The industrial revolution has gone through many stages over the last few centuries to reach where it is today. It began from the days of extremely simple machines which were manually operated to hydro and steam-powered machines. The next revolution was the era of plants powered by electricity, and today, industrialisation has moved into the digital industrial era.
Today, Factories use IoT, AI and machine learning, automated guided vehicles, robots and COBOTs and automated systems to improve efficiency and production. As a result, the velocity of execution is now much faster, enormous, and accuracy has never been as real as it is today.
Journey of Industrialisation
Each phase of industrialisation adopted a certain technology or a combination of technologies for developers that made it unique. To reach where it is today, industrialisation has undergone several major phases of development over the last centuries. The earliest was when mechanisation started, and water and steam power made production easier.
Many years later, electricity was generated, bringing another revolution into industrialisation. Production moved away from manufacturing a few products to mass production and thus gave a significant boost to the global economy. We had another long period that passed, and we then started to see the advent of electronics and IT systems. It not only ensured an increase in production but also ensured a higher level of accuracy. Industrialists began to use computers, information technology, and automated systems. Technologies continued to increase and get adopted, and newer ones kept emerging at a closer pace until today. The third revolution transitioned into Industry 4.0.
Characteristics of Industry 4.0
The fourth industrial revolution is characterised by a number of features
Increased level of Automation
The first and second industrial revolutions were characterised by a very high level of unpredictability and a lack of visibility in the entire production process and the supply chain. Automation began with the third evolution, and the fourth revolution is taking it to the next level.
Automation provides higher predictability, accountability, visibility, and transparency through data collection from intelligent systems. The Data provides accurate information on the number of units produced, rejected numbers, rate of spillage, etc. We can obtain accurate data from the time raw materials enter the system to when finished goods arrive in the warehouse and are distributed after that.
Bridging of the physical and the Digital World
Once a finished product leaves the factory, the manufacturer might not control which path it follows or where it eventually ends up. The manufacturer might not know how the product is being used and cannot gauge user experience unless they get regular feedback from the end-user. This is only one-way communication from the digital to the physical world where the product originated.
In the fourth revolution, we have two-way communication, connecting the digital world to both ends – the factory and the end-user. For example, cars with IoT enabled telematics devices can be fused with software that sends regular feedback to the manufacturer irrespective of its location as long as they have connectivity. The manufacturer can constantly monitor the product, use the data, and glean insights to improve future products or improve the ones already in the market.
Personalised and Customised Products
Customer needs are constantly changing, and today superior customer experience differentiates one brand from another. In the fourth industrial revolution leveraging the power of IoT and AI, manufacturers can offer products and services that are more customised and personal, tailoring to the specific customer needs. Manufacturers can also innovate around their business models to offer products as a service.
Efforts to Embrace Industry 4.0 Technologies Post-COVID
In 2020, industrial digitisation faced its biggest test to date. Confronted with the largest health and economic crisis in recent history, companies across varied industry sectors were forced into extraordinary measures to take care of their employees' safety and well-being, maintain operations, and ensure business continuity. While some organisations were content with keeping the operations running in the face of worker shortages, raw material shortages, etc., the others struggled to keep up with the sudden spikes in demand. As a result, supply chains were badly disrupted over the last 22 months.
Now, did the fourth industrial revolution or I4.0 like IoT, AI, AR/VR, etc., help those companies in their efforts?
The answer is a resounding YES.
As per a Mckinsey study earlier in 2021, where they surveyed more than 400 global enterprises, including some in India, on how they coped with the pandemic, the survey results highlighted three outcomes:
- A win for companies that had already scaled digital technologies
- A reality check for those that were still scaling
- A wake-up call for those that hadn't started on their I4.0 journey.
If you look at it specifically from an India standpoint, we have seen many medium-sized, and large industries across different sectors accelerate their industry 4.0 Initiatives post the pandemic.
For example, cloud adoption increased as many enterprises moved their applications to the cloud, many organisations used RPA automation tools to automate their processes, etc. to improve agility, IoT adoption increased to a certain extent, especially for use cases around remote monitoring of assets, video intelligence and smart wearable solution to track employee health and safety, digitisation and digitalisation of supply chains especially fleet management and asset monitoring.
We had also seen a number of POCs convert to live projects, but many of those implementations have not scaled. This is a global problem where many IoT POCs remain in Pilot Purgatory and are not scaling. The IoT mantra is very clear- Think of the BIG PICTURE, START SMALL AND SCALE FAST.
In the manufacturing sector use of digital technologies for use cases such as condition-based maintenance, energy optimisation, quality monitoring/predictive quality, supply chain digitisation saw traction.
However, as per a CII EY Future of Manufacturing survey released in November 2021, some of these projects are early, and there is a lot to achieve. Moreover, as per the same survey, a fair number of manufacturing companies have accelerated their digital transformation journey due to the pandemic but seem to have a long way to go before they can reap benefits in the long term.
The Indian manufacturing sector (contributing almost 17 percent to India's GDP) is apprehensive about the benefits of embarking on an end to the digital journey. To achieve resilience and operational excellence through I4.0 adoption, manufacturers should have a consistent vision of the concept and ongoing POCs to deliver promised results.
There are other sectors in India as well like agriculture, healthcare, energy and utilities, govt initiated smart city projects which need to see the pace of adoption of Digital tech to increase Many I4.0 projects have been largely focused on cost optimisation, improvement in efficiencies, productivity improvement all-important KPIs – but we also need, especially for manufacturers to innovate around their business models to unlock new revenue streams, improve CX, etc.
One key aspect is to leverage the power of data and for organisations to treat it as a strategic asset and a source of competitive advantage.
The Indian market is huge (a huge number of MSMEs who are unable to get started yet ), and the realisation is now dawning on the industry that the adoption of I4.0 is needed for survival and growth. So there are opportunities for the solution providers – startups, telecom service providers, system integrators, device manufacturers, chipset providers, niche IoT and AI solution providers, etc. There are also enough drivers for growth as we should expect IoT device cost to come down over a period of time, the cloud is getting democratised, AI adoption is expected to pick up and will become mainstream, and when we have 5G networks that are expected to be rolled out later this year, this will trigger a lot more adoption.
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It can be daunting to determine how to get started and implement Industry 4.0 solutions in an organisation's manufacturing processes. There are, of course, different challenges in adoption – complexity of OT- IT Integration, data security and privacy, compelling RoI that organisations are looking for and hence subdued initial investments, lack of skilled workforce with digital skills, leadership, culture, change management, etc. However, these challenges can be overcome over a period of time.
Instead of profoundly analysing which type of implementations drive higher efficiency, it's essential to adopt a phased approach in which Industry 4.0 solutions are implemented to improve specific sub-processes. On the other hand, such implementations often fail to materialise business goals due to a lack of executive oversight and a skills gap. Manufacturing companies can overcome these challenges by collaborating with consulting partners whose proven expertise in Industry 4.0 systems helps drive successful implementations.