The term Industry 4.0 has become a key concept in modern manufacturing, but still there are a lot of misinterpretations about its meaning, and most importantly about how it is going to transform the manufacturing industry.
Industry 4.0 refers to the fourth industrial revolution, the usage of Cyber-Phisical systems, IoT and Internet of Services to revolutionize, again, the manufacturing industry.
The first industrial revolution, at the end of the eighteenth century, introduced the mechanization of manufacturing: manual production became more efficient by developing and leveraging mechanical tools fueled by water and steam power. It was the beginning of the factory model.
The second industrial revolution (or technology revolution), at the end of the nineteenth century, brought mass production into the picture, thanks to extensive use of machinery, the introduction of electricity and electrical communications and a reduction of distances due to increased railways coverage. It was the beginning of the assembly line.
The third industrial revolution (or digital revolution), in the second half of the twentieth century, introduced the use of digital equipment to control and automate manufacturing processes.
The fourth industrial revolution or Industry 4.0
The 4th industrial revolution, leverages technological advancements in both the physical and digital world to increase manufacturing capability and efficiency. The 4th industrial revolution introduces Cyber-Physical Systems into the manufacturing world and leverages the internet as a key media for sharing and collecting information, as well as driving distributed, intelligent decisions back to physical processes. Introducing a Smart ecosystem.
The key components that allow Industry 4.0 to come to life are:
- Cyber-Physical Systems: are electro-mechanical devices with connectivity and digital communication capabilities.
- Internet of Things (IoT): is the network of physical objects that use sensors to capture data and embedded connectivity to exchange it over the internet. Typically, the Internet of Things refers to consumers’ products which are often not equipped with actuators (as a Cyber-Physical System)
- Industrial Internet of Things (IIoT): is the declination of Internet of Things to the manufacturing world.
- Internet of Services: refers to the usage and combination of IoT devices and applications to provide services to end users and to other components of the ecosystem.
It is easy to misinterpret Industry 4.0 and think about it as a beautified, internet-based Industry 3.0, but there is a fundamental difference. In fact, while Industry 3.0 focused on automation and simplification of processes thanks to the digital technology, the overall control of the process was still heavily centralized and human driven.
Industry 4.0 instead, focuses on Smart Equipment, that can interact together and make real-time, expert and aware, decisions. Those Smart equipment, integrated, work together to give life to Smart Factories.
New opportunities and business scenarios
Industry 4.0 is designed to make manufacturing more efficient, but it also creates the foundation for new business models for the industry. This becomes clear by looking at some of the Industry 4.0 design principles.
Interoperability, for instance, means that all components of the ecosystem should be able to communicate and exchange relevant information with each other and with humans. So for instance, equipments should be able to communicate operating conditions to each others and automatically rebalance the workload in case of changing conditions.
Decentralization means that those decisions would be taken collectively by the smart network, without the need for a centralized or human intervention.
Imagine for instance a network of Smart Forklifts operating in a Warehouse. In the Industry 4.0 world, when one of them has a malfunctioning hydraulic pump, the others immediately pick up its workload to avoid disruptions. All this would happen in real-time and decisions would be smart because they are based on information available to the Smart network, not to the single Smart Equipment. In parallel, the Smart forklift would request assistance and provide diagnosis information.
Furthermore, Service Orientation implies that Industry 4.0 should enable new business models in which services can be leveraged via the Internet of Services. The ability to create products that can be monitored and managed remotely in real-time through the Internet of Services, for instance, allows to create business models in which the ownership of a product is replaced by a service oriented, pay-per-use model.
For instance, car manufacturers could approach a different business model in which it’s not the vehicle to be sold to customers, but the service it provides. So the vehicle would still be owned, monitored and managed by the manufacturer, and users would use a shared resource, and pay based on actual usage.
Industry 4.0, also leverages the Internet of Services to create Modular manufacturing opportunities, since all components of the ecosystem are designed to integrated, this also allow to shift from the one size fits all to extremely personalized scenarios, in which customer have complete control over the final product.