The following article was published on 22 January 2016 on LinkedIn Pulse series.
This week, we have been bombarded with news coming from the World Economic Forum taking place in Davos, related to the 4th Industrial Revolution and its devastating impact on jobs worldwide.
This Swiss nonprofit foundation needs this kind of viral news to call attention to its mission and the truth is that the flames propagated quite well:
- Fourth Industrial Revolution tsunami warning in Davos
- Robots, new working ways to cost five million jobs by 2020, Davos study says
- Technological hope vs fear in Davos
- Fourth industrial revolution set to benefit richest, UBS report says
WHERE DID THIS ALL COME FROM?
What is particularly interesting is that the spark that ignited all of this was the Industry 4.0 Working Group whose final report came out already in April 2013.
This group aimed to define Germany’s investments in research and development related to manufacturing for the upcoming years. The main objective is leveraging the country’s dominance in machinery and automotive manufacturing in order to position it as a leader in this new type of industrialization.
Since then, both academia and industry professionals have been trying to fully comprehend the consequences for manufacturing.
AND WHAT IS INDUSTRY 4.0 EXACTLY?
Industry 4.0 is based on a rather fascinating concept: Cyber-Physical Systems (a fusion of the physical and the virtual worlds) CPS, the Internet of Things, 3D Printing and the Internet of Services, among other technologies will collectively have a disruptive impact on every aspect of manufacturing companies. It is the 4th industrial revolution.
Click here to see a picture published first in: Recommendations for implementing the strategic initiative INDUSTRIE 4.0 - Final report of the Industrie 4.0 Working Group
What is new is that, unlike all others, this particular revolution is being predicted, therefore allowing companies to take specific actions before it happens.
So companies can begin now to define their target model and then plan a transformation road map. Despite the significant hype around the topic, nobody knows what the exact consequences are for manufacturing operations or when will these happen, although there’s a clear notion that the later-movers will most likely be forced out of the market.
While there’s still a lot of hype about the implications, the confusion starts with what matters in Industry 4.0. Considering the technology enablers for Industry 4.0. include Mobile, Cloud, Big Data analytics, Machine to Machine (M2M), 3D Printing, Robotics and so on there are many companies with particular expertise. While these are in fact the disruptive technologies triggering the transformation, this Industry 4.0 revolution goes far beyond these and is highly related with Cyber-physical Systems.
WHAT ARE CYBER-PHYSICAL SYSTEMS?
Cyber-physical Systems (CPS) are simply physical objects with embedded software and computing power. In Industry 4.0, more manufactured products will be smart products, CPS. Based on connectivity and computing power, the main idea behind smart products is that they will incorporate self-management capabilities.
On the other hand, manufacturing equipment will turn into CPPS, Cyber-Physical Production Systems - software enhanced machinery, also with their own computing power, leveraging a wide range of embedded sensors and actuators, beyond connectivity and computing power. CPPS know their state, their capacity and their different configuration options and will be able to take decisions autonomously.
As mass production gives way to mass customization, each product, at the end of the supply chain, has unique characteristics defined by the end customer. The supply chains of Industry 4.0 are highly transparent and integrated. The physical flows will be continuously mapped on digital platforms. This will make each individual service provided by each CPPS available to accomplish the needed activities to create each tailored product.
While the challenges at the supply chain level are quite big, the challenges at the factory level are not smaller. The combination of CPS and CPPS is likely to trigger significant changes in manufacturing production and control, towards completely decentralized systems.
OK, BUT SHOULD WE BE SCARED ABOUT LOOSING JOBS, OR NOT?
All summed up, this revolution is likely to boost productivity, quality of products, delivery reliability, faster introduction of new products, each time more tailored to each individual customer preferences, etc.
Additionally, and of critical importance, this revolution will create tons of new business opportunities, not just with smart products, but also with new smart services.
These will be the key market side differentiators, as they will allow adding value, both at the supply chain level (including manufacturing) and at the customer level with new customer experience and disruptive service delivery, leveraging the most important asset of the future: data.
So this fourth revolution will necessarily encompass a movement away from low value-added repetitive jobs into higher qualified jobs.
And one last thing: despite being predicted and the sums already invested in it, it’s not going to happen from day to night. It will take time. Like always, some persons and some companies won’t adapt fast enough. But in general the workforce will adapt into the new reality.
Francisco Almada Lobo will be talking about this topic in several upcoming events, while the first already happened at Talk A Bit - the Social Impact of Technology on 30 January 2016. In the meantime, please check this video from the World Economic Forum on the Fourth Industrial Revolution, painting a much brighter tomorrow.