Industry 4.0: the smart factory and the future of manufacturing


Industry 4.0, the name given to the latest industrial revolution, describes the digital transformation taking place globally within manufacturing. As the industry steps into the future, we’re witnessing the beginning of the transition to the Smart Factory, incorporating cloud computing, cyber-physical systems and artificial intelligence. The idea of automation is nothing new in manufacturing, but Industry 4.0 is reaching far beyond the automation of linear supply chain operations and advancing manufacturing technology into flexible systems that use a constant stream of data, learning and adapting to demands.

Why do we need smart factories?

A smart factory provides a level of connectivity and agility previously unseen (and indeed, unachievable) in manufacturing. Organisations have an increasingly complex supply chain, and elements of production are multi-site, in many cases spread globally. It’s more vital than ever to take a proactive approach to manufacturing that can respond quickly to changes in demand and optimise processes. Manufacturers need actionable, real-time data that can be used to adapt to changes with minimal human intervention.

Customer expectations are higher than ever before; they want fast turnaround and high quality, but they still want a competitive price. This means higher production capacity, less operational downtime and lower lead times that lead to lower overall costs. Add to this the increasing shortage of both skilled and unskilled workers, and the need for the transformation and adaptation of the manufacturing industry is clear.

Are manufacturing organisations embracing industry 4.0?

Globally, manufacturing is embracing the digital transformation taking place within the industry. In the UK, 80% of manufacturers believe that smart factory technology will improve supply chain relationships. The artificial intelligence market is predicted to grow from $8bn in 2016 to $72bn in 2021, and 3D Printing spending is predicted to grow from $13bn to $36bn over the same time period. With extensive applications for these technologies within manufacturing, it would seem beyond acceptance of the Industry 4.0 movement, organisations are progressively beginning to take the plunge on investing in smart factory tech.

But the revolution of Industry 4.0 is far from over; it may be more accurate to describe it as evolution, and it’s not without its difficulties. The smart factory faces challenges of cybersecurity, adherence to technical standards and sufficient wireless network connectivity. As technology continues to advance, it’s likely the quest for the smart factory may, in fact, be always an ongoing journey.


It’s all about data

The smart factory is built on and powered by data. That means having the ability to collect and create data, store and manage this high volume of data (utilising cloud technology), and the means to analyse this data and implement changes where necessary. Higher integration of data from a variety of sources, such as machinery, robotics and smart sensors on the shop floor, can improve processes and efficiency. Not all the data need even be directed to a human to be useful, but can instead be shared between machines, automatically making adjustments to enhance productivity and match it to demand.

Are we bidding farewell to people?

Higher levels of automation, connectivity and integration brought about by Industry 4.0 doesn’t mean we’re looking at factories with no human presence. It may not even necessarily lead to a vast reduction in the number of people required. While it’s likely some roles may be replaced with robotics and AI, others will be enhanced through the use of new technologies and new roles will emerge. Industry 4.0 isn’t, in fact, a movement towards creating a factory devoid of human workers, but of finding ways of making the jobs and activities that humans carry out within the smart factory more high-value.

How can organisations begin the transformation to the smart factory?

The key thing to understand about Industry 4.0 is that it’s already happening, and organisations that wait too long to embrace the change risk quickly being left behind. The transformation is going to require a strategy, and it’s going to require investment. The journey of this transformation won’t be the same for all manufacturers; you need to understand where you can begin by identifying a specific opportunity that you can scale. It needs to start from where you are now, the way you currently use data, and how you can improve your connectivity and real-time data to optimise your existing processes.

Your people will play a vital role in the success of your transformation strategy. We’ve already said that the smart factory isn’t one without people, but introducing new technologies and process changes will affect their roles. It will also have a significant impact on the workforce you’ll need for the future; there’ll be a greater emphasis on digital technology skills and data analysts, so you’ll need to have a strategy for upskilling and recruiting.


The transition to smart factories may not be over, but as technology continues to advance at a rapid rate, this could just be the beginning of an evolution that will long continue. It’s bringing with it a dynamic and creative imagining of the future of the manufacturing sector, and endless possibilities. What we can say for certain about Industry 4.0 is manufacturers must embrace it, or risk becoming irrelevant.


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