The global Industry 4.0 market was estimated at USD 7 billion in 2019 and is expected to reach USD 21 billion by 2026, as more and more manufacturing companies are optimizing their digital transformation strategies. Industry 4.0, also known as the fourth industrial revolution, aims to create smart manufacturing machines and systems that are connected, automated and analyzed to improve production, reduce costs and optimize processes. However, the fourth industrial revolution still faces challenges as more and more data privacy regulations are being passed and the technical skills gap is widening.
In this article, we explore what Industry 4.0 is, where it came from, what its components and related technologies are, examples of it, and where it is heading in the future.
What is Industry 4.0?
Industry 4.0 is an ongoing movement to transform and automate traditional manufacturing and industrial processes and practices using modern technologies and tools. The term "Industry 4.0" was first coined by German scientists in 2011 to promote the advancement of artificial intelligence and automation in manufacturing, which was designed to advance the previous industrial revolution.
Industry 4.0 relies heavily on big data, IoT sensors and systems, and automation, and leverages an end-user perspective as a driver of technological innovation.
What are the benefits of Industry 4.0?
Industry 4.0 aims to create connected and automated processes using robotics, analytics, process mining and digital twins to generate growth in production, revenue and customer loyalty. Industry 4.0 brings many benefits, such as:
- Improve productivity:
- Shorten supply chain processes and reduce time to market.
- Increase resource efficiency through optimized asset and inventory management.
- Minimize mechanical and process risks.
- Advanced analytics in a predictive maintenance system can reduce equipment downtime by 50% and increase production by 20%.
- cut costs:
- Digital technology could save the top 100 EU manufacturers €16 billion in scrap and rework costs.
- The average cost reduction achieved by leveraging Industry 4.0 technologies is said to be 3.6% across all industries
- Enhanced Customer Experience:
- Enable product customization based on customer preferences and behaviors.
- Strengthen customer engagement and loyalty.
- Social benefits:
- Industry 4.0 will reduce the workforce and increase the number of job vacancies:
- 38% of businesses believe AI and automation technologies will enable employees to take on new, productivity-enhancing jobs.
- 25% of companies believe that automation will lead to the emergence of new roles.
- Industry 4.0 will reduce the workforce and increase the number of job vacancies:
What are the components/technologies of Industry 4.0?
Top technologies and components for the Fourth Industrial Revolution and digital transformation of manufacturing include:
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Advanced Robotics: Advanced robots are systems that combine the hardware sophistication of robots with smart sensors (e.g. ultrasound, light sensors, touch sensors, etc.), which makes them easier to train to perform repetitive and non-repetitive tasks in manufacturing environments. It is estimated that utilizing advanced robotics can reduce switching costs by ~15%.
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Autonomous systems : Autonomous things are devices that perform specific tasks autonomously without human interaction by utilizing artificial intelligence algorithms. In manufacturing, autonomous systems can gather information from their surroundings, adapt and make data-driven decisions without human user intervention.
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Cloud computing is used to store data and share it with business partners and employees instead of using local data storage.
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Cybersecurity: Cybersecurity solutions are designed to protect business data, including manufacturing processes, inventory, assets, costs, and customer data. Cybersecurity solutions may include homomorphic encryption, ransomware detection tools, and privacy-enhancing technologies.
- Sensors : such as Industrial Internet of Things (IIoT) and RFDI technologies
- Simulation : e.g. a digital twin of an organization
- 3D printing
- Virtual reality and augmented reality
- Robotic Process Automation automates repetitive GUI processes.
- Manufacturing Analytics: Used to analyze data collected from the manufacturing process and make data-driven decisions about products, processes, inventory, and assets, as well as deduce insights about customer needs and market trends.
What challenges does Industry 4.0 face?
Some of the major challenges facing Industry 4.0 include:
data privacy
Interconnection and cloud computing have significant implications for data privacy as they expose privileged business and client data to breaches and cyber-attacks. According to a Deloitte report, ~84% of businesses believe that the level of cyber risk will increase due to the adoption of Industry 4.0 technologies.
lack of technology adoption
Many businesses feel they do not have sufficient infrastructure to maturely implement the benefits of Industry 4.0. Only 14 percent of CEOs believe their organizations are adequately prepared to adapt to the changes brought about by Industry 4.0, and 20 percent feel their businesses lack any suitable infrastructure.
lack of technical skills
With robotics, artificial intelligence and analytics becoming the backbone of the industrial revolution, Industry 4.0 is destined to create more technical and maintenance jobs. The report estimates that cognitive technologies such as robotics, artificial intelligence, machine learning, and automation will create 2,025% of new U.S. jobs by 2025, and these jobs will focus on robotic surveillance, data science, and content management. However, many businesses report a lack of skilled employees in the areas needed to implement Industry 4.0. For example, in a 2018 survey of UK manufacturers, 88% of respondents said a lack of technical skills was the main issue holding back investment in Industry 4.0 technologies.
What is the future of Industry 4.0?
Advances in artificial intelligence, robotics and automation will lead to Industry 5.0 , which aims to:
- Putting humans to work with cobots.
- Upskill and reskill employees, especially digital skills.
- Take a human-centred approach while leveraging Industry 4.0 technologies.
- Implement a "lights out" manufacturing plant that relies on robots to complete processes and tasks even outside of business hours (i.e. when the lights are out).
Therefore, it is important for manufacturing companies to optimize their digital transformation strategies to keep pace with the rapid pace of industrial technology and revolution.