How Industry 4.0 is Shaking Up Manufacturing

How Industry 4.0 is Shaking Up Manufacturing


Aug 25, 2022

Blog Manufacturing How Industry 4.0 is Shaking Up Manufacturing

Industry 4.0 embraces a new era of interconnected technologies. While the first industrial revolution saw the rise of steam power and mechanisation on a mass scale, the fourth industrial revolution or Industry 4.0, anticipates a mass cyber-physical overhaul.

Cyber-physical systems, the Internet of Things (IoT), cloud computing, and cognitive computing are the cornerstones of Industry 4.0. With market growth in this area already considerable, it is more a question of not if, but when it will become mainstream. In the run-up to 2023, BCC Research has predicted investments in Industry 4.0 will reach $21.7 billion. This impressive figure proceeds a period of steady growth, with compound annual growth rates at around 23.1% since 2018.

Diving Deeper into Industry 4.0

Industry 4.0 carries a multitude of implications. From being overused in marketing tactics to being portrayed as a mechanistic threat to factory workers, pinning down a definition can be tough. But at its core, it simply refers to the increasing automation of industry through information technology.

The four cornerstones of Industry 4.0 will, in theory, revolutionize manufacturing. Cyber-physical systems, the IoT, cloud computing and cognitive computing will enable flexible and efficient operational processes. Costs will be dramatically lowered. Scale and profitability will increase.

With human intervention still a necessary element to most stages in the manufacturing process, Industry 4.0 will inevitably shake up the industry. Digitalisation and robotics are not new to manufacturers, but they have yet been fully augmented with wireless technology. With the implementation of Industry 4.0, machines can function and operate in an interconnected fashion. Data can be passed along a network of computers, machines, and sensors. Automated decisions and decentralised processes to be carried out.

4 Key Principles Driving Change

Just as a technological framework underpins Industry 4.0, there are also a set of concepts driving change. Industry 4.0 was conceptualized with four key principles designed to move manufacturing processes forwards.

  1. Interoperability
    For decades, manufacturing companies have used purpose-built systems for each stage of the manufacturing process. While previous systems have used robotics and automation, they have not been designed to communicate interdependently across the process. Industry 4.0 aims to break down these barriers by forming a network of interconnected technologies. This is generally considered an application of the Internet of Things, or in this case, the Industrial Internet of Things.
  2. Information transparency
    Data is enormously valuable to business owners. But dense layers of processing systems have clogged information streams, rendering vast chunks of information inaccessible to manufacturers. Industry 4.0 seeks to solve this by digitally replicating the physical. By mapping out physical systems, data can be streamed into viewable technology in real-time, allowing for information transparency.
  3. Technical assistance
    Bridging the gap between the physical and digital will benefit engineers when providing technical assistance to manufacturers. Information will be aggregated and visualized. The goal is to leverage information to make better decisions, especially in real-time. Collaborative robotics is considered a key component of this, as cognitive robots allow for reactionary assistance to both technical and corporal problems.
  4. Decentralized decisions
    Currently, decision making happens at multiple levels: high-level, involving overall process plans in the value-chain, and low-level, with decisions concerning actual physical processes. Industry 4.0 allows for real-time decision making at the point of action, based off a wealth of immediate and accessible data.

Key issues facing Industry 4.0

As with most things, there are challenges ahead for Industry 4.0. Manufacturers need to address several issues before systems can be fully and seamlessly implemented.

  • Labour displacement
    Low-skilled repetitive jobs will inevitably be replaced by robots in Industry 4.0. The Economist has estimated that automation poses a threat to 50% of jobs – making a major portion of the workforce vulnerable. Governments will need to rethink the formation of the workforce to account for job losses. Not only this, but employers will likely have to reckon with a workforce resistant to automation. While opportunities for skill elevation and development may become available to the current workforce, it is yet unclear what form and what volume this will take.
  • Lack of skills
    The rollout of cognitive machinery will inevitably cost jobs. Likewise, there will be an emergence of specialist and highly technical roles that will prove difficult for employers to fill. New skills and expertise will be needed to maintain and operate systems, requiring manufacturers to implement new training programs or compete over valuable candidates.
  • Inflation
    Inflation reaching an all-time high may stunt the implementation of Industry 4.0. Supply chain disruption and increased commodity prices are stifling manufacturers’ investment into new technologies, with Manufacturing Tomorrow reporting that optimism among business owners is declining.

Industry 4.0 will inevitably drive enormous changes in the world of manufacturing. These changes are symptomatic of a greater societal shift towards automation and IoT-based operating systems. Still in its early stages, the full impact of Industry 4.0 is yet to be determined, and with several obstacles for manufacturers to overcome, the path may not be smooth. Though if implemented effectively, the outcome will be nothing short of revolutionary, recalibrating the entire framework of manufacturing. Automation offers the potential to free up resources that can be directed towards more fulfilling and impactful tasks.

BCC Research’s report deep-dives into the Industry 4.0 market, dissecting recent regional trends, key players, and market opportunities. To get to grips with the full scale of this vital market landscape, consider buying the report in full here. Or, become a member of the BCC Research library and gain access to this report among a host of other relevant reports in your field. Get in touch today to find out more about the benefits of membership.

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    Olivia Lowden

    Written By Olivia Lowden

    Olivia Lowden is a Junior Copywriter at BCC Research, writing content on everything from sustainability to fintech. Before beginning at BCC Research, she received a First-Class Master’s Degree in Creative Writing from the University of East Anglia.

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