Industry 4.0

Industry 4.0 what it is and how it can revolutionize the industry

La industry 4.0 It is a new industrial paradigm that aims to revolutionize the industry as you know it now. It is already being implemented in many current companies, and it is intended little by little to migrate to the rest of the companies. In this way, a total digital transformation will be implemented for factories and companies that are much more intelligent, efficient and productive.

Undertaking this path towards industry 4.0 is a great opportunity to modernize your company, take advantage of all the new technologies and, ultimately, create a more dynamic, efficient and profitable business compared to a more conventional industry.

History of the industry. The fourth industrial revolution

The history of the industry has been marked by revolutions that have changed the way people work. The industry 4.0 is nothing more than the fourth industrial revolution, or the fourth paradigm shift that has been implemented in this sector. Hence its name. But to understand it better, you have to look back ...

  • Industry 1.0: the first industrial revolution came thanks to the steam engine to drive a series of automatic machines that allowed to reduce labor costs and greatly improve production. It happened in Europe and North America in the mid-XNUMXth century and well into the XNUMXth century.
  • Industry 2.0: the second industrial revolution would come between 1870 and 1914. In this case due to the electrification of industry, as a new energy source. That brought new capabilities to the industry, and a push for mass production, as well as technological advancements like the telephone, the light bulb, etc.
  • Industry 3.0: the third step in the industrial revolution came when the digital or computer age came to the sector. Now all industrial processes could be controlled in a better way and computers could help in many ways (design, calculation, connectivity, ...). This third revolution would come during the 80s.
  • Industry 4.0: a few decades after the third, a fourth would arrive. Largely driven and accelerated by ICT. Now new capabilities are added with the cloud, IoT, AI, robotics, nanotechnology, quantum computing, 3D printing, autonomous vehicles, etc. Although many of these technologies have been around for years, but in this 4.0 it is intended to make intensive use of them at a productive level.
the fourth industrial revolution, and all its predecessors

Who knows what the future holds, and if the proliferation of artificial intelligence beyond what we currently know could mean another great revolution where human labor is not needed for production ... In fact, some philanthropists have proposed that these systems pay taxes for the contribution and social benefit of the future. A problem to alleviate the problem that would be caused by the lack of contributions for workers replaced by machines.

What is Industry 4.0?

La Industry 4.0 is not something in the future, it has already arrived and intends to stay. Companies have two options, ride the crest of the wave and benefit from its potential or fall behind by not adopting a complete digital transformation. AI, robots, cloud computing, fog computing, and edge computing have great benefits, even for SMEs.

Obviously, not all companies need all of these emerging technologies, but they could adopt some of them. This overwhelming digital technology could largely replace traditional processes.

By example, It can:

  • Replace the current slow bureaucracy with a more agile and cheap one thanks to the digitization of processes.
  • Quickly and effectively analyze large volumes of data thanks to Big Data. That could mean making market predictions or adapting to new needs much faster. In addition, anticipate the resources you need for this change, such as increasing production machinery, storage capacity, etc. For example, the data that many users move through social or browsing networks can be used to know what they are demanding at the moment, what they like and what they don't, being able to improve advertising campaigns and give them what they are looking for so much.
  • The IoT (Internet of Things) or Internet of Things, can also connect different systems and machinery with each other, which will provide them with a “collective intelligence” so that they can communicate with each other and work in a holistic way. That can reduce latencies between production processes, prevent problems, etc. For example, a machine that creates a part to be used by a subsequent machine might report a delay for that machine to shut down and consume no power while waiting.

However, all this brings new challenges, such as cybersecurity. This becomes even more important, but technologies such as AI or the cloud can mean that this does not pose a problem for the employer, but rather that a third party is in charge of maintaining the necessary protection measures. So the industry only has to worry about its work.

Industry 4.0 adoption

adaptation of the industrial fabric to industry 4.0

Really it has not come out of nowhere, small steps have been taken in the past until reaching this industrial revolution 4.0. Some waves of new technologies have made this paradigm possible. One of those waves was the one started in the 80s, with computers and the use of CAD / CAM software, as well as FMS (Flexible Manufacturing System) and CIM (Computer Integrated Manufacturing) systems.

