Industry 4.0 – disruption or just a logic extension of WWW?

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Posted On : 2015-06-02 / BY : / IN Blog, Uncategorized

Industry 4.0 is the name of the German government’s strategy for the fourth industrial revolution. The goal is the creation of smart factories, where all production is connected. The term first surfaced at the Hannover Messe Industrial Fair in 2011, with the theme Industry 4.0. The first three industrial revolutions were, in chronological order, the steam engine, electricity and electronics. The concept is connected to the Internet of Things, and provides that any product in the production chain can carry information about where and how, with the result that the factory is be able to organise itself. The goals are shorter adjustment and lead times, fewer errors, more flexibility and no time-consuming programming. Industry 4.0 is considered to be the impetus for the re-industrialisation of the Western world.

It could be summarised as an extension of the possibility of connecting machines to other machines and ultimately an end-consumer somewhere in order to organise production in a smart way.

  • At the same time, other possible future-interlinked trends taking place are:
    The 3D printing revolution, where you print everything from spare parts for air crafts to industrial high-speed fans; bio-parts to full-scale cement houses; as well as consumer products, such as toys and food;
  • The omni-channel in retail and e-commerce, where consumers interact with brand owners, ultimately designing their own products and services using mobile technology for design and access, and brick-and-mortar as service points for training, service and upgrades/modifications. Another example is connected trucks interacting with the nearest service garage when it’s time for a service;
    The security revolution, where old paradigms are challenged. Classic LAN and firewall architecture are on longer capable of protecting multi-channel connections. New threats require new architecture; and
  • The social revolution and global transparency, which have led to increased demand for fair training and a fair labour market but also sustainable thinking and rapid communication, where everybody with a story to tell can have an impact.

So, how do the trends above link to Industry 4.0? Well, in many ways. The possible disruption is not about optimisation of manufacturing or even customising your product; the disruption is about being able to put together, at the speed of light, exciting hard and software (including services) using 3D printing and flexible online-connected manufacturing for producing adaptors, handles, missing parts as well as digitalisation (to write or rewrite software) and taking new innovations to the market:

  • for a fraction of the price (e.g., you can build you own satellite for less than 10,000 USD);
  • with extremely short go-to-market lead times (weeks); and
  • with A and B testing for maximum innovation diffusion.

Ultimately Industry 4.0 will create new echo systems, interlinking consumers to manufactures and innovators all over the globe, increasing the speed and diffusion of good and services substantially.

However, there are also pitfalls. Customising without considering platform thinking, product lifetime management and the aftermarket will erode all possibility of future profit. Supply management and logistics will benefit from the low stock volumes and high stock turnover, but maintenance, training, support and quality assurance in the aftermarket (which is, in many cases, 80 per cent of the total business) will suffer from bad structure and inefficiency. Manufacturing is always more efficient when optimised for a certain range of products and services, meaning that totally flexible production will always be less efficient.

In the aftermarket, increased complexity will lead to QA issues, so it is our view that the road ahead can be flexible and customised but in a structured way with:

  1. A well-defined innovation process from ideation, prototyping to development and commercialisation (diffusion).
  2. Structured platform thinking and architecture, with product lifecycle management implemented, from design, construction and production to the aftermarket, as well as recycling.
  3. An echo system with engaged open communities of suppliers, partners, producers and universities and industry standardisation committees.
  4. A well-defined system and business architecture for secure and easy interaction: from e-commerce to designing and controlling your own production as customer to interlinked suppliers and vendors of products and services all over the globe.
  5. Constant learning, using AI technology to adopt and learn in real time. Some things will go right, others will not; sometimes for no obvious reason.