Industry 4.0: what it is and how it will change the world as we know it

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The way that business is done around the world is changing rapidly. This is because technology is advancing so quickly that it is making things possible that have never before.

For example, smart factories, the internet of things, robots, location detection technologies, advanced human-machine interfaces, 3D printing, augmented reality, big data, and 3D technology are reshaping the way that companies produce products and the way that customers search for, engage with, and shop for products.

All of these changes are resulting in the creation of “Industry 4.0.”

Industry 4.0 is a brand-new wave that will redefine the way business is done in the coming decades. However, in order to properly understand how Industry 4.0 is changing business, one needs to understand the first three industrial revolutions.

Industries 1.0 – 3.0

Industry 4.0 1

The first industrial revolution (Industry 1.0) took place between the years 1760 and 1840. This period was marked by a switch from hand production to manufacture through the use of machines powered mostly by steam and water. Many different industries were affected by this change including the textile industry, the iron industry, the farming industry, the mining industry, and many others.

Industry 2.0 refers to the period between the years 1870 to 1914. Industry 2.0 is commonly referred to as the technological revolution. During this period, advances in technology made it possible for communication and transportation to be dramatically improved.

Large railroad networks were constructed during this time and communication sped up tremendously thanks to the advent of the telegram. Electricity also entered the fray during this period, which led to the electrification of factories and the modern production lines.

The third revolution occurred in the second half of the 20th century. This revolution is known as the digital revolution. During this period, computers rose to become incredibly influential in nearly every industry and aspect of society. Communication also improved greatly thanks to tools such as email and the internet. Industry 3.0 moved humanity forward dramatically and made the world significantly more interconnected.

Understanding Industry 4.0: components, drivers, applications and goals

The fourth industrial revolution will be marked by the digitization of manufacturing and the computerization of industry.

Below are listed important components that will revolutionise the industry. For example, smart and autonomous systems backed by big data and machine learning will make manufacturing and shipping more seamless and efficient than ever.

The primary application of Industry 4.0 will be for smart factories. However, Industry 4.0 can also lead to smart ports with automated cranes capable of loading cargo onto ships without human involvement. The transportation industry will also be heavily impacted as automobiles, trains, and planes become increasingly automated, reducing dependence on drivers, pilots, and conductors. Smart cities could even be just around the corner.

  • Big Data Analytics – Big data analytics are analytics that will be able to analyze and collect useful insights from vast quantities of data. Big data analytics are improving all the time and will be more heavily used in Industry 4.0.
  • 3D technology- 3D technology is an emerging sector that is being embraced by business nowadays, to improve the shopping experience as well as to simplify the working process, applications of 3d technologies include 3D modeling, 3D printing, 3D visualization, 3D display and so on.
  • Smart factory- Factories that rely on advanced technologies like robotics, big data processing, cloud computing, strong cybersecurity and smart sensors to be highly efficient, secure and cost-effective.
  • Internet of Things (IoT) platforms- The Internet of Things refers to all devices that can collect data, transmit it over the internet, and communicate with other devices. Smart refrigerators, lamps, and toasters are all examples of IOT devices.
  • Location detection technologies These technologies detect your location and are commonly found on mobile devices. You can share your location with trusted people using location detection technologies.
  • Advanced Algorithms: Advanced algorithms are highly complicated mathematical formulas that provide instructions for computer systems to follow in order to make sure that various tasks are completed.
  • Augmented reality/ wearables- This refers to wearable technology, such as Google Glass that augment reality with visual data.
  • Smart Sensors – Smart sensors are sensors that are capable of capturing information, processing it, and giving a digital signal when the time is right.
  • Data Visualization – Data visualization is when data is expressed in visual forms such as infographics, charts, maps, and more. In the future, larger quantities of data will be able to be visualized and it will be able to be expressed in more forms.
  • Authentication and Fraud Detection – This technology involves the use of big data and pattern recognition in order for parties to tell when fraud is occurring. Banks and financial institutions will use this technology more heavily in the future.
  • Blockchain Technology – Blockchain technology is a technology that originated from Bitcoin, the famous digital currency. This technology involves information being stored on universal public ledgers in the form of “blocks” that are connected to each other on a “chain” and being validated by “miners.”
  • Multi-level Customer Interaction and Customer Profiling – This technology involves organizing customers into groups based on certain identifiers. These identifiers can include hobbies, age, location, interests, etc.
  • Cloud Computing – Cloud computing is computing that does not rely on local servers, desktops or laptops for data storage. Instead, cloud computing relies on “the cloud,” which is shared storage that is located in a remote area.
  • Advanced Human-Machine Interfaces – Advanced human-machine interfaces are interfaces on machines that provide visual data about the functions the machine is carrying out so that operators can understand how the machine is performing in real-time.
  • Mobile Devices – Mobile devices include smartphones, tablets, laptops, e-readers, smart watches, handheld gaming consoles, and any other devices that people carry around to access the internet with. These devices will be a key component of industry 4.0 and they will be ubiquitous.

