Historically, manufacturing revolutions have resulted in huge growth spurts in our economies proving to be a catalyst in massive productivity improvements. For example, in the middle of the 19th century, the invention of the Steam Engine revolutionized the Industry 1.0 era. While the mass production model made by the first moving assembly line and conveyor belts in the middle of the 20th century typified the Industry 2.0 era, the1st automation wave in the 1970s powered by electronics and computers marked the next industrial revolution i.e. the Industry 3.0 era.
Today, we find ourselves once again in the middle of a massive change, promising industry disruptions never seen before, not surprisingly coming from manufacturing. This is Industry 4.0. A major overhaul is on the horizon and today’s discrete manufacturing industry is poised to take the leap, to be competitive and lead the way into the future. Those who do not will be watching a leaving train, wishing they were on it.
The need for change in manufacturing processes is not new and in fact it has been happening constantly keeping up with the changing customer demands, moving from a product-centric to a customer-centric economy.
Around the year 2000, the market for industrial goods exploded globally and we entered the era of “Market Push”. As volume was of the essence, Manufacturers adapted and made factories larger and specialized them by product. The idea was to make a lot of the same product and stockpile it to be sold with demand. This “Made to Stock” process helped productivity for a while, but introduced a lot of rigidity in the supply chain. E.g. If a customer wanted to buy a car, there was minimal flexibility in terms of choice available to the customer. Even if the customer wanted a red car, he may have to go with the standard white or black that the dealer has in stock.
Around the year 2010, the market changed, as after purchasing the same worldwide standard product, customers wanted products more suited to their local needs. The products became configurable and along with the products came a set of services to further enhance product value and usage. Manufacturers now shifted from “Market Push” to “Market Pull”. This increased the complexity of the product and the need for speed and introduction of new products rose significantly. Manufacturers had to adapt and find ways to be more reactive to customer needs and thus emerged a new process called “Made to Order” that served well the needs of the year 2010. E.g. In this product strategy, a car is made to suit customer needs with options; a customer could not only pick out the color of the car but also choose attributes such as power, suspension, size of wheels, number of seats, material, and so on. Manufacturers went above and beyond to offer even warranty for ~100,000 miles on the car.
Today, the ubiquitous access to technology has opened up unlimited possibilities; customers do not want to buy just a product but want to have experiences. This is the genesis of the “See Now / Buy Now” culture, to have access to a product at one’s fingertips, purchase it at the click of a button and use it in its own unique way. Enter the digital “Age of Experience ” requiring products to be personal, unique and highly customizable. E.g. In addition to choice of color, specification and added services like warranty, customers now have the flexibility to view the complete car in 3D, look deep into the specs and compare them with competitor cars before making a choice to buy the car without physically going to the dealer.
Stepping into the Fourth Industrial revolution: Age of customer-centric hyper-customized products
I4.0 and its impact forced manufacturing industry gurus to re-think the supply chain end to end. It was time to reinvent the supply chain by combining with large technological innovations to create the next major manufacturing revolution. This would enable the value chain to be highly productive, flexible and adaptive to change.
Following are some of the Industry 4.0 technology enablers.