What is Industry 4.0, & Should an SME Care?

What is Industry 4.0, & Should an SME Care?

1280 397 Purnima Madaan

The first industrial revolution arrived in Great Britain and lasted from the mid-18th century to 1830. During this period, factories that earlier relied on cent percent manual labor migrated towards the machines. In a gist, the first revolution introduced machine manufacturing to the world. There was a shift from an agrarian economy to the one that was led by machines. The second industrial revolution spread further from Britain into Europe and America. The period focused on improving the productivity of the factories. The division of labor, uniformity in the operations, and introduction of the assembly line by Henry Ford primarily dominated this period. Then came the period of automation, the third industrial revolution, when technology took the form of computer programs, and one could see computers controlling almost every aspect of the industries. A decade ago, another term – the fourth industrial revolution was coined in Germany. The ideas that were shared and the concepts that were discussed were far from materialization, fancy, and ahead of the time. Some futuristic companies and industrialists had a vision about how the next generation of industries and companies would function, but no one had the ‘real’ clarity. Nevertheless, today, industrial revolution 4 is a reality. The latest installment talks about the digital transformation and online communities, not just of humans but also that of the machines (Internet of Things).

Source: Netobjex

Experts believe that it was in 2015 when the 4th industrial revolution started with its foundation in digitization. Like the earlier industrial revolutions, the 4th version focuses on involving technology in the complete value chain as well. However, the current revolution stresses on using digital capabilities more than anything else. The new-age industrial revolution looks at information and data as an asset, a concept that had never considered before. The companies are focusing on using the information at hand in the best way possible. New methods are getting devised to record any sorts of data. Big Data, Machine Learning, Robotics, Artificial intelligence, and Natural Learning have become the jargon for the upcoming generation of industries. If experts are to believe, I4.0 is like no other revolution that has ever happened. Therefore, industries, not just in Singapore, but around the world, need to channelize their energy in a different direction.

What is Industry 4.0?

The industrial revolution that focuses on enhancing the output of manufacturing industries by machine learning, interconnectivity, real-time data analysis is called Industry 4.0, or I4.0. Within I4.0, the factories get equipped with machines that have wireless connectivity, sensors, and creative ways to capture and process data for analysis and improvement. The seamless connectivity enables the machines to share information, and advanced algorithms help the devices in making decisions. The complete process minimizes the need to have human intervention in the manufacturing process, effectively reducing the chances of error.

Source: Aethon

While many companies may like to limit the connectivity to within the company premises, but I4.0 comes with capabilities to extend decision making to machines and devices outside the manufacturing unit. For example, machines can enable them to place an order for raw material in another organization on their own using cloud computing and artificial intelligence.

Industry 4.0 is also known as the concept of a “Smart Factory.” Within such factories, the processes are supposed to be modular and monitored and processed by cyber-physical intelligence. What enables these factories is the concept of the Internet of Things – a network of machines that can communicate and connect and humans in real-time in the same and different locations across the complete value chain.

Design Elements of Industry 4.0

Industry 4.0 has 4 design principals that can be used by companies in determining and implementing the latest trends in the technology that can enhance their output.

Interconnection – The devices, machines, and sensors can communicate and connect with other devices and humans via the IoT concept.

Availability and transparency in Information – The concept of I4.0 relies heavily on data and useful information. The devices, machines, and practices getting implemented under I4.0 should be capable enough of recording, receiving, and sending the data as and when required. The information is used by other stakeholders in the value chain to make the decision and improve the output.

Help with technology – Smart factories fitted with technology can assist the humans involved in the value chain to understand information and make informed decisions. The technology should also work as an enabler of a quick problem solver. The cyber-physical systems involved in the value chain should be firm and smart enough to conduct tasks that are otherwise unpleasant and exhausting for humans.

Decentralized decision making – With the availability of information, decision making can be decentralized. The machines should be allowed to make individual decisions and behave in a particular manner under specific conditions on their own. The algorithms in the complete setup should be implemented in a way that enables the machines and the humans to work independently, without having to wait for an approval in cases where there is no conflict of interest. In the case where a dispute or a bottleneck arises, decision making can be done in the old school way.