Businesses from around the world are trying to integrate these technologies in order to create smart factories and to automate as many levels of manufacturing, packaging and shipping as possible. Amazon is one of the businesses that is leading this transition to digitized manufacturing. The company is now expecting to have fully automated warehouses in the next ten-fifteen years.

As Industry 4.0 picks up speed, many companies will follow Amazon and integrate robots and smart devices in many different areas of their manufacturing processes.

Drivers of Industry 4.0 include the digitization and integration of vertical and horizontal value chains, of product and service offerings and of business models and customer access. Ultimately, Industry 4.0 will be fueled by the desire of companies to digitize as many components of their business as possible using breakthrough technologies such as AI, machine learning, and big data.

The goal of Industry 4.0 is for companies to be able to reduce dependence on human workers, increase profit margins, dramatically boost production, automate as many facets of their businesses as possible, be able to easily adapt to changing customer preferences, and to have machines adapt and learn on their own over time.

A key achievement: The shift from mass production to mass customization

Mass production and its tendency to fail in this new era

In the past, mass production was the dominant business model for large businesses with hundreds of millions in revenue. These businesses would create as many products as possible and then try to sell all of them. The advent of the assembly line, which was made famous by Ford Motor Company in 1913, helped to popularize this model.

Industry 4.0 2

Mass production was a prominent feature of Industries 2.0 and 3.0. However, despite the fact that the assembly line and other similar breakthroughs helped to move society forward, there are a number of key problems with this business practice.

The first is that it is not optimized for customization. Henry Ford himself once said that Model T customers “can have any color - so long as it’s black.” The second problem is that in can result in businesses producing too much inventory and suffering losses due to an inability to sell it all. Finally, the mass production model does not allow companies to take advantage of new technologies that optimize efficiency.

Mass customization as an optimized solution to obtain both quantity and flexibity

A simplified 3D visualization demonstration provided by luxury brand Lolo Chatenay and tech startup Hapticmedia.

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Mass customization is a technique that makes manufacturing processes flexible enough to produce products according to precisely what the customer wants while keeping costs at a low level.

This concept makes the most of both personalization and mass production, which leads to a cost-efficient manufacturing system. Mass customization is proving itself to be one of the defining features of Industry 4.0.

With mass customization, customers can choose specific colors, sizes, features, versions, etc. This allows for optimal customer satisfaction and reduces the chances of returns. Through mass customization, companies also have the option to only produce products according to demands. This means that they do not have to risk capital producing inventory that may or may not sell. Further, mass customization allows companies to take advantage of the latest developments in business technology.

Guerlain 3D perfume configuration and customization tool allowing users to create their signature item, choosing sizes, colors, accessories, engraving their initials and so on. Solution created by Hapticmedia.

And this shift from mass production to mass customization is made possible by the following two features of Industry 4.0: the Smart Factory and the 3D technology.

The Smart Factory as a key feature: secure, connected and flexible manufacturing

Industry 4.0 3

Smart factories are a key component of Industry 4.0. They are designed to be highly efficient, secure and cost-effective, with the help of advanced robotics, big data processing, cloud computing, strong cybersecurity, smart sensors and other advanced features.

With this approach, companies can optimize their production for mass customization, while making the workplace safer and less reliant on actual human labor and saving costs.

In smart factories, robots do much of the actual work that is required to produce products. Many of the machines that operate in smart factories run on artificial intelligence and carry out high-level activities. In some situations, they can even make decisions and learn from experience.

Additionally, since smart factories typically are equipped with various sensors, machines can actually inform operators when they are likely to break down or they are experiencing any kind of problems.

