We’re entering an era popularly termed the fourth industrial revolution - where a fusion of information technologies blur the lines between the physical, digital and biological realms. Also known as Industry 4.0, or Industrie 4.0, this revolution sees manufacturing factories and plants re-tooling their facilities to take advantage of new technologies says Michael Frans

This fourth wave of industry builds upon the revolutions developed in the first three eras: Early mechanisation and the introduction of water and steam power in the 18th century; electrification and division of labour in the early 1900s; and the introduction of IT, automation and modern production systems in the 1970s.

Wide-ranging benefits
In the smart factory of the fourth industrial era, advanced robotics is combined with sensors, real-time analytics, cloud services, automation, machine learning, mobility, augmented reality, 3D printing, and ubiquitous connectivity, among other technologies.

It enables plant managers to achieve new levels of efficiency - with optimal resource allocation, and the visibility to not only view operations from multiple perspectives, but also predict events (such as surges in demand or equipment failures for instance).

The ultimate goal is to employ these new technologies to reduce the cost per unit of production.

But a smart factory has a number of other advantages, when compared with the classical approach to manufacturing:

• Dynamically adapt to new production demands
• React faster to issues like machine downtime
• Smoother supply chain integration with other facilities and entities
• Robotics that automate processes and ensure predictable delivery
• Tighter cybersecurity with encryption and Cloud-based information management
• Mobility and augmented reality services to empower staff
• Introduction of industrial-scale additive (3D) printing
• Self-driving vehicles on the plant floor

The reality is that manufacturing operations are generally highly-established, capital-intensive entities. It’s not viable to simply start from scratch with a new smart factory. Rather, manufacturers need to look at augmenting their existing facilities with new technology.

Some of the ‘low hanging fruit’ can be found in connecting the various aspects of the value chain, into a centralised system - from inbound logistics, to parts suppliers, to the manufacturing process, all the way to the output once goods are completed.

Connecting these systems, and then surfacing them in easy-to-access dashboards and consoles, gives production managers the ability to see bottlenecks, constraints, and under-utilised capacity in the system.

From this, the foundation is laid for increased levels of automation - in the robotic systems that work on assembly lines, and in the decision-making required to constantly fine-tune the operations to get maximum output.

New frontiers
But merely optimising operations is certainly not the end-game for smart factories. The truly revolutionary effects of new technologies can be seen in the new business models that they create for manufacturers - particularly in areas like:

• Vertical integration: Increased digitisation and integration into the supply chain opens up new strategic possibilities for partnerships, disruption and disintermediation. A manufacturer of glass bottles, for example, could automatically receive orders from customers - via an online ordering portal - and deliver directly. In this way, they vertically integrate downwards and gain greater control over their market.

• Short-run manufacturing and specialisation: Whereas traditional manufacturing is only viable at scale, new innovations like 3D printing have made it possible for manufacturers to move into smaller, niche fields, where quantities are far smaller. With the ability to produce a far greater range of products, manufacturers can create specialised, custom goods, down to an audience of one.

• Big Data services: General Electric is touted as a great case study of a traditional industrial giant that has created new streams of services-based revenue. Its aviation department not only makes the hardware components for airplanes, but a host of data-gathering software as well. It now provides complete flight management systems for planes like the Boeing 737. Manufacturers in every field can create new business models, layered on top of the physical goods they produce.

Industry 4.0 will see manufacturers enhancing their operations, step-by-step, with a wide variety of technologies. Those that evolve the fastest will grab new market opportunities and position themselves as leaders in the digital manufacturing age.