A closer look at Industry 4.0

By Arno Ham, Chief Product Officer, Sana Commerce.

Industry 4.0 or the Fourth Industrial Revolution has been tabled as a radical change ahead for the manufacturing and production sectors. It'll be brought through the integration of the Internet of Things, cloud computing, data integration and other 'game changing' technological developments as the new 'beating heart' within production and manufacturing systems.

So much so that it's being termed 'the next revolution in industrialisation'. The idea is that all of the individual processes that factory machines currently perform in silos will be merged in the cloud, meaning the workflow, upkeep, and management of each machine or series of machines can be done remotely. And of course ultimately it could mean machines doing work currently undertaken by people.

Within a manufacturing system Industry 4.0 relies on Cyber-Physical Production Systems (CPPS) – in other words software-enabled machines that, in addition to computing power, have embedded sensors and actuators that can self-diagnose and make decisions based on their state.

Three highlighted benefits of Industry 4.0 are:

  • Productivity – integrating machines and software will make it possible to complete more intelligent manufacturing processes without the need for human intervention
  • Profitability – because the systems are communicating and deciding appropriate actions and responses, resources, time required to manufacture, and the costly waste created in the process, should reduce.
  • Personalisation – incorporating technologies such as 3D printing into the sector could enable personalised products to be manufactured much more easily and widely.

Q: Are your customers thinking about Industry 4.0 today?
A: In some sense yes but in others, no. When we ask our manufacturing customers what questions keep them awake at night invariably the common answers are "how can we increase sales?", "how can we get more repeat customers?" and "how can we find new ways of keeping up with the competition?" This would suggest that their prime focus is on the external market, not internally on how they can join machines, systems and processes together.

However, the various tenets of Industry 4.0 all ultimately relate back to achieving these external goals. Improving productivity means manufacturers can serve customers better and increase loyalty; increasing profitability enables them to be more price competitive thus selling more to more customers; and product personalisation gives them an entirely new competitive edge. So actually, Industry 4.0 is right in their sights, but they possibly haven't realised its connection to their external goals quite yet.

The reality is however that the average manufacturer is still grappling with some of the basics needed to realise Industry 4.0. As our e-commerce systems 'feed' off a manufacturer's core ERP, we see first-hand how many are still at this fundamental stage of development. Many are moving their core data off disparate systems, spreadsheets and paper and onto a single enterprise platform in the cloud; this is a foundation stone for Industry 4.0 and this is the stage many organisations are still at today.

Q: From an e-commerce provider's perspective what do you see as your likely first steps into Industry 4.0 with customers, and what might the longer term look like?

A: Firstly it's really important that manufacturers don't separate internal and external facing business operations. While Industry 4.0 might focus heavily on internal changes, integration with the outward facing systems of the organisation is vital if productivity, profitability and personalisation benefits are going to be translated into increased sales.

How might that look relatively soon? Let's think about how sensors are being embedded into products and how the Internet of Things could drive aftermarket sales. A commercial coffee machine manufacturer could introduce sensor technology that automatically places replacement parts or new capsules in the customer's e-commerce basket. A supplier of mattresses and beds to hotel chains that promise a comfortable night's sleep could include sensors that trigger a re-purchase after a specific number of sleeps or level of wear and tear. These are real examples that we are seeing customers think about today.

In the future it's likely that we'll see much fuller and more complex 'machine to machine to machine' interactions that involve the entire design, production, sales and delivery process. For example, a customer wants to configure a product to specification. If they could do this through an enhanced webstore that included a customisation module (just like how people customise their characters in computer games), this webstore or the ERP system it was using could then talk directly to the 3D printer or even the machines required to do the work. Once the product was ready the ERP could then talk to a drone or driverless vehicle-based logistics system to get the product to the customer on time. We're probably talking five years before we see this happening, but early adopters are playing with Proof of Concept already. In my view IoT across the full supply chain is an imaginative future but not realistic yet.

The eventual benefits could be much bigger. It's not just about making the purchase to manufacture to delivery process as effective as possible, there's also the power of the data being collected by joining all of these systems in the cloud. Purchasing trends and patterns drawn from e-commerce and ERP activity could feed into how machines work and what they do. They could automatically switch production to more seasonal product lines for example, or even predict what customers are going to buy in order to kick start just in time manufacturing processes so that a personalised product is rolling off the production line, precisely as the customer orders it.

We may even see production machines driving new product sales through e-commerce based recommendations. Let's say one customer orders a specially configured product which is 3D printed. Machine to machine analysis may determine which other customers could benefit from the same product, instructing the e-commerce platform to recommend it to them. In this way machines and systems are using artificial intelligence to create more sales from new product lines. e-commerce intelligence will become increasingly vital as machines start to understand customer behaviours within Industry 4.0.

Q: What do you think will be the barriers to success around industry 4.0?
A: Technology readiness is a critical factor. Manufacturing is a diverse sector, both in terms of size of company and also the types of products being produced, which vary massively. As a result there are some manufacturers who are very technically advanced but others to much lesser degrees. Until the basics are in place such as a standardised ERP as a single data source and a cloud IT strategy, machine to machine, and machine to human interactions are going to be limited.

As with any new area the industry needs to skill up. With Industry 4.0 data will become the manufacturer's new currency and they must have people with the data science capability needed to make sense of it all. That's a big skills shift and while we're seeing more evidence of teaching in this area it will take a while before these skills are embedded and valued by manufacturers.

Then there are regulation, security and privacy concerns. Completely new ways of working will need to be regulated to ensure that they don't flout privacy rules for example, especially if more and more data is being shared between different systems. What are the data use and protection rules in these scenarios? Cloud, 3D printing, sensor technology. These things and more are the seeds for Industry 4.0 but the conditions for growth still need determining.

The final challenge is culture; the issue of potentially replacing people with machines that do the working and thinking. What will the legalities of mass workforce replacement be if it happens? Will these people be re-employed in a different way? In some sectors people will still be highly essential within production processes and we could well find ourselves operating alongside 'machine workers'. What will be the rules and regulations that surround working collaboratively with machines and how will people respond to this new type of 'colleague'? This is all to be determined.

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