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Tags: industry | transform | manufacturing | economy

How Industry 4.0 Will Transform Manufacturing Economy

How Industry 4.0 Will Transform Manufacturing Economy

By    |   Monday, 30 March 2020 09:11 AM EDT

While the Industry 4.0 market is expected to be worth over $26.7 billion by 2024, it begs the question, what does that really mean for the manufacturing economy?

There’s still a lot of ambiguity about what the term Industry 4.0 means almost a decade after a group of mechanical engineers coined it. It’s clearly about more than introducing new technology in the manufacturing sector and building on the legacy of the last three industrial revolutions.

For this look at its economic impact across countless sectors, lets settle on a definition of it being “a unified system with robotics control, automation tools, and big data analytics for effective operation and production in the manufacturing sector.” That still seems far too narrow (and ambiguous) for a global industry encompassing this sampling of a long list of primary and secondary technologies:

  • Industrial Internet of Things (IIOT)
  • Automation
  • Location Detection
  • Human Machine Interfaces
  • Big Data Analytics
  • Smart Sensors
  • Cloud Computing
  • IoT Platforms
  • AR/VR
  • AI
  • Additive manufacturing (3D printing)
  • Blockchain
  • Robotics
  • Digital Twins

Many of these technologies and platforms are interconnected as part of a holistic approach used by global Industry 4.0 market sectors like:

  • Industrial Manufacturing
  • Aerospace and Defense
  • Electronics
  • Automotive
  • Transportation
  • Chemical
  • Oil and Gas
  • Energy, and many others

Major players across these and other sectors are making massive investments in Industry 4.0. This is happening at the same time as the list of companies providing the technologies and driving industry 4.0 are also growing daily.

Since we’re at the beginning stages of this transformation, many investments are geared to Proof of Concept (POC) as a prelude to full scale production. There is also a significant amount of investment going to full-scale production. The enormous challenge for existing manufacturing plants is that many are decades old with machines that are unable to transmit and receive real-time data.

According to Thomas Insights, the average production line has five to 15 machines from different vendors and with different protocols. This leads to complex problems including a lack of operational visibility and flexibility, reactive maintenance, and unplanned downtime that all costs money. These older machines aren’t designed to work in Industry 4.0 environments and are prone to breakdowns accounting for up to $50 billion per year in lost manufacturing time.

The countless companies in different stages of transformation are looking at their digital infrastructure needs to determine how and where to best implement fundamental technologies. These multiple interlocking solutions platforms rely on constant access to each other and to the cloud, which requires constant, dependable 24/7/365 wireless connectivity.

That’s why a significant amount of investment is going into the many burgeoning technologies that are an outgrowth of the broader industry 4.0 economy. Most of these will rely on connectivity via 5G, cloud, NB-IoT and edge computing. But from an economic perspective, a disruptive paradigm shift like Industry 4.0 will provide countless opportunities and challenges for the workforce and the entire value chain.

Challenges of Industry 4.0

Like most global paradigm shifts, Industry 4.0 evolution will be a mix of opportunity and challenges like worker displacement over time. An Oxford Economics report estimates that about 8.5% of the global manufacturing workforce stands to be replaced by robots, with about 14 million manufacturing jobs lost in China alone. By 2030, considered the midpoint of Industry 4.0 development, 75 to 375 million people may need to switch occupational categories due to automation adoption.

The World Economic Forum (WEF) predicts that eight to nine percent of labor demand will be in new types of occupations leading up to the year 2030 including sectors like:

  • AI
  • Robotics
  • Blockchain
  • Customer service
  • Sales
  • Marketing

McKinsey projects creation of as many as 890 million new jobs by 2030 that is predicted to offset automation job loss. For companies, Industry 4.0 revenue increases are projected to be around 2.9% annually due to:

  • Shorter operational lead times
  • Higher asset utilization
  • Maximized product quality

While this adds up to billions in new revenue and cost savings, the investment in the technologies to get there will also be expensive. This is true from the standpoint of wireless connectivity via 5G, which will drive Industry 4.0.

To obtain this ultra-reliable, high-speed, low-latency, power-efficient, high-density wireless connectivity, a company will either have to look to public 5G networks or private 5G networks. By 2024, the value of cellular mobile equipment and services for use in private networks will likely add up to tens of billions of dollars annually.

How Data and Technology Drive Industry 4.0 Economics

Data is at the heart of all this change with Industry 4.0, IoT, 5G, edge computing, the cloud and other connected technologies. Solution providers that enable data connectivity, processing, usage, and transport will see enormous opportunities. The same goes for companies developing/controlling portions of Industry 4.0 Platforms including software layer solution providers like IoT SaaS (IoT software as a service) and IoT PaaS (IoT platform as a service).

The entire vertical within wireless connectivity will also benefit tremendously. But there will also be many sectors that aren’t as obviously connected to industry 4.0 that will see major growth from its spread. This includes information and services providers to business processes such as skills retraining, supply chain, maintenance, customer service and marketing among others.

Product development, innovation, and new business lines will all be possible. Examples include 3D printing at scale offering possibilities for manufacturing from tooling to mass customization across virtually all industries. The use of digital twins and simulations will also enable safe and rapid system design, R&D, and experimentation paving way for new product designs.

There are many economic opportunities up and down the manufacturing value chain today with more developing alongside evolving Industry 4.0. Tapping into those possibilities will require companies, solution and platform providers, and OEMs to develop sound strategies capable of evolving along with digital manufacturing.

Darren Sadana is a 25-year veteran of the cellular communications industry, expanded his highly successful nationwide network of retail cellular service to include Choice Business Connections.

© 2022 Newsmax Finance. All rights reserved.

Industry 4.0 will change the economics of manufacturing forever in countless ways through IIoT, 5g and a host of technologies and platforms.
industry, transform, manufacturing, economy
Monday, 30 March 2020 09:11 AM
Newsmax Media, Inc.

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