That began to make the already automated and electrified production systems in the industry more flexible. In the 90s another great step would come, as lthe massification of the Internet and other technologies related to it, such as the concepts of CRM (Customer Relationship Management), SCM (Supply Chain Management), etc.

With SCM supply chain management can be performed, improving the process to meet customer needs effectively. This goes from the movement and storage of raw materials to the end of production and placing the product on the consumer market.

Furthermore, the CRM It is another management system based on the relationship with customers. It is a marketing strategy to which this type of software has contributed greatly, including business management systems or SGE such as CRM itself, but also ERP (Enterprise Resoruce Planning), PLM (Product Lifecycle Management) , etc.

In the XNUMXst century, new advances would arrive such as the concept of M2M (Machine to Machine), a concept that refers to the communication or transfer of data between two machines in the industry. And that would reach its zenith thanks to the IoT, which would allow not only communication via bus and industrial protocols, but also Internet connectivity for these machines.

Step by step these improvements have been adopted, especially Germany, where they have one of the most automated and advanced industries in the world. In fact, it was there that the term Industry 4.0 was coined. From there, it has been expanding to many other countries in the world, and it has become almost a salvation for many companies that are in trouble.

How does industry 4.0 affect a company?

One of the initial questions many entrepreneurs ask is how this might affect you. Really the proper word would be to benefit, or affect in the positive sense of the word, since it will mean a rapid and notable improvement in the company.

In addition, upgrades usually come pretty fast. Although it is true that it is not free of some drawbacks, such as an investment to carry out said transformation. In addition, in some cases you may need some training for the workers. Many open source or free projects could solve the problem of costs by not having to pay for licenses, so the problem is only reduced to the latter.

If you adopt a strategy for a transformation towards an industry 4.0, you may notice improvements especially on several levels:

  • Smart factories and companies. Industry 4.0 can make automation and intercommunication between machines more intelligent, optimizing production processes, making them more flexible and efficient, as well as obtaining greater benefits. Like for example that M2M taken to a new level that I have talked about before.
  • Digitization. By implementing key new technologies and digitizing processes, many processes that are now time-consuming and cumbersome can be improved, especially bureaucratic ones. Much more sophisticated tools, such as simulation, monitoring and prediction, can also be used to anticipate changes and better adapt, making it a more competitive company. It could even include an HMI (Human Machine Interface), to improve user support.
  • Hyperconectivity. The IoT would bring that interconnection of all machines and other devices. They not only have to be machines, they can also be transport vehicles to be aware of possible delays, make a multitude of objects can provide information, etc.
  • Advanced robots. Robots have been used in industry for decades, but now those machines can be much more precise and efficient thanks to AI. Artificial intelligence could even make them learn, improve, make decisions in a logical way as a human would do, etc. This largely supplies the need for operators who previously had to be present when the machine did not know how to do certain tasks ... And not only should this be interpreted as an improvement in factory robots, AI systems can also be implemented in telephone answering machines, service services, autonomous vehicles, etc.
  • Outsourcing. Instead of companies with vertical services, the integration of horizontal cooperative mechanisms such as outsourcing can also be improved. Many companies are looking for allies to outsource services. This is quite common in, for example, security issues or data centers. Instead of having to deal with a physical server, they hire this service in the cloud (IaaS, PaaS, SaaS, Storage, ...).
  • Big Data: allows massive data analysis, be it internal research data, customer data, as well as data analysis on social networks, etc., to create new and effective marketing strategies, predict changes in demand, etc.
  • Cloud Computing. The cloud can offer a multitude of services to companies of any size, even freelancers. From web hosting for your online store or official website, to storage, software as a service, VPS (Virtual Private Server), external security and backup solutions, and much more. In addition, it can also be complemented with the so-called fog computing (intermediate between cloud and edge) and edge computing. Being the edge devices from mobiles, computers, or even connected industrial machines. For example, imagine a fleet of autonomous delivery vehicles connected by different routes that are on that edge and that send information about the route, times, traffic lights, traffic, etc., to a server and this can record this data and return information to those vehicles to find faster schedules and routes or avoid congested traffic areas. That would improve logistics and reduce fuel and time costs.
  • 3D printing. Thanks to this type of printing, 3D models of all kinds of materials can be created, from polymer resins (plastics), to other fibers such as nylon, through concrete, and even some industrial ones can manufacture metal parts that are impossible to manufacture with molds, by extrusion, etc. This impression has been a great improvement for the industry.
  • VR, RA, and MRI. Virtual reality, augmented reality and mixed reality can also help in departments such as R&D for the design and simulation of new products, even the way to present your products and services to the consumer.

