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Industry 4.0 – smart investments and smart factories

The arrival of the fourth industrial revolution has led to a growth in the creation of smart factories.

By Ellie Burns

84 percent of respondents to Capgemini’s global Smart Factories Report claimed to have a “smart factory” initiative in place, in which web-connected manufacturing processes based on advanced automation and robotics are deployed alongside big data analytics and the internet of things (IoT) to improve the productivity, quality and efficiency of a factory.

In the same report, over half of the manufacturing executives surveyed (56%) said they’d invested over $100 million in such initiatives over the last five years, with 20 percent claiming to have invested $500 million or more.

The report forecasts that half of all factories could be “smart” by 2020, and that the increased productivity this will enable is set to contribute an additional $1.5 billion to the global economy by 2022. There are just five years to wait to see if this will actually happen.

For manufacturing businesses to get from where they are today to a future characterised by digital manufacturing and high levels of automation, requires a transition that impacts not only the factory floor, but the broader business and the supply chain beyond it.

 

Everything changes

Industry 4.0 isn’t just a different approach to management, it’s also an entirely new way of managing the supply chain.

The umbrella term Industry 4.0 denotes ultra-short lead times, on-demand production, and mass customisation, and represents an opportunity for manufacturers, regardless of their size, to compete on a global stage.

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The traditional value chain, in which each link is buffered by large stocks of inventory – from factory to wholesaler, wholesaler to retailer, and retailer to customer – is deftly sidestepped by digital connectivity. By interacting with online product configuration tools and web-based ERP order-taking systems, customers are able to order products directly and, once the order has been received, manufacturing and fulfilment can follow automatically.

While some manufacturers prefer to retain their traditional non-digital processes, they will need to acknowledge that the industry as a whole is increasingly embracing digitisation. As Capgemini’s report reveals, half of manufacturing businesses in the UK, France, Germany and the US are ready to implement a smart factory initiative—with the efficiency and productivity benefits they offer—if they aren’t already.

Shifting away from convention

The new style of manufacturing, brought about by Industry 4.0, represents a definite shift away from conventional business models and the traditional value chain. To advance down the digitisation route, investment is required, although not solely in new manufacturing technology. Back office systems need updating, for example, customer-facing web applications must be developed, plus there’s a greater emphasis on the importance of analytics.

Workforce profiles will begin to adapt to the changes, with less emphasis placed on traditional manufacturing skills compared to skills in digital manufacturing, robotics and automation.

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Like other industries, manufacturing is experiencing a global skills shortage with too few qualified engineers and individuals remaining in the profession—as recent industry reports have highlighted.

The 2017 Engineering UK: The State of Engineering report, for example, indicates an annual shortfall of at least 20,000 engineers, and forecasts that 186,000 people with engineering skills will be required each year from now until 2024 in order to meet the country’s manufacturing needs.

There is also an issue with the perception of manufacturing. A career in manufacturing is imagined by some as being the same as it was one or two generations ago; as a decent-paying job that involved long assembly lines, manual labour, and loud machinery. According to a US study published in 2016, 71 percent of young people don’t see manufacturing as being a high-tech career option.Public Sector

Therefore, to close the skills gap and inspire millennials to study engineering and pursue a career within the industry, misconceptions must be dispelled and the next generation of employees enlightened to the reality of modern manufacturing.

 

Embracing the concept of the smart factory

A perception issue can also be applied to the concept of the fourth industrial revolution, which has triggered a fear in some that automation and robotics will dominate manufacturing and replace the need for people in the workforce. These fears are unfounded as underlying business model hasn’t changed; instead, the focus is on the business benefits the new techniques and technology can offer.

Additionally, no matter the level of automation and robotics required to form a smart factory, skilled operatives will be needed to ensure their tasks are completed accurately.

Digital manufacturing is, fundamentally, a series of connections that join customers to business processes and production technologies. By making those connections, and viewing each one as a step on the digital manufacturing journey toward Industry 4.0, manufacturers will soon enjoy the benefits that the smart factory can bring.

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