$191 billion) in benefits that could come from the industrial internet.

Siemens, the company that already has a smart factory working in Germany, quoted IMS Research figures that showed the global market for industrial automation will post turnover of $200 billion (around £134 billion, or AU$256 billion) by 2015. A further analysis by Frost & Sullivan also revealed that the market for industrial networks and communications technology such as Ethernet connections and wireless systems will go from €854 million (around £623 million, $923 million, or AU$1.19 billion) in revenue in 2010 to €1.6 billion (around £1.16 billion, $1.73 billion, or AU$2.23 billion) in 2015.

Much of this is down to the thirst for higher productivity and cost reductions from using real-time data. This can also be another area where technologies of the future, such as 5G, will have an effect and make sure the “things” are buzzing away at optimum efficiency.


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