What is Industry 4.0 and the 4th Industrial Revolution?
“The changes are so profound that, from the perspective of human history, there has never been a time of greater promise or potential peril.”
― Klaus Schwab, The Fourth Industrial Revolution
The Fourth Industrial Revolution is a technological revolution “blurring the lines between the physical, digital, and biological spheres.” Also known as 4IR, this Fourth Industrial Revolution is well underway, and its effects are being felt across every major industry.
Keep reading as we define the Fourth Industrial Revolution, explore 4IR technologies, and discuss how the Fourth Industrial Revolution has impacted manufacturing through a variety of use cases. It’s time to adapt or die because manufacturing is changing. Are you?
What Is 4IR (The Fourth Industrial Revolution)?
The term was coined in 2016 by Klaus Schwab, the founder of the World Economic Forum, at the organization’s annual meeting. Later, Schwab wrote a blog on the subject as well as a highly influential book–The Fourth Industrial Revolution–which describes “a technological revolution that will fundamentally alter the way we live, work, and relate to one another.”
Today, the Fourth Industrial Revolution is taken to mean the digital transformation of the manufacturing industry by new technologies like artificial intelligence, additive manufacturing, augmented/virtual reality, and the IoT (Internet of Things.) It also refers to advances in connectivity that give rise to “smart factories ”–fully connected cyber-physical systems that merge the physical and digital realms (more like ecosystems than linear value chains.)
According to Klaus Schwab, the Fourth Industrial Revolution is leading to a “supply-side miracle.” There’ll be long-term gains in efficiency and productivity, lower transportation and communication costs, and more efficient logistics and supply chains, all of which will drive economic growth in the manufacturing sector.
Others within the World Economic Forum warn of the dark side of the Fourth Industrial Revolution–mass unemployment, AI systems smarter than us, cyber warfare, and an infinite number of other tangible and intangible threats that we can’t even conceptualize yet.
Nobody can predict how the Fourth Industrial Revolution will play out. But one thing’s for sure–the ball’s rolling. As the changes take hold and shape the future, the onus is on manufacturers to decide which digital technology (or technologies) they should adopt to remain competitive.
The World Economic Forum and McKinsey have teamed up in an effort to guide manufacturers. They’ve established The Global Lighthouse Network, a community of world-leading manufacturing facilities that embody Fourth Industrial Revolution manufacturing technologies and principles.
These “Lighthouses” have been selected to serve as beacons for proactive manufacturers seeking to become Fourth Industrial Revolution leaders. It’s worth checking out to see if there are any examples in your industry.
Why The Fourth Industrial Revolution?
The Fourth Industrial Revolution is disrupting industry at an unprecedented pace, but it’s obviously not the first time rapid technological advancement has resulted in widespread change and upheaval. The Fourth Industrial Revolution builds on top of three industrial revolutions that came before it:
The First Industrial Revolution started in Britain around 1760, spreading to Europe and the rest of the world through the early 1800s. It was primarily powered by steam and the steam engine. It enabled manufacturers to mechanize production for the first time, resulting in new manufacturing processes, bigger factories, a booming textile industry, and mass urbanization.
The late 1800s marked the arrival of the Second Industrial Revolution, which saw the rise of mass production caused by the advent of steel, oil, and electricity. Major inventions of the era include the lightbulb, the telephone, and the internal combustion engine.
The Third Industrial Revolution, also called the “Digital Revolution,” occurred in the second half of the 20th century. Within a few decades, inventions like semiconductors, personal computers, and the internet changed how we work, live, and communicate forever.
The Most Significant Fourth Industrial Revolution Technologies
The Fourth Industrial Revolution is driven by a suite of advanced technologies (themselves powered by an unprecedented quantity of data) that have been advancing for decades.Opinions vary over which technologies should be included. Boston Consulting Group’s “Nine Pillars of Technological Advancement” is as a good model. We add a tenth pillar–artificial intelligence.
Additive manufacturing – Also known as 3D printing, this process allows for rapid prototyping and “decentralized” digital manufacturing. Smaller production runs can be manufactured locally rather than relying on overseas factories with all the political, economic, and environmental risks that entail.
Advanced robotics – Today’s robots combine increasingly powerful hardware and sensor technology with highly sophisticated programming and machine learning capabilities. They can carry out tasks independently, with other robots and humans, learning and improving over time.
Big data analytics– As our world goes digital, vast data reservoirs are generated and stored. This big data holds hidden secrets that promise to revolutionize our understanding of economics the human condition. We need big data analytics to extract these insights.
AI and machine learning– Artificial intelligence imbues programs and machines with human-like decision-making capabilities. These capabilities become more advanced with machine learning algorithms and refined over time with exposure to larger data sets.
The Industrial Internet of Things (IIoT) – The IIoT (Industrial Internet or Industrial IoT) is the backbone of the Fourth Industrial Revolution. It refers to networks of sensors and connected devices that “talk” to one another, share data, and execute functions with or without human intervention.
Augmented and virtual reality– Augmented reality (AR) and virtual reality (VR) enable the creation of immersive and interactive experiences using digital simulations. In an online world, where buying often occurs at a distance, serving up products “virtually” has never been so crucial.
