Commentary on Industry 4.0 that only focuses on the Internet of Things (IoT) entirely misses the point. Armed with IoT devices, manufacturers could improve productivity and time-to-market. However, only large and resourceful manufacturers can take advantage of these devices in their existing state. Smaller scale manufacturers who badly need these gains presently do not have the resources or ability to do so.
IoT and CNC machines
If you don't know what the Internet of Things and Industry 4.0 are, here is an article to get you started: "Industry 4.0 is the integration of the Internet of Things (IoT) and relevant physical technologies, including additive manufacturing, robotics, high-performance computing, artificial intelligence and cognitive technologies, advanced materials, and augmented reality, that complete the physical-to-digital-to-physical cycle."
I recently spent the day with my co-founder at a major international exhibition of automated, Computer Numerically Controlled (CNC) equipment. There was certainly a lot of noise about industrial IoT; the majority of the exhibiting companies were garishly vaunting their Industry 4.0 credentials.
On closer inspection, however, it became clear that almost all the machinery manufacturers' efforts were restricted to providing IoT functionality on their machines, which could then be connected to a cloud application with an open API. It is then left to the machine-owners to figure out how to use this data.
This is understandable. Machine manufacturers are in the business of making and selling more machines, not in solving all the downstream real-world problems, such as material and capacity wastage. However, given that more than 80% of CNC machinery is owned by small and medium-sized businesses, it is highly unlikely that there will be enough resources deployed to make full use of this additional IoT functionality.
Why can't small and medium-sized businesses solve their problems with IoT?
Whether they suffer from too much or too little capacity, weak internal processes, poor maintenance, high employee turnover, and/or their cash flows are choked by debt-servicing costs and delayed customer payments, small and medium-sized manufacturers have enough existing problems to solve before they can really focus on optimizing their productivity using IoT generated data.
Even if they can overcome these problems internally, they need their suppliers and customers to break out of their respective silos simultaneously for any change to become permanently effective. What's the point in optimizing a CAD/CAM process if the customer is still releasing poorly engineered drawings on the back of an envelope at the last-minute, or if vendors insist on supplying large batches of standardized raw material, resulting in high scrap-generation?
In the steel industry, for example, the high-level consequences of these problems are as follows:
- Up to 30% of the world's steel production is wasted during processing
- Up to 50% of steel processing infrastructure is lying unused
- Employee turnover of up to 20%
- Poor or non-existent quality and on-time-delivery
How can Industry 4.0 help?
Industry 4.0 is about solving real-world problems. IoT is the means, not the end. The opportunity exists for centralized, technology-driven solutions that use IoT to connect and manage all the entities in a given supply chain. This would spread the cost of implementing IoT-driven change across an ecosystem of similar machines and processes.
By providing a framework that proves there is a financial incentive for doing things the right way, manufacturers can boost efficiency, paradoxically leading to higher profits and greater customer satisfaction.
Why does this matter?
Ultimately, an end-to-end, IoT enabled manufacturing solution will not only reduce the cost and complexity of managing an outsourced supply chain for long-suffering customers, but also lead to a whole host of environmental and social benefits:
- Lower overall costs
- Less material waste
- Localised manufacturing
- Happier working lives
This is when we shall see the true power and impact of IoT and Industry 4.0.
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