Industrial manufacturing is undergoing a paradigm shift from centralized to decentralized manufacturing, incorporating new roles for assembly lines and becoming more data-driven. Because many devices are adding sensors and technology to become more connected, industrial machines can now communicate more easily with other machines and humans in real time, allowing production processes to become more controllable. This is the start of the new industrial revolution — Industry 4.0.

Industry 4.0, the Internet of Things (IoT) and the Industrial Internet of Things (IIoT) are all related concepts describing the intelligent connectivity of smart devices allowing them to sense and communicate with each other. By embracing these concepts, industrial manufacturers and their customers can share information from initial design concepts to manufacturing through to installation and implementation. For example, having the ability to monitor the status of products on the assembly line in real time can improve labor utilization, customer satisfaction and throughput. Products, systems and services will be increasingly customized to customer needs, with feedback from products throughout their life cycles.

According to research firm IDC, by 2020 the Internet of Things market will reach $1.7tr with the number of connected devices reaching 29.5 billion. An IoT ecosystem of technology and services will reach new heights, moving beyond just real-time equipment monitoring to leverage collected data for more advanced analytics that can optimize performance and productivity. Strategic decisions will be based on knowledge, not just guesswork. Better decision-making is the main benefit of creating a connected factory in which machines and people are smarter.

Sensors will be incorporated into everything from household appliances to shop floor equipment providing details on equipment condition and warnings about impending failures or required downtime. Pallets and other storage solutions will embed sensors for improved tracking of products through the supply chain or more streamlined inventory. Data gathered from sensors can be analyzed to predict seasonal trends, spikes or reductions in customer demand to ensure the right levels of inventory are available at the right locations.

Industrial manufacturers that implement Industry 4.0 will be able to deliver more customized products to their customers quicker and for less cost. In addition, a new workforce will be required to not only design and use next-generation equipment, but also to analyze the output.

The Outlook

As fast-paced as manufacturing technology is evolving, industrial manufacturing executives should continue making investments in emerging technologies to continually transform their business beyond 2020. Holding back investments in technology because of fluctuating markets and economic uncertainty can open a door for unexpected competitors, placing businesses in jeopardy. By embracing Industry 4.0 now, manufacturers can improve productivity and profitability both now and for years to come.