If you follow manufacturing news, you know that Industry 4.0 is the hot topic of manufacturing today. Forbes is talking about it. Fast Company is talking about it. Even LinkedIn has “Industry 4.0” listed as a skill.
But what exactly is Industry 4.0 and how does it affect those of us manufacturing products containing nonwoven fabrics?
According to a 2015 report by McKinsey, the consulting behemoth, over the next ten years, production facilities like factories and manufacturers will become less concerned with purchasing equipment and more involved in selecting sensors and 3D printers. And analytics will reign supreme.
What is Industry 4.0?
According to a report from PricewaterhouseCoopers (PwC), Industry 4.0 stands for the fourth industrial revolution. Rather than focusing on single automated machines in the industrial process, 4.0 is an integration of all digital assets, including integrating with supply chain partners. The whole point of Industry 4.0 is not just to automate a process here or a procedure there but also rather to digitize the entire production scale in from product development to purchasing to manufacturing to logistics to customer service. All data is available in real time across all key value chain partners.
Industry 4.0 doesn’t seem to be just a pie-in-the-sky dream, either. It’s not planned for “the future” but is happening now in real-time in boardrooms, meeting spaces and offices all over the world. In the PwC study, they gathered responses from 2,000 participants in nine industrial sectors from 26 countries. 75% of the companies surveyed expect to have highly digitized vertical and horizontal value-chain processes within the next five years. That’s up from the 33% surveyed who have digitized processes in place toy.
Additionally, 86% of survey respondents expect not only to increase revenues after implementing widespread digitization but they also expect to decrease expenses. That’s just smart business.
How will Industry 4.0 Affect the Nonwoven Industry?
1. Improve top and bottom lines at the same time. In the manufacturing world, it seems as if we’re always looking to cut costs to increase revenues. Certainly, implementing the principles of Industry 4.0 will mean a pretty hefty outlay of cash in the beginning. However, in the PwC study, companies surveyed expect to increase annual revenues by 2.9% while at the same time reducing expenses by an average of 3.6% per year. But manufacturing isn’t magic. How can this be accomplished without slashing the workforce or adding additional products? One way appears to be technical assistance. The systems can support human decisions by offering real-time data, solving problems and even doing tasks that are too difficult or dangerous for humans. Additionally, the integration itself means a more seamless connection not only within the production line but also within the entire chain of production. Continual communication between machines, humans and the supply chain will catapult production capacities to untold heights.
2. Data improves decision-making. The epicenter of any changes made to products, production quantities and services will be the customer. No longer will products decisions be made solely in the boardroom. Customers are now able to communicate their needs, desires and frustrations in real time. Companies who are implementing digitization company-wide (including product sensors) can respond to those needs, desires and frustrations almost in real time (and, depending on the product and the circumstances, in real time). Customized products will become the standard and those companies who can quickly establish a fully digital presence and react to customer needs quickly and efficiently will have a significant advantage over competitors.
3. More control over the supply chain. How many times have you experienced manufacturing delays because of a late raw material delivery? With real-time data available on every level of the production process and across the entire supply chain, companies should be able to alleviate many of today’s manufacturing snafus. Additionally, accountability will no longer be in question as data becomes available to everyone simultaneously. Automated processes triggered by actions can also help reduce or even eliminate any supply chain problems.
Admittedly, the implementation of Industry 4.0 is a little bit scary even to the most tech savvy of us. The thought of everything being tied into a digital process is at once awe-inspiring and terrifying. And there are certainly significant challenges involved, not the least of which is prohibitive implementation costs. But no one can argue that it is the way the world is going. And manufacturing has a chance to lead the way. Who wants to take the leap into Industry 4.0?