A confluence of trends and technologies, Industry 4.0 promises to reshape manufacturing, says McKinsey & Co. More than a catch-phrase, Industry 4.0 probably isn't the next technological revolution, but it is set to spark off trends that will change the face of many businesses dramatically, says the global business consultancy.
So what does this mean for businesses looking for new ways to stay relevant and get ahead in a highly competitive environment in which the rules keep changing?
Dr. Graeme Philp, Chief Executive of Gambica - the trade association for more than 200 companies that specialise in instrumentation, control, automation and laboratory technology - shares some pointers on how UK manufacturers can take advantage of Industry 4.0.
1. Use connectivity for mass customisation
Industry 4.0 is about the industrial aspect of the internet of things, he says. "Take the opportunity to see what business sense there would be in making products `connected' by introducing wireless capability."
Add "health and usage monitoring capability" for a predictive maintenance element, he suggests. Use connectivity to become more responsive by, for example, linking the electronic ordering of parts to elements higher up the supply chain. Instantly connecting your order book allows you to manufacture products to customer-specific specifications, so manufacturing becomes about mass customisation rather than mass production, he explains.
2. Manufacture in the virtual world first
Tap into the powers of technologies that allow you to produce realistic virtual examples before you develop them for the physical world, advises Dr Philp.
"Companies should consider whether there's value in being able to simulate products before building them, so that they aren't building prototypes and having many design iterations," he says. Costs have fallen and techniques have become simpler, making this type of technology more accessible to smaller companies.
Tap into the powers of technologies that allow you to produce realistic virtual examples before you develop them for the physical world
3. Think in circles
Industry 4.0 can be a route to making a business plan out of the circular economy, notes Dr Philp. This is an economy in which products are made to last longer and be recyclable at the end of their lives.
The days in which we replace appliances like washing machines every three to four years as they break down are numbered, he says. Directives based on an EU Action Plan for the Circular Economy will discourage companies from selling products with short lives.
"Your washing machine will be built to last. It will be more expensive and will probably be leased rather than bought, rather like a mobile phone today."
Of course, while innovative UK companies are working towards deploying Industry 4.0, success will ultimately depend on a modern, efficient digital infrastructure across the country. With data links dropping on road and train journeys, the UK is still some way behind other countries in Europe, adds Dr Philp.
- Greater connectivity between machines will create new opportunities for manufacturers to sell more services
- Virtual and augmented reality will be harnessed to test products before making costly manufacturing mistakes
- New business opportunities are emerging as more countries embrace the circular economy
For further information about trading internationally, visit the HSBC Connections Lounge at the International Festival of Business in Liverpool where an HSBC Trade Specialist will be on hand to answer your questions or call +44 (0)800 78 31 300. Lines are open from 9am -5pm, Monday to Friday and calls are recorded for security and training purposes.