INDUSTRY 4.0

March 1, 2016


Industry 4.0” is the brainchild of the German government, and describes the next phase in manufacturing — a so-called fourth industrial revolution. The four phases consist of the following:

  • Industry  1: Water/steam power.
  • Industry  2: Electric power.
  • Industry  3: Computing power.
  • Cyber        4:  Connecting physical systems.

We are in the third “revolutionary” period right now but transitioning to the fourth revolutionary period.  This will be the industrial internet of things or IIoT. Connected automation and analysis enable smart factories to function more efficiently, with significant reductions in scrap and off-quality products and with considerably less cost and overhead than is being experienced at the present time.

A smart factory using IIoT can accomplish the following:

  • Produce up to twenty-five (25) variations in one product allowing for complete satisfaction of the consumer population.
  • Ten percent (10%) increase in productivity
  • Thirty percent (30%) decrease in inventory
  • A significant return on company investment (ROI)
  • The ability to make production change-overs quickly and with fewer on-line mistakes

The graphic below will indicate the four phases of production and show the upcoming Industry 4.0 systems.  The three boxes in the fourth phase represent computer inputs wirelessly transmitting and receiving data from two robotic systems.

FOUR STAGES OF INDUSTRY

Industry 4.0 is the rapid transformation of industry, where the virtual world of information technology, IT, the physical world of machines, and the Internet become one physical entity. It centers on the integration of all areas of industry enabled by IT.  Technologies improve flexibility and speed, enabling more individualized products, efficient and scalable production, and a high variance in production control.  Machine-to-machine (M2M) communications and the improved machine intelligence lead to more automated processes, self-monitoring, and results in real time control.

Characteristic for industrial production in an Industry 4.0 environment are the strong customization of products under the conditions of highly flexibilized (mass-) production. The required automation technology is improved by the introduction of methods of self-optimization, self-configuration, Self-diagnosis, cognition and intelligent support of workers in their increasingly complex work.  The largest project in Industry 4.0 at the present time (July 2013) is the BMBF leading-edge cluster “Intelligent Technical Systems OstWestfalenLippe (it’s OWL)”. Another major project is the BMBF project RES-COM, as well as the Cluster of Excellence “Integrative Production Technology for High-Wage Countries”.   In 2015, the European Commission started the international Horizon 2020 research project CREMA   (Providing Cloud-based Rapid Elastic Manufacturing based on the XaaS and Cloud model) as a major initiative to foster the Industry 4.0 topic.

IIoT devices should work to bring about Industry 4.0 manufacturing in five ways as follows:

  • Decentralized Intelligence—Where as much intelligence and control capability as possible is placed in the machine, or individual drive axis, rather than handling all activity from one central processing unit or CPU.  Holding process data at the machine level, and deciding what to do with it, reflects the belief that a machine can be equipped to do something with the data and improve the processes on its own. NOTE:  This is completely independent from the “cloud”.
  • Rapid Connectivity—Systems that facilitate instant vertical or horizontal connectivity to allow data to flow freely across the enterprise structure need continual investment and improvement.
  • Open Standards and Systems—Open standards allow for more flexible integration of software-based solutions—with the possibility to migrate new technologies into existing automation structures.
  • Real-time Context Integration—In Industry 4.0 factories, it will be possible to draw on real-time machine and plant performance data to change how automation systems and production systems are managed.
  • Autonomous Behavior—Real-world initiatives can make production more connected and demand-driven.  Technology helps the production line to become autonomous.  The goal is to have workstations and modules that can adapt to individual customer or product needs.

