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January 26, 2018 Article 5 min read
Industry 4.0 is driving efficiencies and increasing competitiveness in the manufacturing industry. Data, and the interconnectivity of all processes and machines, are key components of this transformation. Do you want to evolve your traditional factory into a smart factory?

Man using futuristic manufactuing machine. Increasing productivity is what drives every industrial revolution. At its core, Industry 4.0 envisions increased productivity through a seamless physical-digital integration of humans, processes, systems, and machines. The global ramifications of Industry 4.0 are still under debate, but one thing is certain: Change is coming.

Are you poised to adopt Industry 4.0 concepts and become a “smart factory”? If so, you could transform quality, supply chains, customer relationships, and most importantly, your competitive advantage.

What is Industry 4.0?

Also referred to as the fourth industrial revolution, Industry 4.0 is synonymous with smart technologies. Key components are cyberphysical systems, emerging technologies, advanced data analytics, collaborative robots, virtual reality, sensors, and additive manufacturing (i.e., 3-D printing). This Internet of Things — the “intelligent connectivity of smart devices” — will be a critical component in a smart factory, but it’s the underlying data systems that will be the key enablers of your 4.0 strategy.

What’s required in an Industry 4.0 strategy?

These are the three main components of an Industry 4.0 strategy:

  1. Intelligent sensors. In the industrial Internet of Things landscape, all “things” will be equipped with smart sensors. As a valuable data source, these sensors will have their own microprocessors, be integrated into production systems, and carry out complex signaling functions.
  2. Data system. It’s impossible to drive organizational change without reliable information. Connected data information systems will be the heartbeat of Industry 4.0. It’s all about gathering industrial data from myriad sources into a warehouse of actionable information.
  3. Data analytics. Big data will help those on the shop floor identify patterns and trends and then draw conclusions that inform more knowledgeable and tactical business decisions, whether that’s harnessing virtual reality, machine learning, or other smart technologies. It will allow humans, machines, and processes to be more nimble, responsive, and proactive.

Connected data information systems will be the heartbeat of Industry 4.0.

What are the benefits of Industry 4.0?

Benefits include:

  • A more agile supply chain. In a smart factory, your supply chain is a highly efficient network of suppliers, transporters, distributors, and customers. Smart technologies — autonomous logistics, integrated planning systems, and advanced analytics — will quickly anticipate disruptions and react to them, allowing you to adapt to changing conditions in real-time.
  • Improved workplace safety. Data will be gathered and acted on instantaneously, preventing possible hazards from turning real. If an employee moves into a designated unsafe area or too close to a machine, smart technologies alert a floor manager or slow the machine down.
  • Increased customer insight. Data analytics will help businesses gain a deeper understanding of each consumer’s buying habits to create a uniquely tailored digital shopping experience, which will foster brand loyalty and customer retention.
  • Increased cost savings. After the initial investment to convert to smart technologies, the built-in intelligence should pay for itself. A decrease in quality problems will translate to less material waste, fewer employees on the floor, and decreased operating costs.

How can Industry 4.0 improve employee productivity?

In the past, operations were reactive. An employee would wait for a machine to break before fixing it — whether that meant changing the oil or replacing a gasket. Aiming for increased efficiency, organizations then adopted a preventive approach. An employee would institute the fix at a predetermined interval, such as replacing a part every 300 hours. In a smart factory, the Industry 4.0 strategy — based on data — is predictive. With sensors, the employee is notified in real-time. In some instances, a machine could even learn to fix itself. Whereas, performance was once at risk, now, a shop floor can become even more productive.

What are three common Industry 4.0 challenges?

But, this doesn’t mean that Industry 4.0 is without its challenges, including:

  1. Outdated technology. You need reliable, up-to-date information. When your machines or software are out of date, smart technologies can’t optimally integrate with them.
  2. Talent. Smart factory employees will need to be comfortable with computers. The challenge will be finding those with an advanced skill set. A prerequisite of Industry 4.0 will be employees who understand data — even those on the manufacturing shop floor.
  3. Cybersecurity. Industry 4.0 is critically tied to data. Therefore, capturing, storing, and safeguarding it will be crucial. With data systems connecting a vast number of machines, even more points in the chain of information will require protection.

Industry 4.0 will need employees who understand data — even those on the manufacturing shop floor.

How do we start implementing Industry 4.0 concepts?

If you’re ready to transform your traditional factory into a smart factory and optimize your plant floor, you need to develop a roadmap that will guide you through the change. While each plant floor will encounter industry-specific dynamics, the following four steps can begin moving you in the right direction.

  1. Understand your current environment. You can’t determine where you’re going until you know where you are. Start with an analysis of your machines, people, systems, and shop floor.
  2. Understand your future. Identify the direction in which you’re headed. Perhaps a process that used to meet customer demand could be improved. For example, in the plastic injection molding process, many completed parts are inspected by a person. Industry 4.0 would use sensors during production to make real-time adjustments, therefore improving quality and repeatability. Updating the process provides the manufacturer more confidence that the end product meets customer demands.
  3. Identify strengths and weaknesses. Determine what’s already working well and what isn’t. Do you collect data but lack the workforce to analyze it? Do you have open relationships with your customers that can be optimized, or are you struggling to maintain repeat orders?
  4. Make the plan. The direction in which you’re headed should leverage your strengths. Do you have a proven history introducing new product lines and want to expand into emerging markets? Do you have computer-savvy employees who could thrive with more accurate data? Figure out what you do well and then ask, “How can I do that better?”

If you’re ready to transform your traditional factory into a smart factory and optimize your plant floor, you need to develop a roadmap.

While the idea of an interlinked factory with dozens of interconnected processes, along with artificial intelligence and automated logistics, seems like science fiction to some, it’s fast becoming a reality for many in the manufacturing industry. Those who are quick to adopt these smart technologies — and unleash the data they provide — are poised for streamlined production processes, an enhanced workplace, a more nimble supply chain, and dynamic growth. With an Industry 4.0 approach, it’s the data — derived from your factory and your shop floor — that will become your competitive differentiator.