What is Industry 4.0 & How Will it Affect your Business?
Category:
Insights
Date:
August 6, 2021
Industry 4.0 is the fourth industrial revolution, which we are currently in the middle of. It's an exciting and fast-paced period of technological advancements which is completely different from anything we've seen before.
But what does this mean for businesses?
In this article, we'll explore the opportunities of industry 4.0 for organisations by answering questions like "what are some pros of industry 4.0?" and "how can businesses prepare for industry changes?"
Industrial revolutions have had incredible impacts on society. They change our ways of working by introducing new technology to streamline operations, increase productivity and optimise workflow.
The first three revolutions were all about mechanisation and mass production, but industry 4.0 is different because it focuses on digital transformation, automation, robotics and artificial intelligence (AI)...
Between 1760 and 1830, we saw the first industrial revolution. Over the course of this era, manufacturing evolved from manual labour performed by people and work animals to an optimised form of labour. This centered around machinery that was powered by water and steam engines. These technological changes enabled the mass production of manufactured goods.
Jumping ahead 30 years, we find the second industrial revolution, from 1870 to 1914. This brought the introduction of steel and the use of electricity in factories and beyond. The introduction of electricity made manufacturing more efficient; mass production found a second boost and the assembly line was introduced during this time as a way to increase productivity.
Starting in the late 1950s, a third industrial revolution emerged as manufacturers began incorporating computer technology into their factories. During this time, manufacturers put more emphasis on digital technology and software, gradually introducing automation to streamline processes.
Since the early 2000s, Industry 4.0 has been leading the most phenomenal technology advancements in history, taking the previous emphasis on digital technology to a whole new level. And we're by no means nearing the end just yet.
Through the Internet of Things (IoT), Industry 4.0 focuses on digital transformation, automation, robotics and AI to bring a more comprehensive approach to manufacturing.
Industry 4.0 connects physical with digital and allows for better collaboration across departments, partners, suppliers, products and people. Empowering businesses through greater control of their processes and decision-making, Industry 4.0 allows business owners to understand every aspect of their operations in real-time.
The first question we need an answer for is "will industries go out of business because of industry-level changes?" The short answer is no! In fact, companies might be more likely to survive if they adapt quickly enough. There will always be a need for change, so the question is "how can businesses best move ahead?"
Industry-level changes may affect how your business operates. You'll have to adopt opportunities and manage threats in order to stay successful - but you don't have to do it all at once!
The first step is figuring out which aspects of your organisation should be changed and when. To help you get started, here are some questions that might guide the decision process:
Many businesses have begun their transition already or accelerated their transition in light of the Covid 19 pandemic. It is clear that industry leaders are leveraging technology solutions, with 39% having already implemented a central control hub to increase end-to-end supply-chain transparency.
How do you know when or if your business should invest in Industry 4.0?
If you’re able to check off most of the items on this list, it’s probably safe to start evaluating Industry 4.0 technology and solution providers and allocating the resources needed for deployment:
There are four things you need to consider:
Making organisational changes is no mean feat so it's important to prioritise which to implement first and to have a strategic plan of action for the gradual adoption of new technologies and new processes.
Companies can implement digital solutions in other places besides their factories. They can use them to fix problems that happen with operational challenges, supplies or at work, or workplace health and safety.
There are 3 core areas where manufacturers will want to invest in Industry 4.0 technologies.
Think demand forecasting, supply, production, logistics and sales/operations. Traditionally, all of these would be handled by separate teams, but 4.0 technologies allow these teams to collaborate transparently and improve end-to-end visibility.
Digital technologies can boost employee safety, operational efficiency, asset productivity and product quality, minimising manufacturing workforce disruptions.
Beyond basic communication and videoconferencing applications, more advanced solutions, such as machine-vision algorithms and wearable technologies are helping maintain safe distancing as operations restart.
What's more, data collection and analysis can be automated to reduce errors and inaccuracies, meaning the monitoring and evaluation of workforce performance and quality assurance can be sped up.
Warehouses present many opportunities for automation interventions such as shuttle systems, automated retrieval systems, smart shelves and drones to perform inventory inspection, to name just a few. Once an item has left a warehouse, digital and analytics solutions will make it easier to track logistics services from loading through transportation to unloading. Combined with digital fleet management and route optimisation, these technologies can increase the uptime of your transportation assets.
Industry 4.0 is affecting manufacturing in many ways. Whilst it brings many advantages, there are always risks associated with change - it's important for business owners to understand what this means for their company so they can make decisions accordingly.
Firstly, we are seeing changes in the workforce, meaning that employers need to make sure their employees have the skills necessary for industry-level changes and can be reintegrated into new types of work as they become obsolete. As a result, employers will want to invest time into retraining staff or find them a new position within the company if possible.
Secondly, companies may want to adopt industry changes by investing in technologies, for example: automating your warehouse with self-driving robots so you're not dependent on humans who might leave after their expensive training sessions.
Lastly, industry 4.0 changes will have a direct impact on customer experience. For example, if you're providing goods and services to customers remotely, changes might mean that your online store is no longer just about selling physical products but delivering immersive experiences that replicate an in-store activity.
The benefits of industry 4.0 for business and employees
The fourth industrial revolution has already created a lot of success for companies.
The move to industry 4.0 might allow companies to evolve their business model or what they offer. This could be because customer expectations are changing and evolving as a result of industry changes. Note: if you aren't adapting fast enough, your competitors will take your customers away from you!
This is always good news when it comes to revenue growth. Businesses should try to focus on how new markets can expand their organisation's reach. For example, self-driving cars allow delivery companies to increase their output. We've seen opportunities like this previously with social media changing the way we consume news, shaking up the journalism industry.
In sectors like IT, there are a lot of opportunities being created as technology evolves at a fast pace. 50 years ago, who would have thought there would be a job opening for creating robots or developing platforms to trade cryptocurrency!?
The industrial change also has many implications on businesses, employees and customers alike so it's important to understand what this means for your company before making any decisions about how you want to react/implement industry changes when they happen. Some possible risks include:
Industries that currently rely on a large manual labour force, such as agriculture, may be wiped out by industry changes - so what to do about this? Consider retraining employees in new skills or find them a new position within the company if possible.
It's important for businesses to understand how customers are changing their behaviour because of market shifts. Customers now expect more from the companies they buy products/services from which means business owners should rethink how they provide goods and services.
Changes at industry level will require new technologies and investments - this can be a risk for businesses because it means they might have to take on loans or financing options in order to keep up with their competition. When making decisions about industry-level changes make sure you consider both upfront costs as well as ongoing operating costs.
Industry 4.0 has both benefits and risks for businesses - although we're big believers that the benefits vastly outweigh the risks...
Technological advancements are improving both lifestyles and business procedures. In a world where remote work and global connectivity is the norm, what more could you want for your organisation than streamlined operations and happy staff?
Ultimately it's up to organisation leaders, managers and business owners to decide how they want their company to respond as industry changes happen. Having said that, industry experts might not be the best people to make decisions about what your industry should do next because of bias!
You may find a better solution by discussing options with an impartial, third-party digital expert. Discuss your organisation's adoption of Industry 4.0 technologies with our team - we'll design and implement the perfect solution for your business.
