A New Digital Industrial Revolution

As America plunges headlong into the fourth industrial revolution, the very way we live, work, and relate with each other are poised to change on a fundamental level. Even the way we produce and consume goods is set to be heavily impacted by what people are referring to as ‘Industry 4.0’. But what exactly is Industry 4.0, and what specifically does it mean for both businesses and consumers? First, a little history.

Industrial Revolution(s)

The first Industrial revolution kicked off sometime around the 1760’s and lasted until roughly 1840. It brought about massive changes to manufacturing by introducing water and steam power to mechanize production. Items such as textiles that had previously been painstakingly hand produced by skilled artisans were now being mass produced in factories. The second Industrial Revolution began sometime around 1870 and lasted up until the beginning of World War I in 1914. It was characterized by rapid developments in electricity, steel, and chemicals as cities grew and factories sprawled. With the introduction of the assembly line trains, automobiles, and bicycles became far more common and news and ideas were now spreading cross-country via telegraph and radio. Weapons and ammo (among other consumer goods) could now be produced at an alarming rate. The third Industrial Revolution began sometime between the 1950’s and the 1970’s and has continued into the present day. This time period is also referred to as the Digital Revolution and saw the introduction of electronics and information technologies to expedite and automate the manufacturing process. It saw the shift away from analogue mechanical systems and the gradual implementation of digital and automation technology into production lines. Mass production of computers, microprocessors, cellular phones, and the introduction of the internet mark some of the most relevant innovations to emerge from this time.

The Fourth Industrial Revolution

Now many people are beginning to realize that we are moving beyond the Third Industrial Revolution in unprecedented ways by not only furthering the speed and efficiency of production, but by blurring the lines between the physical, digital, and biological spheres. This new wave can be distinguished from the Third Industrial Revolution via three factors: momentum, breadth, and systems impact. The speed at which we as a whole are making technological breakthroughs has no historical precedent. While previous Industrial Revolutions progressed at a linear rate, we are currently experiencing exponential growth. Likewise, previous Revolutions impacted only specific industries where now nearly every industry across every country will be disrupted by massive changes. The breadth of these changes herald the transformation of entire production systems, as well as their management and governance.

Industry 4.0 Emerges

Born from the Fourth Industrial Revolution, Industry 4.0 encompasses many aspects usually not considered to be a typical part of industry. The rise of Internet of Things and smart cities, artificial intelligence, cognitive computing, and cloud computing are a few examples. Ultimately, Industry 4.0 is about transformation using new digital technology that enables the gathering of information and its analysis across machine networks and business systems. It will enable faster and more efficient production of high quality and individualized goods at significantly reduced costs. These changes will drastically alter not only how we produce goods, but it will also reshape how we view the workforce.

The Industrial Internet of Things

A major component of Industry 4.0 is the implementation of the Internet of Things (or IoT) into the industrial space. IoT refers to the addition of embedded sensors and internet connectivity to objects that were previously analog. This allows mechanical and digital machines to aggregate and share data amongst themselves instantly with zero human involvement. Industrial IoT functions as an elevated distribution control system that allows for full automation by using cloud computing to further refine and optimize production. This will serve to decentralize analytics and decision-making while enabling real-time responsiveness. When IoT is deployed into industrial and production settings, entire factories can run seamlessly without human presence. This is sometimes referred to as ‘lights-out manufacturing’ as the interconnected machines rely upon a variety of other sensors to complete their tasks without actually needing a lit facility.

Cyber-Physical Systems

The meshing of these intertwined digital and physical networks is also known as ‘cyber-physical systems’ or CPS. It is, in essence, the integration of computational, networking, and physical processes. According to multinational tech company Ericsson, “ Production environments will be self-configuring, self-adjusting, and self-optimizing, leading to greater agility, flexibility, and cost-effectiveness.” Through feedback and data generation, entire systems such as warehouses, production lines, shipyards, and even hospitals can automatically adapt themselves to new conditions on the fly. These kinds of self-learning closed-loop feedback systems are setting the standard for the future of industry by allowing smoother and more efficient operations.

Simulation and Cloud Computing

With fully integrated machine networks, advanced software can be used to simulate various approaches to factory operations in a completely risk-free environment. By simulating, testing, and analyzing process changes before any actual financial investment or real world disruption to production lines, businesses will save time and see increased returns on investment. Simulations are far more accurate and agile than traditional modeling methods such as spreadsheets. They also allow the testing of the manufacturing process at its maximum possible capacity so businesses can make better informed decisions about their capabilities.

The businesses needing simulation of their production processes don’t even need vast computing resources themselves, they can tap into cloud computing networks for all their analytical needs. Cloud computing spares companies from needing to invest into on-site computer servers, eliminating maintenance and connectivity restraints. Cloud computing also opens the door to things like software as a service (SaaS) and platform as a service (PaaS). Many popular businesses such as Netflix and Amazon already make use of these forms of cloud computing.

What Does This Mean for Consumers?

As manufacturing processes become more agile and efficient, consumer demands become increasingly complex and shift quickly. Businesses that relied upon traditional and inflexible multi-year strategies are quickly finding themselves falling behind their competitors. Pre-existing business plans are being revamped, even if they were still successfully generating revenue. What worked yesterday may not necessarily work tomorrow, and companies need to be ready to adjust to new demands at the drop of a hat. This means businesses must be ready to meet modern demands such as sustainability, social and ethical responsibility, and environmental safety. Consumers will have access to highly individualized products suited specifically to their needs delivered at price points they can afford.