In the past 50 years, we’ve seen the introduction of home computers, the internet, smartphones, and tablets. This period of time is sometimes referred to as the Third Industrial Revolution.
We are now entering into what has come to be known as the Fourth Industrial Revolution, or Industry 4.0. Let’s take a look at how this revolution is impacting the business world, particularly for manufacturers.
What is Industry 4.0?
The fourth industrial revolution is the new advancement in technology which is moving so fast that it is combining the fields of computing and science into the physical and biological environments. This is the type of revolution that goes beyond just building a faster computer or a better smartphone. It enters some of the following fields:
- Internet of Things (IoT) — Computers are no longer the only devices connected to the internet. Now, everything from your refrigerator to your doorbell, to the light switch on the wall is communicating and accessible via the internet.
- Artificial intelligence (AI) — Reaching beyond big data, scientists are working to create computers that can think and reason for themselves, without a programmer standing over them. This isn’t about a program selecting from a few pre-programmed reactions. It’s about allowing a program to come up with creative new solutions entirely on its own.
- Virtual Reality (VR) — We’ve all heard stories promising totally immersive virtual worlds, for decades, but that reality may be just around the corner. Modern VR headsets can display highly realistic graphics and allow you to interact with a computer-generated world as if it were real. This technology is popular in the video game industry, but many companies are exploring ideas that could bring VR into the general market and other applications.
- 3D Printing — A relatively new technology, 3D printing is already making a far-reaching impact on the business world from fields such as health care to construction and manufacturing. As this technology evolves, 3D printers may become common household devices.
What about the other industrial revolutions?
Industry 4.0 is a natural progression from the three previous industrial revolutions. If you missed these during history class, they are:
- First Industrial Revolution (1760-1840) — The First Industrial Revolution was largely centered in Europe and the United States and featured the beginning of what we think of as machine-based manufacturing. This period saw a huge growth in textile production as this was the first industry to become industrialized. A lot of this manufacturing development came from the harnessing of steam and water-power to fuel machines.
- Second Industrial Revolution (Late 19th-Early 20th Centuries) — This is also sometimes referred to as the Technological Revolution and features a shift from steam-power to gasoline and electricity. It’s also important because of the introduction of mass production due to the assembly line and interchangeable parts. Finally, the telephone and telegraph began the era of widespread communication.
- Third Industrial Revolution (the 1950s to 21st Century) — This revolution is sometimes referred to as the digital revolution. This includes the creation of computers and robotics which have evolved over the past 60 to 70 years, getting smaller in size but with greater computing capacity. Everything that we think of in terms of modern technology—computers, the Internet, smartphones, HDTVs, and more—were born out of this revolution. One thing which actually made this more successful was the rapid decrease in technological costs which made the products more affordable and widespread.
So, what does Industry 4.0 mean for the state of manufacturing? First, it emphasizes that companies must be willing to embrace change. Sticking to your “tried and true” way of running your business could soon put you in the same position as those using steam power when electricity was introduced. Change is inevitable and it needs to be embraced if you want to stay competitive.
When it comes to Industry 4.0, there are some pretty compelling data to back up why your manufacturing business needs to embrace this change. For instance:
- Industry 4.0 is expected to add $3.7 trillion in value to the manufacturing industry worldwide.
- IIoT (Industrial Internet of Things) is poised to massively change the industry for those who are amongst the first wave of adopters. In fact, one prediction expects the average maintenance cost to drop by 30%, and the average productivity rate to increase by 30%.
- To show you how quickly this change is happening, think about this—The number of businesses that are expected to be highly digitized in the next year has more than doubled since 2016, going from 33 to 72%.
- Finally, the automotive industry anticipates a $28 billion savings in cost reduction due to this changeover. This is just one of many areas in manufacturing that are being impacted by Industry 4.0.
Ultimately, you have to create a mindset of being willing to change for the better. Changes to your industry should only be embraced if they can make improvements to the way things are done.
What Manufacturers Can Do
Once you’ve learned to embrace change in your life and work, you’ll see that there are many areas in manufacturing that can benefit from Industry 4.0 technology. One of these is the advent of CPQ (Configure, Price, Quote) software.
CPQ software simplifies the process of designing configurable and custom-built products. Customers no longer have to wait weeks for the engineering, manufacturing, and sales teams to analyze and calculate the cost of building a customized product just to provide a price quote.
Instead, the whole process is streamlined by software that takes the specifications, calculates the materials needed to make such a product, evaluates what materials are on hand, and then sets a price quote within a few minutes.
Companies that decide to implement CPQ software typically see their business expand and revenue increase without reducing their staff. Along with increasing productivity for sales reps, engineers are freed up to work on developing new and improved products, rather than evaluating orders from prospective customers.
Automation has always been scary because it suggests that people will be replaced by robots. Instead, we need to embrace this next step in manufacturing by realizing that this allows people to do other jobs in the company that can help move everyone forward.
Embracing the Revolution
In today’s economy, it’s absolutely necessary to embrace change and continue innovating to stay afloat as a company. You can’t hold on to “quaint” ideas about technology if you want to survive. Those who still have rotary phones, electric typewriters, and beepers will tell you that they couldn’t possibly compete today with these outdated pieces of equipment.
The same will be true for those who do not embrace automation and cloud-based software. These individuals will be left behind by the coming Fourth Industrial Revolution and the drive towards more technological development.