The digital transformation in the manufacturing sector: the future factory 4.0

The Industry 4.0 advanced the automation through digitization and networked production with cyber physical systems and cloud computing which created the smart factory.

The 1st industrial revolution started with mechanization and the use of steam power. In the Industry 2.0, the mass production and assembly lines have been emerged. The Industry 3.0, it was the turn of computers and automated machines that were created to take the workload of the assembly lines. The Industry 4.0, it advanced the automation through digitization and networked production with cyber physical systems and cloud computing (autonomous technologies and robotics).

Let’s begin by taking an example of the impact of one of the Industry 4.0 technologies; IoT applications. The IoT applications could deliver in 2025 trillions of euros in new economic value to the manufacturing, according to several consulting companies. By adding end-to-end intelligence, many factories can extract insights from industrial data, optimize & secure operations, & unleash new transformative services. The IoT applications include scalable hardware architecture, full security, pre-integrated hardware and software solutions. They can  predict maintenance, improve yields, upgrade quality and be managed remotely.

The manufacturing decision makers must shift their paradigm and adapt a new mindset to successfully position their entreprises in the market via the solutions offered by Industry 4.0, and by the digital economy innovations. This revolution emphasizes that the worker must be more qualified and use his logic in his duties rather than doing repetitive tasks.

1. The evolution of Industry 4.0

Technology trends such as advanced analytics, machine learning, the IoT, cloud computing and human-machine interfaces have been changing the industry. The smart factory employees must be empowered with the technological solutions to execute their tasks efficiently such as ERP, CRM, Customer Experience Mapping. The machine learning has been solving a lot of issues in the manufacturing sector and is the reason of the development of Smart Factory. The IoT with the machine learning can save manufacturers millions of euros per year.  For example, the live product performance will enable companies to enhance their products in an efficient way. The products can be tested via Augmented Reality before they reach the assembly line to save money and time.

2. Impact of Industry 4.0 on SME in the manufacturing sector

Consumers constantly want more personalised products and services to get a unique experience. To accomplish a personalised production, more complicated processes, higher skills and flexibility at the factories must be implicated. The production and supply chain become agile to meet clients demands. The new technology such as IoT, Big data, Machine Learning, Blockchain, Cloud computing impacts enormously on the development of Smart Factory, and its adaptation by factories . The digital transformation helps the development and the growth of SME. Companies of all sizes and sectors can benefit from the industrial applications and the technology at low cost to compete in the competitive globalised market. 86% of surveyed manufacturers expect cost reductions and revenue gains from their digitization efforts over 5 years, according to a report by PWC.

3. Industry 4.0 effects on the economy & society

The offshoring has failed in a long term perspective, because of high transportation costs and the increase of salaries in Asia. The reshoring is the current tendency due to the positive outcomes of digital transformation. The offshored factories are unable to deliver a personalised experience in a short duration for its clients. Consequently, the industry 4.0 contributes into reshoring and production development. Industry 4.0 rebuilds the industrial ecosystem that will lead to the development of the industrial rural areas’ infrastructure.  

4. Industry 4.0 in the French context

The manufacturing sector allowed France to develop its world-renowned know-how. Since 1970, the manufacturing sector has been in decline due to the offshoring of a lot of its factories that led to unemployment and social tensions. The digital economy offers a multitude of technologies that contribute in increasing the productivity and the quality of manufactured products. We must face the fear of change by communicating and explaining to the unions that the digital transformation has a mutual benefit to the company and to the worker, as he will be able to increase his skills. The French ministry of economy has created the French Fab that has the mission to promote French industries around the world and to enhance their competitiveness via the digital transformation.

The organisations must face the internal resistance by convincing the employees that the change is a transformation need for the organization as well as for the common interest, and that the technology is added value to the job and to their skills. It’s evident that we need always the emotional intelligence and the critical thinking of humans in order to make a successful digital transformation.

The digital transformation is essential for enterprises, and the Industry 4.0 is the only way to guarantee them a future in the industry.  the Industry 5.0 is at the door steps that will encourage the cooperation between man and machine as well as the reduction of industrial waste that will contribute in reducing significantly the factories pollution.

Do you think that small and medium manufacturers can cope with this revolutionary transformation?