Simulation – Engineering will increasingly use 3D simulations in plant operations, leveraging real-time data to create virtual models of machines, products, and humans. This enables optimization of machine settings in the virtual world before physical implementation.
Horizontal and Vertical System Integration – Today's IT systems lack full integration, leaving companies, suppliers, customers, and even internal departments fragmented. Industry 4.0 promises a shift towards cohesive, cross-company data-integration networks, paving the way for automated value chains.
Cybersecurity – The increased connectivity of Industry 4.0 demands new, secure, reliable methods of communications and sophisticated identity and access management.
The Cloud – Cloud technologies facilitate the interconnectivity of devices, systems, and processes, enabling seamless data exchange across boundaries. They also provide scalable storage and computing power for handling the large volumes of data generated by Industry 4.0 technologies.
7 Ways to Use Fourth Industrial Revolution Technologies In Your Business
“The Fourth Industrial Revolution is still in its nascent state. But with the swift pace of change and disruption to business and society, the time to join in is now.”
― Gary Coleman, Global Industry and Senior Client Advisor, Deloitte Consulting
The Fourth Industrial Revolution drives efficiencies, conserves resources, boosts profitability, and enhances buying experiences. Here are just a handful of use cases:
1. Harness automation to improve productivity and resource efficiency.
Fourth Industrial Revolution technologies are automating sales processes (3D configuration and proposal automation), engineering (CAD and design automation), and the factory floor (artificial intelligence and robotics). Human employees are being freed to work on the parts of their jobs that are more, well, human.
Sales reps can concentrate on forming and maintaining relationships, engineers can spend more time on R&D, and workers on the shop floor can avoid repetitive, menial, and dangerous jobs.
2. Use networked sensors to power predictive maintenance on machines.
Networked sensors inside factory equipment can monitor machine performance, run diagnostics, and schedule “predictive maintenance.” The result: extended life expectancy for your machines, less downtime, less waste, and increased safety.
3. Create “digital twins” to save time, space, and waste.
Digital twins are virtual replicas of physical devices (such as machines) or systems (such as factories) that live in simulated environments. To accelerate R&D and save cost, engineers can conduct rapid testing on digital twins rather than physical prototypes, saving time and money in destructive testing (tests carried out to failure).
4. Build a connected and flexible “smart factory”–learn and adapt to an ever-changing world.
Rather than automate discrete, linear tasks, the “smart factory” adapts fundamentally to suit its internal and external business environment. It monitors the entire production process, from supply networks to inventory, machines, individual workers, and tools, making continual data-driven adjustments to achieve specific goals.
5. Leverage cloud-based systems (cloud computing) to sync geographically distributed manufacturing facilities
Companies with geographically dispersed production facilities and weak analytics are particularly vulnerable to supply chain shocks. The cloud and SaaS solutions increase resilience to globally disruptive events by providing a remote single source of truth. This data repository is accessible from anywhere, any time, on any device, breaking down silos and enhancing collaboration across borders.
6. Use 3D product configuration to customize products and personalize experiences at scale.
From personalized sneakers to personalized medicines, demand for customized goods is booming. The rewards for manufacturers that can supply personalized goods are significant–“ personalization leaders ” experience a 5 to 15 percent increase in revenue and a 10 to 30 percent increase in marketing ROI.
But personalization can be costly. Customizing products means more parts, more complexity, and more mistakes. Or does it?
Visual product configuration makes configuring and personalizing complex products fast, easy, and accurate. Non-technical sales reps and end-customers can interact with 3D images on-screen to design highly technical products to their exact specifications. Product rules built into the back end of the software prevent mistakes, engineering inefficiencies, and production issues.
7. Streamline collaboration between sales, engineering, and manufacturing teams with CAD and design automation.
Engineering bottlenecks are another reason manufacturers steer clear of supplying customizable goods.
It’s all well-and-good sales teams using Fourth Industrial Revolution technologies like artificial intelligence and augmented reality to configure and sell products faster than ever. But without corresponding improvements in engineering efficiency, enhanced sales productivity only causes strain and delays downstream.
CAD and design automation solves this problem by automating the most time-consuming and repetitive engineering tasks. A visual CPQ solution like Epicor CPQ auto-generates CAD files, technical drawings, BOMs, CNC cut sheets, and more. The entire end-to-end process is streamlined, from initial sales interaction to finished product, driving efficiency at every stage.
The Most Significant Fourth Industrial Revolution Technologies
Digital transformation is driving the introduction of Fourth Industrial Revolution technologies within manufacturing. But digital transformation itself isn’t about technology. Instead, it’s about using new technology to deliver the products and experiences that your customers are actively seeking.
We’ve covered a few specific ways this can happen, from augmented CPQ processes to autonomous robots and AI-driven efficiency in the sales cycle and supply chain. However you plan for the future, ensure it’s about enhancing customer experiences–not just shiny new things.
“We must develop a comprehensive and globally shared view of how technology is affecting our lives and reshaping our economic, social, cultural, and human environments. There has never been a time of greater promise, or greater peril.”
― Klaus Schwab, Founder and Executive Chairman, World Economic Forum