What if existing manufacturing and large technological innovations came together to create the next big manufacturing reinvention? Bingo. This is the fourth manufacturing revolution, and it’s happening right now.
The rise of new digital industrial technology, known as Industry 4.0, is a transformation that makes it possible to gather and analyze data across machines, enabling faster, more flexible, and more efficient processes to produce higher-quality goods at reduced costs. This manufacturing revolution will increase productivity, shift economics, foster industrial growth, and modify the profile of the workforce—ultimately changing the competitiveness of companies and regions.
Advanced digital technology is already used in manufacturing, but with Industry 4.0, it will transform production. It will lead to greater efficiencies and change traditional production relationships among suppliers, producers, and customers—as well as between human and machine. Nine technology trends form the building blocks of Industry 4.0.
In an Industry 4.0 context, the collection and comprehensive evaluation of data from many different sources—production equipment and systems as well as enterprise- and customer-management systems—will become standard to support real-time decision making.
These robots will cost less and have a greater range of capabilities than those used in manufacturing today.
Simulations will be used more extensively in plant operations to leverage real-time data and mirror the physical world in a virtual model, which can include machines, products, and humans. This will allow operators to test and optimize the machine settings for the next product in line in the virtual world before the physical changeover, thereby driving down machine setup times and increasing quality.
With Industry 4.0, companies, departments, functions, and capabilities will become much more cohesive, as cross-company, universal data-integration networks evolve and enable truly automated value chains.
This will allow field devices to communicate and interact both with one another and with more centralized controllers, as necessary. It will also decentralize analytics and decision making, enabling real-time responses.
With the increased connectivity and use of standard communications protocols that come with Industry 4.0, the need to protect critical industrial systems and manufacturing lines from cybersecurity threats increases dramatically. As a result, secure, reliable communications as well as sophisticated identity and access management of machines and users are essential.
More production-related undertakings will require increased data sharing across sites and company boundaries. At the same time, the performance of cloud technologies will improve, achieving reaction times of just several milliseconds. As a result, machine data and functionality will increasingly be deployed to the cloud, enabling more data-driven services for production systems.
Companies have just begun to adopt additive manufacturing, such as 3-D printing, which they use mostly to prototype and produce individual components. With Industry 4.0, these additive-manufacturing methods will be widely used to produce small batches of customized products that offer construction advantages, such as complex, lightweight designs.
Augmented-reality-based systems support a variety of services, such as selecting parts in a warehouse and sending repair instructions over mobile devices. These systems are currently in their infancy, but in the future, companies will make much broader use of augmented reality to provide workers with real-time information to improve decision making and work procedures.
Companies face formidable challenges in the adoption of these new technologies. To build and sustain a lead in the race to full implementation, they need to broaden and deepen their practical knowledge about digital technologies and the related use cases—and then develop and implement tailored digital manufacturing strategies.
BCG’s approach to Industry 4.0—along with the firm’s state-of-the-art model factories, or Innovation Centers for Operations—provides companies with the support they need to master the challenges of implementation.
New Balance's Edith Harmon explains how the company is becoming a leader in bringing advanced manufacturing technologies to the athletic footwear industry.Read the Q&A
Advances in technology are poised to revolutionize the provision of services. Service companies must make well-informed choices along a continuum of options to determine the right transformation path.Read the report