Industry 4.0

Why should I care and how can I start?

João Jarego, Closer Consulting

The 1^st Industrial Revolution brought us the Age of Mechanical Production. It got started with the introduction of the steam engine, around 1760 and through its advent, the steam engine, it was powering everything from agriculture to textile manufacturing. A society that used to be mostly agrarian gave way to urbanization and the factory emerged as the new center of community life (in an often-gloomy scenario for its workers – children included). 

The 2^nd Industrial Revolution, which started around 1870, and is also known as the technological revolution, introduced electrification and mass production with the birth of the assembly lines. Productivity increased immensely but also with an impact on unemployment as many workers were replaced by machines.

The 3^rd Industrial Revolution, also known as the Digital Revolution, started in the 1960’s, but is actually a child of the transistor’s invention in 1947. The transistor allowed increasingly cheap and powerful computation power concentrated in an ever-smaller area. The move from analog electronic and mechanical devices to pervasive digital technology dramatically disrupted industries, especially global communications and energy. Electronics and information technology began to automate production and take supply chains global.

Each of the former industrial revolutions brought, looking retrospectively, profound changes with major societal transformations, disrupting the way people live, work, and communicate.

Then, the 4^th Industrial Revolution. The term was introduced by Klaus Schwab, Founder and Executive Chairman of the World Economic Forum and author of the book titled “The Fourth Industrial Revolution”. In a 2016 article, Schwab wrote that “like the revolutions that preceded it, the Fourth Industrial Revolution has the potential to raise global income levels and improve the quality of life for populations around the world.” He continued by saying that “In the future, technological innovation will also lead to a supply-side miracle, with long-term gains in efficiency and productivity. Transportation and communication costs will drop, logistics and global supply chains will become more effective, and the cost of trade will diminish, all of which will open new markets and drive economic growth.”

So, indeed the new revolution was announced: a promise of something to happen. Also, unlike the previous revolutions, which could be boiled down to single main driver, the 4^th Industrial Revolution is a complex and multi-factor process which blurs the classical boundaries between the physical, digital and biological worlds. It brings together advances in technologies like Artificial Intelligence (AI), Big Data and Analytics, Blockchain, Robotics, the Internet of Things (IoT), 3D Printing, Genetic Engineering or Quantum Computing. It describes the collective momentum driving many products and services that are rapidly becoming indispensable to modern life, including GPS systems that suggest in real-time the best route to a destination, voice-activated virtual assistants like Apple’s Siri, personalized Amazon recommendations or Facebook’s image processing ability to recognize your face and tag you in a friend’s photo.

Two words may, therefore, describe what the 4^th Industrial Revolution means to manufacturers: integration and collaboration.

The complexity of the transformation may easily lead to some degree of analysis paralysis. Change is hard, and what you will need is a practical and actionable road map. Let’s look at the critical steps to build a path to Industry 4.0.

Where am I? You have to start with the state of your current operations. While it would be great to leapfrog to Industry 4.0, you need to ensure you’ve effectively adopted Industry 3.0, which includes investment in automation, computers, and electronics. It’s essential to have information technology and operational technology working together, instead of in silos. This foundation must be in place before you can take full advantage of the next revolution. The critical difference between Industry 3.0 and 4.0 is data. Industry 3.0 has been generating data, but it was not a true asset being used to streamline processes. Now there’s the chance to do so.

Where do I want to be? Now that you know where you are, you can focus on the strategy of implementing Industry 4.0. One key aspect involves connectivity. You must have digital connectivity between machines and computers so that the data can be collected and analyzed. Without aggregation and analysis, no information is extracted from data. A plan for collecting and analyzing data must be in place. Potential roadblocks ahead should be anticipated, such as disjointed data collection or the lack of a central hub for your big data.

Is the ecosystem ready? Communication is the biggest obstacle in most transformations. Industry 4.0 is no exception. The physical and digital parts of your organization must communicate. Without this, you will find yourself in a cycle of disconnection. If your environment isn’t ready, the drive for change will not prevail.

Test your approach! It’s time to execute and learn from experience. Start small at first to test the approach. The plant has numerous machines and workflows: narrow in on a specific challenge such as integrating legacy systems or gathering data from the most critical machines on the plant to deliver a predictive maintenance model. Or focus on something less dependent on the plant data integration like forecasting the demand and adapt the production plan accordingly.

Concentrate on Process Improvements. The holy grail of Industry 4.0 is to improve every process, making it as efficient as possible and ensuring that the resources are used in the most effective and efficient way. Revisit iteratively your chain of processes from the beginning to the end and identify and prioritize bottlenecks and opportunities for improvement exist that can be supported by new technologies, connectivity and data.

There is a Chinese proverb ascribed to Lao Tzu, which is usually translated like: "A journey of a thousand miles begins with a single step". Don’t be stopped by the complexity of the process or the uncertainties of the Covid-19 pandemic. If anything, they make the first step more urgent and vital.

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