It is where digitalisation moves completely into the industrial sector. When devices meet cloud and sensors trigger decision making based on machine learning.
Nikola Tesla predicted in 1926 that we would have a connected world with video phones and instant access to everyone across the globe. The world would be like a huge brain, all connected. We are certainly getting close to that. And the path there is full of change.
Something that I regularly encounter in my dialogue with industrial companies is technological hesitation. I believe most understand the value of new technology but don’t see the reason to act just yet. “We will look at this later”, is a typical answer, especially when talking to small/mid-sized manufacturing businesses. It might be difficult to see the added value right now.
This digital revolution puts most companies in a risky situation. Not adapting and challenging status quo could be the end for many and to a disadvantage for most. Before going there, let’s take a look at the fundamentals.
What is manufacturing?
Manufacturing is where raw material is turned into finished goods, simply put. The goods can either be sold to another manufacturer or to end consumers. The process could be fairly simple and also extremely complex.
Historically we have been through four industrial revolutions.
- 1784 – Mechanization by Hydro & Steam Power
- 1870 – Electrification, First Assembly Line
- 1969 – First Programmable Logic Controller
- Now – Industry 4.0, Digitalisation
Manufacturing was at first dominated by human skills and long tough hours. Industrialisation 1, 2 and 3 later happened and the process was more automated and included more and more efficient tools. Volumes increased and efficiency programmes made the difference between success and failure. Henry Ford’s assembly line is an example of number two. And what we are used to in today’s environment is number three where some humans are replaced by robotics.
What did we learn from history? The ones who drove change and fundamentally improved their business reached long term success. History proves that.
So where is manufacturing today?
Generally speaking, one step away from full transition into step number four.
We see industry leadership taken over by those who innovate and try new things - those who move into stage four first. Smarter manufacturing, better processes and more data will drive revenue up and costs down. Because better insight mean better business.
We are now standing in front of a big shift within the industrial sector, where some organisations will remain strong and some will slip.
What is going on in technology? And how is this correlating with industrialisation?
Technology is taking a major leap into every sector becoming integrated in all departments and industries. The IT department serves everyone and provide the tools allowing the organisation to function and prosper. Technology is changing businesses and take up a larger piece of the budget. The importance of IT is growing.
Where are the synergies, and the value?
As you understand from the previous four industrial revolutions, it is easy to see where industrial companies are heading. Data-driven connected factories working more like brains rather than traditional mass production. Impressive.
This is just where the value and synergies are to be found. Gathering the data from machines and various sensors will allow you to better plan purchasing, maintenance and decrease amount of faulty good. Just to mention a few things. There are endless possibilities. The more you know, the more you can do.
What is Industry 4.0
It is where digitalisation moves completely into the industrial sector. When devices meet cloud and sensors trigger decision making based on machine learning. A lot has happened since the first industrial revolution.
In my opinion there is no reason to wait. No reason to neglect. Just reason to act.
Digitalisation is the only way from now. For all industries. I believe that adapting and investing in technology will save organisations a big chunk of money and allow for success and growth. Not adapting will most likely put you in the opposite direction.
There is a reason why Amazon is outgrowing Wal-Mart. New times require a new mind-set.
Read more about IoT: How organizations can accelerate their progress so they don’t fall behind