Why is Industry 4.0 an Opportunity for Small Manufacturing?

What Is Industry 4.0?

The term Industry 4.0 first entered the vocabulary in the last decade, standing for the fourth industrial revolution. Over time, industry moved from a manual process to machinery and steam power, then to electric processes and assembly lines, then to computerization and automation. Industry 4.0 marks a major transition to artificial intelligence, big data, and cyber management systems.

Industry 4.0 and Economic Growth

The investment firm Morgan Stanley estimates that the growth rate of the Second Machine Age is about 17% on a Compounded Annual Growth Rate basis for the next few years. They further estimate that companies in the manufacturing field will invest more than $600 billion a year in IT in the next ten years, across areas like AI software, autonomous vehicles, IoT hardware, industrial software, robotics, and semiconductors.

Aside from the IT themes driving technology advancements, there is the concept of Project Life Cycle, which enables companies to improve productivity significantly using cloud-based collaboration. Industry 4.0 allows manufacturers to move from discovery and innovation phases to product launch faster. According to CapGemini, only 16% of surveyed organizations are fully implementing Digital Twins.

Why Is Industry 4.0 Important?

Simply stated, the process improvements of this industrial revolution will create a substantial amount of wealth. Although larger companies can afford to invest in the necessary engineering technology, startups are also moving into manufacturing with a more nimble and collaborative approach. This makes it imperative for small to medium size companies to move fast and look for alternatives to compete effectively.

Big Data Is the Heart of the New Revolution

At the heart of these industrial advancements is data—accurate, readily available data—that can be easily managed. Data previously stored in 2D CAD files must be workable in new 3D technologies as industry moves to a digital model approach. To compete in this second industrial revolution, small and medium size companies need to start by digitizing product portfolios.