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Getting Beyond Buzzwords: Industry 4.0

Periodically, a word comes into industry parlance and becomes the go-to term well before it is clearly defined and generally understood. Industry 4.0 is in danger of falling into that category, a term coined to point to the next generation of manufacturing.

“’Industry 4.0’ is the fourth major transformation of modern manufacturing, following the lean revolution of the 1970s, the outsourcing trend of the 1990s, and the automation that took place in the 2000s,” explained a recent report from the Aberdeen Group.

The industry hasn’t completely settled on the term, so that a variety of other terms are also used:  smart manufacturing, connected manufacturing, or industrial IoT, industrial manufacturing, smart factories and more.  

Whatever it’s called, Industry 4.0 is in early stages but has strong support. In fact, currently 35% of manufacturers plan to achieve digital transformation, Aberdeen research said.  Even more promising is that 91% of those surveyed said that IoT has the potential to benefit manufacturing. The benefits are myriad: reduced costs, improved quality, increased uptime and reliability of operational equipment, increased operational speed, and improved safety.

The adoption of Industry 4.0 will be driven by a variety of trends, according to PwC’s 2016 2016 Global Industry 4.0 Survey. These include:

  • Digitization and integration of vertical and horizontal value chains: Impacts processes across the supply chain, from product development and purchasing, through manufacturing, logistics and service.
  • Digitization of product and service offerings:  Organizations are both adding smart sensors or communication devices to existing data analytics tool and creating new digitized products.
  • Digital business models and customer access:  These disruptiveofferings may range from complete, data-driven services to integrated platform solutions.

The infographic below, from 2Flow, outlines the basics of Industry 4.0 and trces both the potential and the challenges of the market. 

— Hailey Lynne McKeefry, Editor in Chief, EBN Circle me on Google+ Follow me on Twitter Visit my LinkedIn page Friend me on Facebook

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