Survivors are no longer the largest, strongest or even the most intelligent—they just know when to adapt. In light of the challenges, they also know that growth begins with control, not revenue. You wonder where they get such insight.
Each year around this time, scads of articles appear with predictions about the future and, more importantly, what’s next for manufacturing. This year, two topics seemed to outweigh everything else—at least for me—1) Next-shoring and 2) the Internet of Things (IoT). The sheer complexity of either one should challenge the best of survivors to maintain control. It was difficult enough to summarize.
First, who’s keeping score?
Many reliable sources are so inspired by these topics that they’re claiming we have begun the next industrial revolution, a.k.a., “Industry 4.0.” Like you, I’m still listening.
It seems to me, humans have always had difficulty naming revolutions while they’re living them. Some believe we’re [still] in the dawn of the computer age. They associate the third industrial revolution (Industry 3.0) with the impact of computers and digitization, which is giving way to additive manufacturing. Maybe it’s just getting fuzzier. At any rate, here’s the scorecard.
Four so-called revolutions and what they represent:
- 1.0 = steam engine and mechanization
- 2.0 = the moving assembly line and mass production
- 3.0 = computers and digitization
- 4.0 = IoT (the Internet of Things) and ACT (Advanced Collaborative Technologies)
Here are my summaries. See if you think we’re moving beyond computers … building a case for Industry 4.0:
Advance #1: The “Next” frontier
The idea is not new but the name “next-shoring” is—as of early 2014. Dubbed, the next manufacturing revolution, its middle name should be “adaptability”. The very premise of next-shoring is built upon operational agility—all in the name of speed-to-market.
Expectations for convenience and speed rise as fast as global demand expands. This fact challenges manufacturing’s reliable business model to remain close to suppliers and customers. But off-shoring [was] expensive; savings exaggerated. Many re-shored.
Next-shoring goes furthest to compress the distance between supply and demand in ways much more sophisticated than mere geographic reach. Buoyed by a more abundant technical workforce, next-shoring “rethinks” the entire ecosystem of a supply chain. It takes advantage of ACT (advanced collaborative technologies). Complex IT that can tap emerging markets for their innovation, talent, and customers from afar. In this way, manufacturers can overcome physical limitations to work closer to their customers without moving their main operations.
Because next-shoring is all about adaptability it’s the best insurance yet to stay competitive in what appears to be the next manufacturing frontier.
Advance #2: Merge right
The speed-to-market that next-shoring provides is half the equation. There are also increasing demands for more choice and more products in more places in varying lots that match customer specifications precisely. The complexity is daunting. The word “exponential” comes to mind.
The on-ramp is certainly connectivity. The Internet of Things (IoT) poses that communication between physical objects is now possible and it will change manufacturing as you know it.
“According to a recent McKinsey Global Institute report,
the Internet of Things (IoT) has the potential to unleash as much as
$6.2 trillion in new global economic value annually by 2025”
Markus Löffler, principal at McKinsey & Company weighs in: “Most companies think of physical flows—meaning the flow of material components through the supply chain—as separate from information flows”. Only later do they consider how and where to coordinate and synchronize those flows. IoT will enable machine-to-machine communication, inextricably linking products to “their” information. This will blur the line between material and information. Machines and workflows merge right to become a single entity.
Some other implications of the IoT include:
- New forms of collaboration will be necessary
- Higher degrees of standardization worldwide will be accepted
- Mechanical engineering becomes inseparable from IT
- Workflow is integrated into the hardware and,
- To adapt to these new conditions, “the fields of systems engineering, production IT, and business systems will need to fuse to a higher degree than ever before, creating new means of production in the process”.
The ground rule for Industry 4.0 is this: anything that can be connected, will be connected. If you want to be among the survivors, you will take every opportunity to connect your business … and remain in control.
HIT Solutions believes the more your business keeps up with important trends, the more you will improve your product, and improve your bottom line.
Leave me your comments below; share your thoughts.