What to Make of Industry 4.0

  • 1 November 2017
  • mainpath
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Categories: ERP

IoT concept

The Industrial Revolution, wherein man harnessed mechanical power and new agricultural techniques to achieve great modes of production, forever changed global economics. In the centuries since, the world has experienced two further technological revolutions: the second saw mass production and assembly lines alongside the commodification of electricity, and the third centered on the shrinking of the computer chip to enhance automation.

In the early decades of the 21st century, the fourth revolution has dawned: cyber-connected physical systems. Hallmarks of the fourth Industrial Revolution include Big Data, the proliferation of mobile devices, 3D printing, and most notably, the Internet of Things (IoT), which encompasses essentially any device that is internet-capable.

So, What Is This Revolution?

How to define the systems and places that embody Industry 4.0 will be continually refined over the next few years, but in a general sense, they share the same four traits of interoperability, information transparency, technical assistance, and decentralized decision-making.

Revolutions don’t come without costs; the previous industrial revolutions displaced some labor and created conflict and inequality elsewhere. Industry 4.0 is no different—fewer jobs will be needed at the same time innovation, access, and opportunities grow. The exponential growth of information is staggering to comprehend; one prediction suggests humanity will create 24.4 times more information in the year 2020 as compared to the year 2011.

Further challenges include integrating proprietary production, maintaining integrity of production without constant (human) oversight, and high levels of stability to maintain a useful level of cyber-physical communication. The benefits of Industry 4.0 though, for both organizations and the labor that defines their output, are too numerous to ignore.

ERP Takes the Stage

As one might expect, Enterprise Resource Planning (ERP) systems will become the lifeblood of Industry 4.0. By connecting IoT devices with production facilities and logistics departments, machines will operate harmoniously alongside human design with efficiency and responsiveness that would have seemed like a pipe dream as recently as the 1990s.

Custom-Built Visibility

ERP will vastly change the way manufacturing emerges from its automated-but-not-optimized structure—59 percent of manufacturers agree that Industry 4.0 will affect the sector. Vendors are no longer relying on prefab interfaces, preferring instead highly connected ERP-based systems specific to the production line required.

As “smart factories” become the norm, organizations will demand complete transparency and visibility of the entire supply chain. ERP systems will vastly improve reporting to the degree that manufacturers will have a clear picture for the entirety of the product life cycle, including raw materials all the way through end-purchased goods.

Smart Fixes

Manufacturing companies are reaching ambitious goals via efficient control loops between their ERP systems and implementation layers. Part of their successes can be attributed to the use of key performance indicators (KPIs) that show standardized information and results of production. Whereas many companies use KPIs as reporting, Industry 4.0 shows machines using KPI knowledge to intervene production processes when deviations from expectations are seen, correcting faults immediately and at times preventing further deviations. These on-the-fly corrections save money by reducing downtime and human energy by not requiring as much analysis.

Key Questions to Ask

All organizations, not just manufacturers, should consider whether their existing ERP system is adaptable enough to accommodate future deployments throughout the continuum of Industry 4.0.

Does it enable real-time processing and central master data management? Is it modular, regardless of whether the ERP system is cloud-based or hosted in a data center? Is it adequately designed for collaboration, with a user-friendly interface and responsive design? These are among the pressing questions that can determine the function and utility of an existing ERP system or whether the time has come to upgrade to a highly flexible, low-hierarchy, and efficient production system.

How prepared is your organization for Industry 4.0? Tell us your thoughts and concerns in the comments section.

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