Industry 4.0 : The stage is set for the next big manufacturing revolution !

Change is always required to move forward. Revolution means a dramatic wide ranging change in conditions, attitudes or operations. The world has gone through different revolutions. But if we talk about Industrial revolutions, which changed the way we operate and produce, we have seen only three.

• The Industry 1.0 was about steam and water and how they helped to mechanise the work.
• The Industry 2.0 was about the electricity and how it gave birth to mass production and assembly lines
• The Industry 3.0 was about the machines & robots and how they replaced the humans on the assembly lines with the help of computers.

Today we are on the verge of 4th Industrial Revolution: The Industry 4.0

What is Industry 4.0?

Technology is driving the 4th Industrial Revolution just like steam, water and electricity drove the earlier ones . It is based on the logic of “Everything is Interconnected Wirelessly in the Manufacturing Unit”, which means raw materials, machines, humans and products wirelessly communicate with each other over internet and drive production.

We know that IOT, automation and operation technology all of them already exist. What Industry 4.0 does is to integrate all of these elements for a highly digitalised, flexible and smart manufacturing industry.

Why Industry 4.0 is relevant for Manufacturing Industry?

The world’s growth and productivity is at a decline stage and we also know that this is not good for future generations. For everyone to continuously get a bigger share of the pie the pie size also has to increase. This is only possible when there is a giant and sustainable growth.

The first industrial revolution (Industry 1.0) was the answer to the issue of Malthusian trap — Each time new technology increased the efficiency of production, the population grew, the extra people ate up the extra produce, and average income again fell back to its original level. Industry 1.0 gave the giant push, which was required to escape out of the Malthusian Trap.

Today we are facing the problem of negative growth in productivity. If we look at one of the productivity analysis charts of the G7. We can easily see that the GDP Growth is at the continuous decline from the year 1975 .

Even though the developing countries (Such as: India) are experiencing a good GDP Growth rate we require a more big and sustainable growth worldwide to revitalise the manufacturing industry, which is only possible through an another revolution.

The Industry 4.0 is the solution to the long standing worldwide problem of slow growth in productivity!

The Three Basic Elements of Industry 4.0!

Internet of Things: According to World Economic Forum , “More than 50 billion devices are expected to be connected to the internet by 2020”. A lot of manufacturing companies are going to take the benefit of these connected devices and no doubt a good portion of these devices is going to be the part of production process.

Optimisation has always been at the centre of manufacturing. We always want to optimise the resources we use and the cost we incur. As the customer demand is changing from a mass produced product to a customised one, the mass customisation and its optimisation is going to be a great challenge for companies with old manufacturing units.
The companies need independent autocratic operating systems, which can self optimise at their own level and hence optimise production as a whole. This is only possible if each and every unit of manufacturing not only can communicate but also can control each other.

Internet of Things is the central element, which makes this granular level of communication , co-operation and control possible.

Cyber Physical Systems: For these new manufacturing units we need cyber physical systems. In these systems all devices, machines and materials are equipped with sensors and communication technology. The systems co-operatively communicate and control each other with the help of IOT.

Automation: We have almost automised every task with the help of robots but still there is a gap left. Some tasks, which only humans are supposed to perform on the production lines due to safety reasons, can now be performed by the robots with advance automation technology.

All of these three elements together facilitates Industry 4.0!

Application of Industry 4.0: Smart Factory KL and BMW

As we are seeing shortening product lifecycles and drastic change in the demands of customers. We require factories of the future, which can do mass customization and not mass production. We call these “factories of future” as “smart factories”, which are highly flexible and can easily adapt to the change in market demand. In these factories the raw materials or say the products communicate with the processing machines and tell them what exactly they are supposed to do with them.

One of the interesting example can be of a wine bottle consisting of a RFID Chip, which interacts with the machines on every phase of manufacturing and inform the machines on what needs to be done is a reality now at the Smart Factory KL (Germany) and not an alien idea.

BMW has already implemented the concept of Smart Factory. Automated Guided Vehicles move around in the production facility communicating and helping other vehicles and humans doing their tasks at Wackersdorf plant.

According to BMW, “The production time of a vehicle in the body shop and on the assembly line has gone from 40 hours in a traditional factory down to 20 hours in the smart factory”. To watch what happens at the Smart Factory of BMW Click Here.

Early Adopters of Industry 4.0!

All factories cannot become smart factories overnight. It will take years for this vision to become a reality for everyone. Even though it took more than 100 Years to replace a labor intensive manufacturing industry with a capital intensive manufacturing industry. The speed of this technology based revolution is blazingly fast and we can expect the smart factory market size, in terms of value to reach USD 74.80 billion by 2020 ( Source :

Early adopters are going to reap huge benefits. According to BDC early adopters of Industry 4.0 technologies ( Such as IOT ) as a manufacturer can lead to many benefits , which includes dramatic increases in productivity, revenue growth, product quality and customer satisfaction. The BDC survey of close to 1,000 entrepreneurs found that 60% of adopters say digital technologies helped boost their productivity.

But adopting to industry 4.0 requires a complete roadmap. The journey starts with rethinking about the information technology you use today. According to BCG for Manufacturers, “IT function will need to be strongly involved in operational excellence programs, because IT will be integral to initiatives aimed at improving operations and Obtaining new capabilities”.

The first step towards the convergence of Traditional Operational Technology and Information Technology starts with the adoption of Internet of Things.

Interested to know more about Internet of Things Click Here