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The New Internet Factory & Electronics’ Leading Role

A combination of competitive price pressures and a need to produce ever-new products and features for an insatiable consumer market has created a culture of electronic devices that are continuously changing, and an accompanying manufacturing strategy that is constructed around planned obsolescence that replaces instead of repairs older products. One reason that planned obsolescence and continuous inflows of next generation products occurs is that it takes companies more time to service and repair consumer electronics than it takes to simply replace them. Consumers, too, have been led to expect new versions of electronic appliances at breakneck rates.

Meeting this continuous demand for new products grows more complicated when you consider that most electronics companies have long and complex supply chains that touch nearly every continent on earth. These supply chains must be tightly orchestrated if products are to come together and make it to market. For electronics producers, the ability to automate manufacturing operations across continents, complete with automatic triggers and alerts that can enact immediate responses to production problems, is paramount. This auto-detection and operational intercession by electronic sensors and embedded systems is one of the hallmarks of the “new Internet factory.”

Just what does this new Internet factory consist of?

The concept got a formal start in October, 2012, when Germany's Industry 4.0 working group presented a series of recommendations for smart manufacturing to the German government. Dubbed the “fourth industrial revolution,” Industry 4.0 blends embedded systems and the Internet of Things into an intelligent and automated network that can run an intercontinental manufacturing operation.

The smart manufacturing that Industry 4.0 envisions is characterized by factory automation, widespread use of electronic sensors and embedded systems throughout the production process, and automated monitoring and decision-making—with an end goal of optimizing production and logistics through electronics and automation.

A smart manufacturing environment like this could:

  • Reduce incidence of human error by automating operations, and also contribute to a cleaner manufacturing environment by eliminating manual work;
  • Enable the factories of suppliers and sub-contractors around the world to interface with each other in manufacturing, potentially shifting production to other global locations if a primary production plant develops a problem;
  • Integrate with the supply chain in order to calibrate production activities with fluctuations in supply and demand;
  • Produce analytics reports and alerts about specific component failures for the engineering staff;
  • Track activities in after sales warranty and service support to improve the visibility of products throughout their entire life cycles.

How important could this be to electronics manufacturers? LNS Research analyst Mike Roberts cites the complexity of today's global supply chains, where “More and more, companies have to juggle internal and external resources while staying within international standards. Issues such as traceability and compliance are increasing operational burdens. It is not unusual for components and sub-components to embark on a journey that touches three or more continents before reaching the end-consumer.”

It is within this context that Germany is pushing its Industry 4.0 initiative, which it believes will further an “Industrial production of the future [that] will be characterized by the strong individualization of products under the conditions of highly flexible (large series) production, the extensive integration of customers and business partners in business and value-added processes, and the linking of production and high-quality services leading to so-called hybrid products.”

In the U.S., President Obama's 2014 commitment to create up to 145 manufacturing innovation institutes is taking root in projects like the Department of Defense's competition for a new public-private innovation institute in flexible hybrid electronics, which combines $75 million of federal investment with $75 million or more of private investment. The project includes manufacture of products like wireless medical monitors, stretchable electronics for robotics and vehicles, smart bridges capable of alerting engineers at the first signs of trouble—and military applications like intelligent bandages and smart clothing that alert soldiers to first signs of injury or exhaustion.

As government sponsorship of smart manufacturing grows throughout the world and the private sector joins in, the electronics industry is likely to find itself at center stage. The “center stage” billing” for electronics makes sense, as few industries are better positioned to take advantage of smart manufacturing's untapped potential.

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