Industry 4.0: Nine Key Points Electronics Manufacturers Must Not Ignore

Estimated reading time: 3 minutes

The Fourth Industrial Revolution is nothing if not massive and complicated. There is a huge amount of information out there, some useful and some perhaps less so. But, among the hype, waffle and thinly-disguised sales pitches, there are a few consistent themes that really must not be ignored by manufacturers wishing to remain competitive in the future.

The convergence of new technologies and innovative thinking is already transforming the way electronics manufacturers work, and this is set to continue.

Here are nine key concepts that ought to be considered as part of any strategy for the future:

1. Digital Darwinism

"It is not necessary to change. Survival is not mandatory" - W. Edwards Deming

Industry 4.0, and all that entails, is happening. This might not be clearly apparent as the process is far more advanced in some countries and industries than others, but many companies are already enjoying the competitive advantages of adopting new technologies and working practices. Never the less, there will be those who choose to ignore the digital revolution, and they may well be OK for a few years as the world changes around them. In the end, though, it will only be the fittest, most competitive that survive.

2. Facts-based business

Machines and processes are increasingly able to generate data that can be analyzed through digital business intelligence (BI) systems. These provide concrete facts on which to base decisions, rather than assumption, guesswork or gut feel. This leads to more efficient resolution of issues and improvement of processes, creating a more competitive environment.

3. Real time

With the increase in available information comes the need to interpret and act on it in real time. This might come from customers needing to know the status of their order or delivery, or from the manufacturing plant wanting to identify and fix process issues quickly, as they occur, reducing waste and increasing efficiency.

4. Digital infrastructures, physical manufacturing

We do and will still need machines and people to physically make products. Pretty much everything else, though, can be digital. IT systems have never been so important, and need to be structured in such a way to easily interface with the physical world.

5. Factory models

Manufacturing process models are changing. Requirements, such as late customization (i.e. configure to order just before shipping) and distributed manufacturing (making things on sites close to their end markets to reduce transport costs and lead times), are and will continue to dramatically change the way factories are set up and run. Automation and advanced IT systems are required to support this.

6. The circular economy

As the world runs short on resources – and yes it really is – then products will be increasingly designed for easy upgrade, recycling, servicing and repairs. Many will move to a "pay-per-use" supply rather than outright purchase. Again, this greatly affects the services that manufacturers will need to offer: spares, upgrade kits/services and so on will become as important as the production of the original equipment. The arguments for design-focused companies to move away from OEM to sub-contract manufacturing will become even stronger as the production and fulfillment operations become even more complex.

7. Digital collaboration

The flow of information between customer, manufacturer and materials suppliers is becoming increasingly digitized and shared. This provides many opportunities for much improved efficiency and flexibility. Data security does, however, become a primary concern.

8. Raw material takes control

Rather than a production system being programmed to perform actions on raw material, the material itself will tell the production system what to do with it. Why? Again, it's about flexibility and customization. This technology may be a little way off for many manufacturers, but it's a good example of how manufacturing sites might need to completely re-think their production operations.

9. Servitised business models

Manufacturers will have to recognize (though the good ones will have already) that they are a service organization that provides manufacturing as a part of the service offering. The opportunities for pure "manufacturers" will be very limited, as customers look for additional added value in the provision of other services, some of which are described above.

Of course, a lot of these ideas overlap, combine and complement each other. Many of the traditional boundaries around certain aspects of manufacturing are blurring and merging, and forming a coherent strategy to deal with all this is undoubtedly a challenge. Exciting times indeed for those willing to embrace it, but perhaps the beginning of the end for those who won't?

The article originally appeared on the JJS Manufacturing blog, which can be found here.