What is Industry 4.0? And what’s all the buzz around Industry 4.0?
Swie.io is an Industry 4.0 company that is creating the world’s largest distributed manufacturing network. We work with electronics manufacturers by retrofitting them to use our Industry 4.0 technology around the production line and we bring them to the 21st Century by being part of this distributed network. The goal of it is to push all the advantages that come from our process to our customers. As a result our customers get electronic products faster, cheaper, and with Swiss quality.
The agenda is we’ll start with the history of industrial revolutions. Then we will look at the trends driving Industry 4.0. and the drivers and enablers of the 4th industrial revolution. The challenges that companies face while adopting Industry 4.0.and of course we will present a brief road map for implementation. Let’s move forward.
The history of industrial revolutions
In 1784 it took place what was called and what remained in history as the first industrial revolution. Many people are starting using mechanical power to produce things. This is from movement of water and from movement of things. And we all know what economical developments this brought and how it helped people connect by using trains, and eventually producing physical products.
The second industrial revolution, even though some people attribute it to Henry Ford, it actually took place a bit earlier in 1870 when a slaughter house in Cincinnati changed to the use of conveyor belts. This leads to mass production and this second industrial revolution was fueled by the electrical energy, right? And then of course Henry Ford came with mass production that basically made it available to let’s say the public.
The third industrial revolution took place in the 70’s with the first PLC, programmable logic controller. This introduced basically automation in electronic systems and reduced the amount of manual labor. Between the 70’s and today of course some developments happened and maybe depending on the school of thoughts some people attribute somewhere in the 90’s they say that it was industry 3.5 that was mainly let’s say mass customization. So basically what Dell was doing, where you could order a laptop and make it your own with some pre-defined components.
However, that let’s say that the big industrial revolution is taking place right now. Where you have the cyber, let’s say the innovation is the cyber physical systems. It’s basically a set of algorithms controlling a wide area of sensors and of products. And while the 3rd industrial revolution focused a lot on hardware automation this 4th industrial revolution focuses a lot on software and on big data, and how we can use that big data to serve our customers better.
The trends that lead to Industry 4.0?
The trends mainly come from the customer side. The first important thing is choice. It’s the fact that customers do not want mass produced goods anymore. They want individualized products. So when Henry Ford started producing the famous model T, he said that his customer have a wide variety of choice for the color of the car, but they must buy it black. So that’s not the case anymore. Customers want hyper customized products.
Mass customization was the first step and Dell was one of the leaders in this domain with the customizing and with all the revolutions in the supply chain. But that’s not necessarily designed to order. That was more of a configure to order approach. If we were to make a comparison to cars of course and to colors of the cars, it would mean that customers would want their own shade of blue, not to choose between several shades of blue but to design their own shade of blue. And that is one of the trends that is leading towards Industry 4.0.
Consumption is another trend. Software is transition from product to service. If we are speaking about the car example the car is a product, but what the company is actually selling is the mobility service. This change in mindset helps us serve our customers in various creative ways. Of course the experience of customizing a product for yourself is connected to hyper customization, people are not necessarily buying a product. They are buying an experience. They are not buying a car, they are buying the experience of driving from point A to point B. They are buying the agility of moving.
Ownership is also well connected to experience. People are not necessarily tied to physical products anymore. They are tied to the ecosystem that is around it. So yes, the mind shift has changed.
The drivers and enablers
here are three main drivers of Industry 4.0 as agreed to by most experts.
The first one is digital and integrated processes in a company. So these are vertical integrated and horizontal integrated products.
What are vertical integrated products? This means that Industry 4.0 is not only about manufacturing. It’s about integrating everything from product development to purchasing to manufacturing and then to logistics. Only by having this holistic view of the enterprise Industry 4.0 can actually deliver benefits to your customers.
The second driver is the digital product and the in-service offerings. Again, as I was saying before with the trends you don’t necessarily sell a product, you sell an ecosystem around it. Companies are then able to deliver the most amount of value to their customers while generating the most amount of revenue.
The third driver is the digital business model where companies need to optimize customer interaction and offer a complete end to end solution. From the manufacturing perspective, one key aspect of Industry 4.0, starts with the smart operator as an enabler. And if you look at the Industry 4.0 and what’s happening right now everything is very much people centric. We talk about the customers, we talk about the people that use our products and services and we should think in the same way of the people that work inside our companies.
So smart operator means that instead of somebody being on the shop floor and waiting for a signal to light up so that they can go to a machine and determine the issue, they can be enhanced, for example, with augmented reality glasses. They can monitor cycle time in real time. They can see already what’s the issue is and know what’s the solution before reaching the machine. This saves time and this saves quality.
Products needs to become smarter and gather the data with in itself for analysis. So having a way to store data inside the product that you are manufacturing is one enabler of Industry 4.0 because then you can analyse that data, you have full trace-ability of the product, you have full trace-ability of any errors and problems that appear during manufacturing.
Then of course smart machines, machines that produce and that sit along the production line. They need to gather data, they need to report data up stream and that leads to the smart planner. There is a centralized unit that allocates resources based on the global strategy of the company. So this global strategy means enhancing the product portfolio, so manufacturing more products and reducing of cycle time and improving quality. And that’s the role of the smart planner.
The challenges in adopting Industry 4.0?
