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April 05, 2017

Taking Manufacturing into the Future

By Special Guest
Jack Thomas, Content Writer

Manufacturing began with the ground-breaking implementation of steam-powered machinery. Soon enough, electricity replaced steam power and the assembly belt revolutionized mass production. The third era began as computers became more advanced, thus leading to the replacement of workers with machines on the assembly line. According to a report released by consulting firm McKinsey and Company, the next ten years should see the rise of digitalization as the fourth era of industrial revolution begins. What is the fourth industrial revolution, also known as Industry 4.0? How will it affect the manufacturing sector?

What is Industry 4.0?

The term “Industry 4.0” serves as a buzz term for the merger of industry and the Internet of Things. Industry 4.0 technically isn’t new technology, but rather is a new approach to optimizing production within the industrial sector. It is the move towards digitization of operations that combines the use of machinery, computers, and automation. McKinsey’s report suggests that the fourth Industrial Revolution (News - Alert) will have a huge impact and will require only a minimal replacement of equipment. The author argues that less than 40 to 50 percent of existing equipment will require replacement. The industry’s focus will shift to integrating technologies and upgrading current software to create a “cyber-physical network” within the factory to monitor and capture data regarding the production process. The way in which the manufacturing industry evolves will rely on the use of sensors, data analytics, 3D printers, and Google (News - Alert) glass to create a network. This intelligence network will be able to make core decisions based on the analysis of data. Ultimately, this combination of analysis and physical equipment becomes the Internet of Things.

The Smart Factory

At the heart of the fourth Industrial Revolution is the “smart factory,” which will consist of sensors, devices, machinery, and people that communicate with each other through the “cyber-physical network.” These interworking parts must constantly talk to each other for the system to run efficiently.

With the Industry 4.0 approach, company factories will be able to produce their products in greater quantities while also maintaining higher quality standards. Digitalization will allow for more consistent and reliable outputs, leading to increased profits. In high-risk working environments, the implementation of Industry 4.0 technologies should improve the health and safety of workers.

It is not only the industry giants that will benefit from Industry 4.0 and the “smart factory.” Start-ups, and small and medium companies, should find value in the implementation of new technologies within their organizations. While the factory floor is seeing the increasing use of sensors, robotics, and other developing technologies, ERP manufacturing software is already helping behind the scenes by integrating various departments, improving communication, and streamlining processes.


With the act of digitizing the industrial sector comes an increasing need for cybersecurity. According to the same McKinsey report, “Digitization requires an effective implementation of cyber-security measures across the whole enterprise: prioritize protection, integrate into processes, engage management and employees, and safeguard technology.” Security becomes of paramount importance, and a lack of tight cybersecurity could have dire consequences, including the failure of the entire system. This will create an increasing need for employees with a skillet that involves data and analytics.

The evolution of Industry 4.0 technologies and the “smart factory” will not happen overnight. However, companies are already moving toward digitalization. In 2013, Germany Trade & Invest (GTAI) released its plans to fully automate the production process of the manufacturing industry with minimal human involvement. We can also see the transition to Industry 4.0 as companies begin to implement individual technologies such as 3D printers into the production process. It’s an exciting time for manufacturers, providing they’re able to adapt to new technological processes as they arise.

Edited by Alicia Young

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