Industry 4.0 and Smart Manufacturing

Clay Kobernick, director of strategic supplier relations at Anixter, shares a definition of smart manufacturing and four of the keys to adopting Industry 4.0 practices to improve your organizations operating efficiences. For more information, read our TECHbrief on Industry 4.0.

Transcript: Industry 4.0 and Smart Manufacturing?

Hi, I’m Clay Kobernick.

The Internet of Things touches every facet of business today, and manufacturing is no exception. McKinsey estimates that by 2025, the total economic impact of the Internet of Things within factories will be up to 3.7 trillion dollars per year.

You’ve probably heard of Industry 4.0, Smart Manufacturing and the Industrial Internet of Things. These are all ways of describing the intersection of operational technology and information technology to monitor physical processes within manufacturing, and use data to make predictive, corrective and adaptive decisions to improve operational costs.

Industry 4.0 refers to the fourth Industrial Revolution and specifically the move toward smart manufacturing. The National Institute of Standards and Technology defines Smart Manufacturing as “fully-integrated, collaborative manufacturing systems that respond in real time to meet changing demands and conditions in the factory, in the supply network and in customer needs.”

Adopting Industry 4.0 requires both horizontal and vertical data integration across the business. Vertical digitalization may include manufacturing, procurement, supply chain, design, product life cycle management, logistics, operations and quality–all integrated for seamless flow of data. Horizontal digitalization may include data integration with suppliers, customers, and key partners. Achieving integration requires upgrading or replacing equipment, networks and processes until you have a seamless digital ecosystem.

Of course, it’s not enough for your systems to be fully integrated. You also need solid data services and analytics to turn the information being generated by your systems, sensors and machinery into actionable insights that can provide a return on investment.

With the adoption of connected systems, you also face increased cybersecurity risks. This is why adopting Industry 4.0 requires close collaboration with the IT experts in your organization, working with you to implement cybersecurity best practices across your digital ecosystem.

And one of the most important keys to adopting Industry 4.0 is the internal, cultural transformation in your organization—this requires strong leadership that is committed to change management and investing in the necessary technology and education to successfully adopt smart manufacturing practices.

All of this may seem like a huge investment, but the significant operational cost improvements often pay back the investment in just two years—and with Industry 4.0 practices in place, you can compete with anyone in acquiring and retaining customers, thanks to your enhanced organizational operating efficiencies.

I invite you to read our TECHbrief on this topic and talk to one of our technology experts about how Industry 4.0 could be implemented in your organization.