What’s the latest on Industry 4.0? We’ve been following (and driving) smart manufacturing transformation for a number of years now. But over the last few years (particularly through the pandemic), the world has shifted and so has manufacturing.
But what about the technology?
In the first part in this series, we looked at some of the barriers to adopting Industry 4.0, including the frustration caused by new technology that wasn’t quite there yet.
So, let’s take a look at whether the technology, adoption, and ideas have changed in the last few years.
But first, let’s start with some basics…
Industry 4.0 is another way of saying ‘The Fourth Industrial Revolution’. It summarizes the transformation currently taking place in manufacturing around the world, as companies increasingly move towards digitalization, connectedness, big data, analytics, automation, AI, internet-enabled devices, and more.
Prior to Industry 4.0, you’d find a lot more paper on the factory floor, no screens, a lot more operators, and manual processes.
Now, you might find:
Industry 4.0 has a lot of potential benefits. Improved efficiency, overcoming workforce shortages, better accuracy, and better-informed decision making.
Despite this, few manufacturers are satisfied with their progress.
Research by McKinsey suggests that around 70% of Industry 4.0 transformations fail to achieve their stated objectives. And a survey in late 2019 found that just 44% of companies were implementing changes sitewide and just 38% were integrating beyond the factory itself. This means that most implementations weren’t making it beyond their initial pilot phase.
So… why are so few manufacturers satisfied with Industry 4.0 (or at least, their implementation of it)? And why do so many implementations get stuck in phase one?
To understand why people aren’t satisfied with Industry 4.0, it helps to look at the theory.
Gartner developed the Hype Cycle, which is a way of graphing people’s expectations of technology over time, with five distinct stages:
Companies can use this model to decide whether it’s the right moment to invest in a new technology. Most will wait until the ‘slope of enlightenment’ when technology begins to become more mainstream, although there are benefits from being an earlier adopter, too.
This begs a simple question…
Unfortunately, the answer isn’t so simple. Industry 4.0 is made up of a lot of different technology innovations at varying stages of development (and expectations).
For example, if you look at Gartner’s Hype Cycle for New Emerging Technologies in 2020, you can see a number of data and AI-related innovations in the ‘Peak of Inflated Expectations’, while others still sit firmly in the ‘Innovation Trigger’ phase.
But other Industry 4.0 technologies have been around for decades. And in fact, some of the core concepts and technology behind Industry 4.0 have been around since the 1940s. Check out this general history of Industry 4.0 components:
So, is anything about 2022 Industry 4.0 actually new? And why are we only really seeing Industry 4.0 implementations now when so much of the technology has existed for decades? What’s changed in the last few years?
There’s a lot of prerequisites that go into implementing new, innovative concepts and producing technology that actually works. Especially when that concept pulls together multiple innovations and components that rely on each other to deliver outcomes, which is the vision for Industry 4.0.
Consider all the steps that may be involved:
We’ve also seen significant advancements in recent years in data storage capacity, internet speeds, wireless connections, data security, graphics, video, and voice — all of which are coming together to enable Industry 4.0 concepts.
With this in mind, we can get clearer on why Industry 4.0 is now becoming a reality. But how close are we to seeing Industry 4.0 technologies reach maturity and widespread adoption?
At some point, new technology crosses a performance threshold, and goes from being a novelty to a practical solution that’s faster, easier, or more accurate than alternatives. It might be enabled by another hardware/software/innovation that’s suddenly become available or better. Or it might simply go through incremental improvement over time.
Only a few years ago, talking to Alexa, Siri, or Alexa might have been a novelty for homeowners, with voice commands misinterpreted more often than not. But after years of incremental improvements, many people today rely on these systems to set reminders, build shopping lists, and manage calendars. And increased adoption of these technologies is fuelling further learning and innovation.
In the coming years, we’ll see more Industry 4.0 technologies cross this performance threshold and enable new Smart Factory capabilities that weren’t previously possible.
Overall, we’re still in the early days of Industry 4.0 when you consider the overall vision, which involves much greater integration across existing and emerging technologies. Although it feels to many of us that Industry 4.0 has been here for many years now, in the grand scheme of things, the fourth industrial age is only just beginning.
Some of the hype is real. But some of the hoped-for capabilities are yet to be realized.
And many companies have yet to jump onboard. A Deloitte survey found that just 10% of companies surveyed had comprehensive Industry 4.0 strategies. And only 4% of surveyed executives said that integrating Industry 4.0 technologies was very important.
That doesn’t mean you need to hit pause on your Industry 4.0 implementation or strategy, though.
Companies can certainly begin their Industry 4.0 implementation and lay the foundation with lower risk technologies that are well-established. If you’re realistic about the capabilities of newer technology, you can design your strategy and implementation to integrate and experiment with new innovations as they become available.
As an early adopter, you’ll get to see the technology evolve before your eyes (and maybe even play a role in shaping it). You may get to enjoy the benefit of new technologies sooner, whether that’s greater efficiency, improved speeds, lower costs, or something else.
To look past the hype and understand what’s real, start with a solid strategy that’s realistic about what new technology can do. And be ready to experiment and integrate at the right time.
Looking for an Industry 4.0 solution that maximizes the capabilities of technologies available right now? OFS is an AI and IoT-enabled manufacturing monitoring solution that improves efficiency, reduces waste, and boosts profits. We’ve been around since 2006 (we’re older than the term ‘Industry 4.0’!) and companies all over the world use our integrated hardware and software to develop their own Smart Factory capabilities.