Manufacturing is one of the principal economic activities that human beings have been actively engaged in over the last two centuries. To be more specific, ever since the invention of the steam machine in the 18th century, manufacturing factories and companies related with machinery and technology have been working and developing new tools to enhance their production and obtain better profits. That historical step is what many call the First Industrial Revolution.
Then, a Second Industrial Revolution took place at the beginning of the 20th century; when we discovered electricity and started using it for powering mass production, leading to many other discoveries through the century. In the last few decades, the invention of the internet, computers and advanced electronics created a way of manufacturing that justifies what is called the 3rd industrial revolution; Indeed, we started automating various processes and increasing human workforce started to be seen as less and less as the only means to keep up with a growing industrial output.
Today, the virtual world is taking over the manufacturing industry – a world which consists of technological innovations such as the Industrial Internet of Things (IIoT), Artificial intelligence, advanced robotics, sophisticated sensors, cloud computing and 3D printing. These technologies help companies establish a digital integration of multiple interdependent operations – which has brought the manufacturing world to its next major milestone. Those technologies are part of what we call today: “Industry 4.0”; yes, nowadays we can say that the Fourth Industrial Revolution is here!
This “Industry 4.0” movement started in Germany as a government-sponsored project to enhance productivity and flexibility in manufacturing companies. Since then, it has been spreading to other countries like the US, Japan, China, Nordic countries and the United Kingdom. New technologies are being developed right now, and manufacturing enterprises are evolving to the next level of innovation. Manufacturing was previously viewed as a demanding job, where workers needed to do difficult, hazardous and very repetitive tasks. Well, that is changing! As the world evolves, manufacturing evolves too!
Companies such as BASF, Bosch, Volkswagen, Daimler, Deutsche Telekom, Klöckner & Co., Trumpf, Siemens, and GE have already adopted this movement and they are clearly seeing benefits in their production lines. Here are some examples:
Volkswagen is digitally integrating everything they produce. Today, they are able to produce a single customized car at the same cost as mass producing vehicles having the same standard design (without the losses of stopping the production). Thanks to their new processes, Volkswagen is able to customize and produce every car with the custom specifications that their customers ask for. They are also able to monitor every single step of the production through a single screen that helps them see what is being produced and how it moves across the whole production chain.
Volkswagen is also enabling robots and humans to interact and help each other which helps them combine precision with expert judgment. They also use smart data to spot bottlenecks, or any other issues in production; available 24/7 with just a few clicks. Another interesting thing about VW adopting Industry 4.0 is the fact that they are now working on the digital transformation of their design department so that they can run tests and build new products by following the same best practices that have a proven success on the production line.
This is another good example of implementing Industry 4.0. The company is working towards what Jeffrey R. Immelt (CEO of GE) calls a digital company inside an industrial company. GE is using sensors and controls all over their products to analyze and improve the way they produce them.
They have adopted a culture of simplicity that allows them to perform their internal operations under conditions that are fine-tuned to maximize performance. While a direct correlation may be unclear, GE credits this culture change to their improvement in performance both in terms of revenue and growth. During Jeffrey Immelt’s management, the company’s share price reached a record high. During this time, GE also launched the GGO (Global Growth Organization) in January 2011. They were able to achieve an overseas revenue of over $67 billion, which was also significantly higher than their previous years. All of this would not have been possible without the implementation of Industry 4.0 as a global strategy for the company.
Last, but not least, the company that arguably started the Industry 4.0 movement, as we know it! This company, Siemens, is one of the biggest in its field with more than 348,000 employees, they develop various types of technology and machinery generating more than $93.78 billion in revenues in 2016.
Today, Siemens is taking innovation to a whole new level, as they have been able to make their production chains automated and digitized by using sensors, scanners and smart data, among many other things. Siemens’ teams are increasing efficiency, productivity, quality, and flexibility by digitizing their entire production process. Due to this, they have seen an eightfold increase in their production volume and efficiency in the last 20 years. Today, they have connected each part of the company through the cloud, which makes the data flow through each stage very easy.
They are also able to monitor each part of their production lines through a single screen where they map the flow of their products. They have an automated quality control system in place, where nonconforming items are taken off the line with little or no human intervention!
In all areas of work, technologies are evolving in an exponential way and manufacturers around the world have to be aware of this. It might be too soon to say, but these success stories strongly indicate that the companies that have the capability to leverage these technologies are the ones that will grow and remain standing for a very long time.
As Jeffrey R. Immelt said, “Change must be in our DNA, we have to compete in today’s world to solve tomorrow’s challenges”.