Knowing this information ahead of time allows mechanics, engineers, and operators to repair and/or replace problematic machines before they cause substantial issues. It is estimated that smart sensors can help businesses to reduce downtime and save up to 40% on maintenance costs.

Because smart factories offer so many benefits to companies, they are becoming more and more popular. Many businesses are making the switch to smart factories.

In fact, it is estimated that smart factories will deliver over $500 billion in value by the year 2022. The move towards smart factories is so strong that roughly 76% of manufacturers either have a smart factory initiative that is ongoing, or are working on defining one. It is also estimated that smart factories will increase overall manufacturing productivity by a factor of 7 by 2022.

3D Technology as the 2nd key feature: fast, unique and customized at low costs

Every now and then, a technological breakthrough that dramatically changes business occurs. 3D technologies such as 3D printing, 3D visualization and 3D configuration are currently creating waves in the ecommerce industry.

Kenzo is using 3D visualization and configuration technology to better present the product and offer online customization to clients. Solution created by Hapticmedia.

3D configuration technology serves as an interactive tool powered by live 3D models to allow customers to personalize products as they want, enabling users to watch their adjustments and receive estimates of the costs based on the customizations, which in the end leads to a more engaging client relationship.

3D configuration helps businesses to overcome the limitations of 2D ecommerce product displays in order to create a better user experience for customers.

3D configuration technology is so effective that companies who use it achieve 40 % higher conversion rates and average a 30 % sales increase when they replace 2D product displays with 3D ones. Essentially, integrating 3D configuration technology can result in a massive sales and profit increase for ecommerce businesses that sell products online.

The Impacts: high levels of automation, customization and productivity due to new technologies

Just like all of the industrial revolutions before it, industry 4.0 is going to dramatically increase the ability of mankind to create products, ship them around the world, and improve the customer experience. However, unlike other industrial revolutions, Industry 4.0 is going to allow for high levels of automation, customization and productivity and efficiency that have never been seen before.

Additionally, thanks to the extensive amount of innovation that is currently happening in the world, the fields of biotechnology, energy storage, quantum computing, 3D technology, autonomous vehicles, nanotechnology, materials science and more should be advanced in dramatic and positive ways.

In the coming years, many human beings will drive autonomous vehicles, synthetic biology will revolutionize medicine, space travel and exploration will be improved and expanded, 3D printing will change the way products are delivered and created, and many more positive developments will occur.

However, even though Industry 4.0 will most likely bring about a plethora of positive changes to humanity. There will also be a number of important challenges that this era will result in as well.

In conclusion: Industry 4.0 arrives with both challenges and new opportunities

Perhaps the greatest challenge that will arise from Industry 4.0 is the disruption of labor markets through automation and improved robotics and AI. Because computers and machines will be able to do more and perform increasingly complicated tasks, it is going to threaten millions of jobs. In fact, one A.I. expert estimates that A.I. could replace up to 40 percent of existing jobs within the next 15 years.

So, many people will lose their jobs in the next few decades. But, this is normal for industrial revolutions. For example, the invention of the tractor cost millions of farm workers their jobs in the past. However, each new industrial revolution also creates countless jobs as well. There will be new jobs available in blockchain, cybersecurity, big data, 3D printing, biotechnology, nanotechnology, aerospace, and many more industries. So, Industry 4.0 will create opportunities even though it will take them away too.

It is up to every individual and every business to adapt to Industry 4.0 just as previous generations have had to adapt to industries 1.0, 2.0, and 3.0. Those who are able to adapt well can capitalize on all of the exciting new technologies. Ultimately, Industry 4.0 has the potential to radically improve life on earth for billions of people. Everything from factory safety to increase online shopping experiences are set to be improved substantially.

Through mass customization, smart factories, and 3D configuration technology, companies are able to increase their profit margins and create better customer experiences, which is beneficial for customers as well.

Contact Hapticmedia to get a technological boost to your sales

Here Hapticmedia is a leader in 3D configuration industry and mass customization with over 10 years of experiences, combined with Augmented Reality technology we are able to offer a upgraded and engaging online shopping experience for your consumers, like what we did with Guerlain and Kenzo, enabling clients to config and personalize products on your e-commerce website.

Contact us and ask for an estimate of your tailor made 3D product configurator and see with your own eyes the true results it brings.

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