Industry 4.0: Taking factories to the next level

It’s a short phrase that covers an enormous scope and like the consumption of the proverbial pachyderm, we often break it up into bite-size pieces to better digest it. However, looking at the slice of meat on your plate doesn’t tell you what the whole animal looks like, and analysing components of Industry 4.0 in isolation can sometimes distract from the bigger picture and the wider potential.

Automation is a key aspect of the concept, as is integration to manufacturing execution systems and enterprise resource planning. Big data, cloud storage and cyber-security all feature heavily, with predictive maintenance, employee scheduling and logistics management also linked in. While all of these and many others contribute to the whole, the end result is not just about incremental improvement – quicker, cheaper, better – but it is the opportunity for new business models and an entrepreneurial approach to bringing products to market. That is where the revolution happens, enabled by a technological evolution.

You probably noticed that in the above paragraph I didn’t call an elephant an elephant, I mixed fourth industrial revolution with Industry 4.0 and then quoted a bunch of industry jargon that needs further definition. This illustrates one of the fundamental issues of any movement – what to call it and how to describe it in plain English.

The UK government prefers the fourth industrial revolution, building on the fact that Britain was the birthplace of the first one. Industry 4.0 has gained popular status but others such as Industrial Internet of Things (IIoT), smart factory, connected enterprise, digital manufacturing and many more are all used interchangeably.

We shouldn’t get too bogged down in semantics, but these phrases themselves can sometimes suggest a limit in their scope compared to the total picture – you could argue that the benefits are not restricted to within the factory walls or you might question whether manufacturing includes water processing or electricity generation. Perhaps the broadest reach is in Industry 4.0, where simply removing the ‘4.0’ leaves you with a single word that encapsulates many sectors including manufacturing, processing, logistics, construction, agriculture and commerce.

Regardless of this multitude of terms, the great thing is that these phrases are entering the conversation and helping to form a wider awareness and appreciation of the concepts and opportunities. Diverse stakeholder groups from industry, government, academia, institutions and the media are all collaborating and converging on the same goal – the future strategy for UK industry.

So, we can decode a range of titles that describe parts or the whole of the initiative, but what lies beneath them? What is the definition of the Smart Connected Digital Industrial Manufacturing Factory Revolution 4.0?

The International Standards Organisation had a strategic advisory group look at specifying which characteristics could define this range of phenomena. The result was that any definition should include: the integration of customers and partners in business and value-added processes; the collaboration of human beings, embedded systems, autonomous machines, and systems of systems; and the convergence of advanced manufacturing capabilities, digital technologies and the Internet of Things. These factors, when combined, lead to: new forms of value creation, business models and services; an improvement of human productivity and innovation cycles; evolution of safety, security, work structures and work roles; and the individualisation of products (batch size one), services and processes.

The former is not a bad summary and, most importantly, succeeds in focusing on broader goals of business models, innovation, employment and supply chain in addition to manufacturing technology. This broad reference model can be further divided along three separate dimensions: vertical, horizontal and time.

The vertical dimension is the connection and integration of all business systems, from manufacturing and processing to logistics, planning and engineering. You can picture the production planning system connected to maintenance planning, spares management and resource scheduling to autonomously organise the most efficient throughput and use of resources.

The horizontal dimension runs right through the supply network. Facilities are connected in real time to the supply base and customers to dynamically order, handle, process and deliver in the most effective way.

The time dimension covers the full product lifecycle, from design and development, through production, use and end-of-life recycling, re-use or repair. Rapid digital development is enabled by modelling and simulation of both products and manufacturing processes. Tracking and monitoring of products gives benefits not only in production but in service and at end of use. Feedback into the design process, condition monitoring and incremental updates are all enhanced by greater connectivity and data capture.

There are some benefits that have always been associated with automating – increased throughput, efficiency and quality leading to a better product and service being just a few. Product miniaturisation and mass production are other advantages – smartphones and tablets couldn’t be made otherwise. There are three main business models within industry 4.0 which provide further benefits in terms of cost-reduction and improved customer experience.

Firstly, complete automation can take the customer experience to another level – the goal of mass customisation and ‘batch size one’ could bring an unprecedented level of personalisation to products without the hefty price tag usually associated with them. A supplier could take advantage of the ability to manufacture made-to-order products from a menu of choices, locally and efficiently. The customer is offered the opportunity to buy the exact configuration they desire without paying bespoke service costs.

Further to this, localised manufacturing reverses the trend to mass-manufacture in low-labour-cost countries by allowing efficient production in high-wage economies. This enables manufacturing to be located where the market is, reducing both shipping costs and lead time, both key competitive elements in a business. The digitisation of the design and development mean that local contract manufacturing businesses could manufacture goods designed by specialists, entrepreneurs, customers or end-users.

Another business model that is enabled by the increased connectivity between products and producer is servitisation. The classic model is to sell goods that then become the customer’s responsibility to operate and to achieve desired performance. Servitisation means that a customer buys a performance level on an ongoing basis, maintained by the supplier of the product. An example would be in paying a monthly service charge, rather than paying for a machine outright. In this instance, a supplier would deliver a machine but would then also be responsible for the performance of the machine and actions to maintain it. In order to achieve this, the supplier would need to be connected to the machine to gather data, monitor and act upon the real-time analysis.

Is this already happening? One of the phrases I hear from time to time when discussing Industry 4.0 is that “it is nothing new, we’ve been able to do that for 20 years or more”. I would agree in part, but it is a little like a pioneer of Arpanet claiming that a live-streamed, interactive webinar is nothing new as they were sharing plain text messages between a handful of computers in the 1970s. It is the resulting application that is radically improved, enabled by the gains in data speed, storage and connectivity.

After all, we have been making telephone calls for over 100 years, but a voice-activated call with a Bluetooth headset is hardly the same as placing a call through a manually patched telephone exchange.

The revolution has begun, but will truly be happening when the norm is to find manufacturing that is local to the customer, has fully integrated business systems and is linked in real time to customers and suppliers to produce mass-customised goods on a rapid lead-time. Then we won’t be calling it ‘Industry 4.0’ anymore, it will just be ‘Industry’.