Home Business What Savvy Entrepreneurs Need to Know About Industry 4.0

What Savvy Entrepreneurs Need to Know About Industry 4.0

by Olufisayo
Industry 4.0

Smart factories are poised on the leading edge of the Fourth Industrial Revolution (4IR), according to a new statement from the World Economic Forum and McKinsey & Company. McKinsey has identified 30 smart factories around the world that have overcome the initial barriers to Industry 4.0 adoption to deploy 4IR technologies at scale. The purpose of the study is to use these factories as case studies to inform the manufacturing community of the best practices for implementing Industry 4.0, which McKinsey projects will add $3.7 trillion in value to global manufacturing.

As the Fourth Industrial Revolution gathers steam, it’s vital for entrepreneurs to stay informed on the latest 4IR innovations that their competitors are already adopting.

Here’s a look at three key things that entrepreneurs should know about Industry 4.0.

Industry 4.0

Industry 4.0 Is Connected

One of the key infrastructure innovations driving the Fourth Industrial Revolution is the transformation of the internet into the Internet of Things (IoT), linking digital connectivity to physical production and logistics processes. GE, which has been on the cutting edge of 4IR implementation, calls this development the Industrial Internet of Things (IIoT), and predicts that it will benefit 46 percent of the global economy, generating $225 billion by 2020. IIoT technology connects devices and sensors distributed throughout the manufacturing process together into a coordinated system, allowing information from one part of the system to be shared with other areas for analysis and optimization. For instance, sensors can analyze how factors such as factory temperature and moisture levels affect production, enabling these variables to be adjusted for optimal productivity.

The Industrial Internet of Things also connects production teams to customer-facing areas of companies and customers, enabling smoother integration of processes such as marketing, sales and customer service. For instance, if market research projects high seasonal demand for a product, production can automatically be scaled up accordingly, and logistics preparations can be made to handle anticipated shipping surges. Manufacturing departments can also connect directly with customers over the IIoT, improving ability to gather input from clients and to offer enhanced customization options. Entrepreneurs who embrace this trend can expect improved customer satisfaction, translating into better sales.

Industry 4.0 Is Smart

One of the major benefits of IIoT connectivity is the ability to analyze data coming in from devices and sensors in order to optimize business processes. This has led to the rise of the smart factory, where the power of big data analytics is brought to bear on production. This is enabling companies to identify constraints on production and remove them in order to boost productivity. For example, Audi digitally simulated an entire plant in San Jose Chiapa in Mexico prior to starting operations, enabling bugs to be worked out ahead of time so that the facility was able to achieve its target volume within the first year of operation.

This smart capability has a dramatic impact on productivity. A Capgemini study projects that smart factories will increase manufacturers’ production capability seven-fold by 2022, with ability to deliver products on-time increased by a factor of 13. Meanwhile, labor costs will fall shrink to one-ninth of current levels. Over three in four manufacturers either already have a smart factory initiative or are in the process of implementing one, making it imperative for competitive entrepreneurs to keep up with this trend.

Industry 4.0 Is Automated

The smart capability of the Industrial Internet of Things brings an unprecedented level of automation to 4IR manufacturing. When IIoT sensors detect production factors that need adjustment, the needed adaptations can be implemented automatically by sending the information on to the appropriate software, streamlining operational efficiency.

One of the big benefits of this for manufacturers is the ability to implement predictive maintenance procedures. For instance, by using 4IR sensors to monitor part replacement schedules and performance, a smart factory system can predict when a part is about to wear out rather than waiting for it to stop functioning. An order for a critical part such as an o-ring can be placed with a supplier such as Apple Rubber automatically ahead of time to make sure there is no lost production due to maintenance lags. Predictive analytics can increase equipment uptime and availability by 10 to 20 percent while cutting maintenance costs by 5 to 10 percent, Deloitte estimates.

IoT connectivity, smart productivity and automated efficiency are three of the key Industry 4.0 features that entrepreneurs should know about. Entrepreneurs who leverage these trends will gain an advantage on their competition by increasing their efficiency, reducing their labor and costs, and growing their profit margins.

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