One HUGE concern:  Industry 4.0 must have engineers, production specialists and technicians to bring this to pass in the fourth generation of the Industrial Revolution.  Over the next decade, America faces one of its most critical tipping points. The U.S. Bureau of Labor Statistics indicates that by 2012, there was be a shortfall of nearly three (3) million skilled workers in America.  By 2020, that number will be ten (10) million in manufacturing-related industries alone, with millions more in nearly every sector of the American economy. The average age of American skilled workers is 55 years old. These essential workers will retire soon, and there’s not enough young people coming through the skilled training pipeline to fill the gap. This gap is already costing billions from the American gross domestic product. The multiple implications for the wholesale insurance industry due to the “skilled shortage” will be profound. Expanded liability issues and new potential claims in a worker-shortage environment may arise against the backdrop of strained capital reserves and a soft premiums marketplace.  WHAT DOES THE “SKILLED WORKER SHORTAGE” MEAN?   The skilled worker shortage has practical and potentially devastating consequences for our economy. At the height of the recession, thirty-two percent (32 %) of U.S. manufacturers reported that they had jobs going unfilled because they could not find workers who have the right skills. This shortage has far-reaching consequences. For example, our country’s infrastructure requires major upgrades and repairs. Municipal water and sewer systems are failing, with leakage reaching as high as 20 percent. Many bridges and overpasses are unsafe, leading to potential injuries and deaths as well as long-term traffic and business delays. The shortfall of 500,000 nationwide welders is causing huge delays or cancellations for repair projects that are already funded. Heavy construction equipment, such as cranes, must be built in America to meet the demand. Finding the skilled workers to build cranes is a major hurdle. Once built, a crane requires skilled operators, as well as skilled repair and maintenance workers to keep the cranes operating. This scenario is typical of virtually every industrial enterprise in the nation. From aviation to energy, the skilled worker gaps are enormous. This also has dangerous implications for our national security. In order to maintain the world’s most sophisticated military, we must produce systems, parts and hardware in America. Without domestic manufacturing operations, some critical component work has actually been moved to other countries as a stop-gap measure. The hard costs are painful, too. A 2011 survey by The Nielson Company among executives from 103 large U.S. manufacturing firms found that on average, the shortage of skilled workers will cost each company $63 million over the next five years, some as much as $100 million. These costs include training and recruiting, followed by problems caused by lower quality and resulting decreases in customer satisfaction. Manufacturers and builders cannot afford to utilize under-skilled workers without increasing many types of severe liability risks. Negative media images of skilled workers – what I call “essential workers” – pervade our culture and are contributing to the problem by discouraging young people from pursuing careers in the skilled trades. Educators, employers and community leaders are slowly becoming engaged in efforts to counter this dangerous trend that often portrays “blue collar workers” in TV shows and movies as thugs, drunks and murderers. Advertisers can be alert to these cultural stereotypes and use advertising dollars to support TV shows and movies that show respect for skilled workers. It is in America’s interest to mobilize the public to restore the dignity of essential skilled workers. Another contributing factor to the coming shortage is that most of high school vocational arts programs so popular in the ’50s and ’60s have been closed in the >> change our business model. That will be devastating for America. Although general unemployment remains high, many employers are desperate now for skilled workers to fill essential jobs and this problem will grow as veteran workers retire. We can already see how the skilled worker shortage is causing us to lose the production edge that has fueled America’s economy.  EDUCATORS AND MANUFACTURERS MUST ADDRESS THE SKILLED-WORKER SHORTAGE.  It is critical to our economy and national security.

OK, now back to the fourth industrial revolution.

The fourth industrial revolution will affect many areas in our daily lives and certainly will be felt on the facility floor. A number of key impact areas emerge:

  1. Services and Business Models.  The ability to produce rapidly and with minimal defects will definitely affect the business model and make company products much more marketable.
  2. Reliability and continuous productivity
  3. IT security.  IT security is a must.  Systems must be put in place to guard security because a great number of commands received and sent will be from wireless devices.
  4. Machine safety.  Machine safety is always critical.  Safety must be taught to employees and those managing employees.
  5. Product lifecycles.  Product life cycles will shorten due to flexibility of production capabilities.
  6. Industry value chain
  7. Workers (See above.)
  8. Socio-economic.  The workforce will need additional training and this will drive labor rates upward.  In my opinion, this is a good thing provided individuals will take on the challenge.
  9. Industry Demonstration: To help industry understand the impact of Industry 4.0, Cincinnati Mayor, John Cranley, signed a proclamation to state “Cincinnati to be Industry 4.0 Demonstration City”.
  10. A recent article suggests that Industry 4.0 may have beneficial effects for a developing country like India.

As you can see, we are living in fascinating times.  Industry 4.0 is coming and those relegated to a spectator position will lose market share and will cease to be competitive.

As always, I welcome your thoughts.

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