Strategies for I4.0 Solutions for Singapore SMEs

Data and connectivity form the two most fundamental parts of industry 4.0. It is essential to understand that while I4.0 talks about adopting technology, it is not a technology in itself. Therefore, implementing I4.0 without a strategy can be confusing and fruitless. Thus, the first step towards achieving I4.0 needs to begin with a strong business strategy – what are the aspirations of the business? Does the company want to focus on reducing costs or increasing quality? Is the business comfortable with relying on technology? Can decision making power be distributed and programmed into the machines? Does the company require a plan B if the customer does not require the new product? How much can business invest in automation?

Answering these questions helps the SMEs in understanding the degree of I4.0 that can be accepted and implemented into the system.

To get a clearer picture, SMEs should break down the complete manufacturing process (value chain) into modules. These modules should also include external systems like vendors and outsourced operations (if any). Next, the SMEs can reimagine these processes individually and how automation can be used to enhance the output after each step. During the evaluation, the business owners should also address the compliance and legal issues and any other kind of risks involved. Successful implementation of I4.0 focuses on the 4 design components shared earlier.

How can SMEs Leverage Data?

Every sensor and output port in a machine captures several bytes of data that can be put together to draw patterns and deduce complex equations that can assist the businesses in making better decisions. The principles of I4.0 demand that this data be fed back to the system so that decision making can be decentralized and machines can operate on their own.

Source: Freepik

The Internet of Things (IoT) get used to achieve such connected networks of machines. Another way to make use of all the data that the sensors capture is by:

  • Enhance the traceability of the material
  • Improving the quality of the output
  • Dynamic machine configuration as and when the raw material changes
  • Improved logistics
  • Reduce lead time
  • Faster movement of goods from one station to another
  • Improved inventory management
  • Minimize wastage
  • Better production planning

How to Implement Industry 4.0 in an SME?

If I4.0 can improve the quality of the output, reduce manufacturing time, minimize wastage, and even enhance the worth of the complete value chain, then why aren’t companies shifting to the new trend quickly? The answer is either a lack of knowledge or a lack of resources.

The big companies have already realized the benefits of I4.0, and they have created co-teams to implement smart manufacturing processes in different parts of the value chain. However, the SME sector is yet to adapt to the new technologies in a transparent manner. These are mostly due to a lack of funds or staff to form dedicated I4.0 teams. Therefore, SMEs might need to plan the implementation of I4.0 and take out a sizeable budget depending on the degree of automation that the companies plan to undertake.

SMEs can also onboard a technology partner who can guide the company in adopting easy and more affordable ways to go digital. The partner can help the company in creating a roadmap for I4.0 implementation while ensuring that the company never loses its sale or value. The only challenge of partnered implementation is to ensure all the stakeholders are thinking and moving in a single direction. The harmony among the stakeholders forms an integral part of I4.0 implementation since a strong and common foundation is the first step towards successful automation.

Purnima Madaan

Purnima is a digital entrepreneur and likes to share her thoughts on business development and marketing. She likes to watch documentaries, read about customer psychology and review financial products. When she is not busy finding opportunities for her clients, she loves to indulge in fashion magazines and watch movies.

All stories by:Purnima Madaan
1 comment
  • Thanks for information on Industry 4.0 PURNIMA,
    Industry 4.0 relies entirely on the Internet, machine learning and real-time data analysis. It reduces manpower and helps SMEs to cut costs and give more to its production. Industry 4.0 is a revolution for markets and SMEs. 4.0 data in Industries is also safe and secure as it is cloud based and has very little chance of being lost. I 4.0 can improve quality output, also reduce its manufacturing time and no wastage of anything.

Leave a Reply

Purnima Madaan

Purnima is a digital entrepreneur and likes to share her thoughts on business development and marketing. She likes to watch documentaries, read about customer psychology and review financial products. When she is not busy finding opportunities for her clients, she loves to indulge in fashion magazines and watch movies.

All stories by:Purnima Madaan