Industry 4.0i is here: the fourth stage of the Industrial Revolution, characterized by the interconnection of highly intelligent cyber-physical systems, to create the "Internet of Things." The explosion of social, mobile, analytics and cloud technologies (the SMAC Stack™), nanotechnology and sensors, not to mention simulation software, is slowly changing the manufacturing landscape. Factories are already emerging in which everyone — from plant managers to senior leaders — shares information and accesses analytics to improve operational efficiency and productivity. As a result, four essential elements of manufacturing are converging unlike ever before, creating a what we call "informed manufacturing," as depicted in Figure 1.
Informed products use embedded sensors to monitor performance and register information associated with their production and operation. This makes them uniquely identifiable and locatable at all times and capable of controlling the individual stages of production, semi-autonomously.
Informed products can also help trigger new business models and increase customer intimacy. For example, we helped develop an application for a Big Three car maker that uses sensors embedded in automobiles (think telematics device) to gather data on driver behavior and monitor the health of the car (see Figure 2). (For more on this subject, see our white paper, "Exploring the Connected Car"). This allows insurance companies to base the price of policies on how a car is driven and where it travels, rather than on traditional information such as the age, gender or address of the driver.
Informed people will leverage intra- and inter-enterprise social technologies and mobility tools to link individuals (suppliers, designers, dealers, customers, etc.) across the globe to propel deeper collaboration and information sharing, and to make informed decisions on short notice. They will also allow manufacturers to realize benefits such as early verification of design decisions, rapid response to supply chain disruptions, addressing of unique customer specifications and manufacturing for maintainability. Ultimately, they will enable companies to deepen loyalty and improve engagement among employees and customers.
For example, we developed a social media analytics solution for the sales and marketing team of a major automotive OEM. By leveraging social media analytics tools, the team can discover, decompose and distill unstructured data from multiple public forums regarding the company's products and turn it into actionable customer sentiment.
Informed processes focus on bidirectional information sharing across the entire value chain, from suppliers to customers to provide a flexible and adaptable value chain and advance plant-wide efficiency. Product diagnostics data and product performance data are directly infused into manufacturing operations so production activities can be corrected autonomously, sooner rather than later. This can then support mass customization, in which an individual customer's requirements can be met during production. Informed processes would also enable manufacturers and retailers — across industry sectors — to create more adaptive supply chains that rapidly adjust to changing requirements.
For example, a major building materials supplier faced high transportation costs and spoilage as customers repeatedly changed their orders and delivery schedules. Using global positioning system (GPS) sensors mounted on cement trucks and linked to a central control center, the company is now able to reroute trucks dynamically, based on up-to-the-minute information about changing customer requirements. As a result, the company has reduced delivery time from three hours to 20 minutes, cut the number of delivery trucks by 35%, trimmed operating costs by $100 million, and improved on-time deliveryii.
Informed infrastructure responds intelligently to changes in its environment, including user demands to achieve improved performance. Here, machines are connected to one another using a feedback loop of data, which provides intelligent decision-making. The system can monitor, measure, analyze, communicate and act, based on the information within its operational environment. This provides the ability to integrate data across multiple plants and make it available over the Web or mobile devices.
Informed infrastructure also helps machines make context-based decisions autonomously. For example, computer servers draw power continuously, and on a 24x7 basis, but they are sometimes used at minimal capacity since they often support specific business activities. But most plant managers lack a detailed view of energy consumption patterns and, hence, are unable to efficiently manage power consumption. Using software and information feedback techniques, informed infrastructure would enable servers to be powered down intelligently during certain times of the day when need is minimal, thus providing significant energy and cost savings.
Informed manufacturing is a critical weapon to respond more quickly to competitive global market pressures and remain ahead of rivals, through a data-driven business model. Manufacturers need to consider building new competencies around understanding and applying informed products, people, processes and infrastructure. We recommend:
Start experimenting by embedding sensors into products, machines and plants and make meaning from the information collected through business analytics.
Determine the tools and processes that will improve collaboration by offering new platforms for information exchange and rich discussion — perhaps by implementing social business technologies, introducing "bring your own device" policies, and enabling integration of unstructured data from the Web and other digital channels (mobile and social media) with structured data from systems of record.
Look at integrating product diagnostics data, environment information and user demands directly into manufacturing and operations to make processes flexible and adaptable. For this, companies need to first focus their efforts on standardizing data across various systems throughout the value chain and developing a new talent pool beyond the obvious (and existing) technical skills in mechanical or electrical engineering.
Investigate a large-scale supporting infrastructure. Data centers, fiber networks and broadband will be needed to connect various machines and networks across industries.
For more real-life examples and research-driven analysis, read our whitepaper 'Informed Manufacturing: The Next Industrial Revolution' [PDF]. Please visit Cognizant's manufacturing and logistics practice for more information.
i Industry 4.0 is a component of the German government's high-tech strategy, which promotes the computerization of traditional industries such as manufacturing.
ii Craig Hartman, Robbert Kuppens and Dirk Schlesinger (editors), Connected Manu- facturing: Thought-Provoking Essays from Industry Leaders, Premium Publishing, 2006, http://www.cisco.com/web/CA/pdf/Cisco_Connected_Manufacturing.pdf.