One key challenge is the lack of digital culture and skill inside the company. Going back to what I was saying earlier everything revolves around people. As long as inside a company there is no digital culture it will be very hard to implement Industry 4.0 standards in manufacturing. Industry 4.0 promotes a holistic view of the enterprise. It’s about gathering data, it’s about gathering data from manufacturing, it’s about gathering data from clients, seeing what clients need, what kind of products. And as long as those skills are not inside the company, the implementing Industry 4.0, it’s quite a big challenge.
A second challenge is big data versus smart data. With all the technology that exists right now you can collect all the data that you want. You can put sensors everywhere. But this doesn’t mean that it’s smart data. Companies and the institutions that want to implement Industry 4.0 need to be very careful about the data that they collect, because it can produce a lot of noise. And real patterns and real problems can be hidden by the noise around them.
Data accuracy and real time availability of data is an other challenge that is linked with the previous one. Once you have too much data the accuracy of it can become a problem and decisions become harder and harder to make.
The last two challenges I will discuss are connected to machine communication. Usually factories and manufacturing facilities have legacy equipment installed. Swie.io is involved in the electronics manufacturing industry and are seeing this problem pretty much everyday. Factories are using the same equipment that they have been using for the past 15 years. Making those machines communicate with each other so that each machine can be treated as a different vendor and having different software versions. That’s a huge problem. And that’s just in electronics although pretty much all the industries have the same problem.
Most likely this is a challenge due to Industry 4.0 still being something new and there are not a lot of use cases, people are reluctant of investing in Industry 4.0. Partly because most of the times it means that they would need to change all their equipment. This is actually something that we are working on intensively, helping factories, by providing them with a solution that is completely retrofit-able.
Industry 4.0 strategy implementation
Now that we have discussed the drivers, the enablers, and the potential challenges that some companies may face when implementing Industry 4.0 strategy, let’s look at a high level road map for Industry 4.0 strategy implementation. So if you truly want to implement Industry 4.0 standards and Industry 4.0 mentality inside your company, the first step is to actually build up a strategy.
You will need to evaluate which areas that you can implement and prioritize, especially since most will have limited resources. You have to start somewhere and most importantly align. Everybody in the company needs to be aligned and needs to know that this is a top priority for the company. Otherwise you won’t be able to serve your customers anymore or you won’t be able to serve the customers as you would like.
The second step is to design and to run a pilot project. You need to scope it, you need to prove the concept, and most importantly you need to work with outside experts. As a company for example, we have a lot of experience bringing in academics or talking to other startups that have new ideas that can breath some fresh ideas inside the company. Personally, bringing outside experts in is the number one most important things to do.
After that you must define the capabilities that you need. You need to know what is missing. After you’ve run the first pilot, you will have a total overview and you will be able to determine the skills gap. Again, people are the core of Industry 4.0, people are the key. They hold all the skills that you will need and recruiting the right people to fill in the gaps would bring you a tremendous advantage.
Further down the road you will need to master data analytics. You need to assemble teams that are cross functional in the way that they are able to exchange information and to find creative solutions. You will also need to be able to extract value out of the data which comes back to what I said earlier, think about big data versus smart data. Think about what you need to correct right now. You need to think big, you need to think of the global picture, but you need to act small. You need to act and say, “Okay, how is this corporate goal or this whatever we have in mind going to stream line to shop thought? What do we need to collect in terms of data here at this working station?”
And of course finally think about the ecosystems. Think about providing a complete solution for your customers — an end to end solution.
Swie is in the process of implementing the first pilot with a physical PCB assembly company from China. This has been a huge source of learning for Swie.io. I’m stressing this a lot, that there need to be pilot projects as the help both us and our clients learn more about their needs and what Industry 4.0 is all about.
With Industry 4.0 and with our solution, factories are able to produce a mix of products. As though they are manufacturing the same product over and over again. Through Industry 4.0 we bring the large scale advantage to low volume.
We are already considering other technologies like 3D printing or virtual and augmented reality for our clients. That is I would say a very important aspect and it connects with the idea of the smart operator. It enhances and introduces people from the factory into the manufacturing. It’s basically an easier way of getting information to them.
A first step could be to use wearables that transmit information about specific alarms and alerts along the production line. But most definitely the end goal is to have augmented reality feeding data directly into the operators.
3D printing of course is another key aspect of Industry 4.0 as it can shorten some cycles. Plastics manufacturing benefits from this greatly as well as ir being easier to prototype and to produce and manufacture it.
For many startups, PCB manufacturing and assembly processes are just services that they outsource. Manufacturing has zero value for a startup or for a company. Manufacturing’s ultimate goal is to reproduce what engineers have designed. If anything manufacturing subtracts value from the product as the designed product and ultimate product may not function as expected due to manufacturing errors. This is all with out even considering supply chain issues.
With Industry 4.0 it will be just a translation of what the engineer’s design into a product without subtracting the value and without adding specs, without startups or makers or engineers having to waste their time to setup supply chains and everything. And I think that’s kind of the beauty of Industry 4.0 because it simplifies everything.
It simplifies everything from a user perspective. You will be able to order your PCBs and your assembled PCBs in a quantity of one. To test your hypothesis faster. If you think about the product development life cycle with Industry 4.0 you will be able to iterate much faster. And you will be able to test your hypothesis whether they are technical hypothesis or marketing hypothesis or sales hypothesis. You’ll be able to test them much faster and you will be able to reach a pre-sale status faster and further on.