Evidently it is not necessary to implement all these points for an industry 4.0. Some may be useless depending on which companies. But surely at least some of the points or several of them could benefit your business.

How do you start to implant?

If you are determined to implement the industry 4.0 model For your business, you must first know that there are a series of obstacles that you must overcome. One of the main ones is the lack of digital culture or lack of training in computer systems. That together with the resistance to change of the employees is usually one of the first problems. But nothing that does not solve a training, in many cases it can be very slight, in others it is not even necessary ...

Another of the missing points At the time of implementing this type of paradigm, it is usually the lack of a correct industrial modernization strategy. You must observe and analyze what your business needs to be able to implement that. Without a plan you won't go too far. In addition, you must know how to take care of your staff, since they will be the engine of change towards Industry 4.0 (that implies understanding, training and specialization).

You must also find the right technology partners. Companies such as IBM, Red Hat or Telefónica are helping many companies in Spain to make this change thanks to their business solutions. They will provide the tools, services and security necessary for change.

Once you have that clear, the implementation phases for Industry 4.0 can be summarized as:

  • Identification: moment in which the technological analysis and situation of the company is made. Here the competitive environment and the market must also be analyzed. In this way, the degree of maturity of the company is obtained to face this change, identifying opportunities for improvement and weak points to reinforce.
  • Selection: the improvement opportunities obtained from the previous phase and the objectives sought will be analyzed. You should look for the appropriate technologies that can help you differentiate yourself between the competition, savings and productivity improvement, and the ability to implement each of the improvements (analyze costs, time, training ...).
  • Implantation: Now is the moment of truth, when all the improvements discussed above are actually implemented. With the plan drawn up, you will have all the tasks or steps to follow in the schedule to achieve the objective.

Industry 4.0 in Spain

how is Spain doing in this industry 4.0

Keep in mind that the economy of countries is highly dependent on the industrial fabric, and with the threats of economic crises, this concept could be a good strategy to improve competitiveness and adapt more quickly to a very changing sector. The current SARS-CoV-2 crisis could be the boost you need to be able to opt for this paradigm.

La European Commission It has set ambitious goals in terms of the GDP contributed by the industry, although the Covid-19 has disrupted all those plans. Those objectives of the EC expected that the community countries, among which Spain is found, would have a percentage of 16 - 20% by 2020.

Despite those forecasts, Spain has lagged behind those goals, since here it has only been approximately 14%. More investment should be made in R + D + i to improve this situation, since there is a lot of talent in Spain, but some opportunities and investment are lacking. Despite these figures, Industry 4.0 could help achieve the European objective and make the national productive fabric much more competitive internationally.

Europe needs that if it wants be competitive against the United States and China. Russia does not represent a major economic threat to Europe, since countries like Germany alone could already compete with them as equals. But even so, each member state needs to be lifted towards urgent modernization.

The DESI or EC Digital Economy and Society Index is quite clear. Countries like Denmark, Sweden and Finland They are among those with the most advanced digital economies in the EU, and it is no coincidence that they also enjoy one of the best welfare states and economic stability.

If you analyze the Spanish industry in comparison with its European partners, you realize that there are several weak points to remedy:

  • Low investment in R + D + i, with 1,24% in the case of Spain. Very far from the 3% average in Europe, or countries like Sweden and Switzerland with 3,3%. This can be seen as a large public expenditure, but it really is an investment, since countries like the US invest a similar percentage of their GDP to the European one and then it is reverted in a profit of 50% of the GDP thanks to this investment.
  • Low commitment to the digital transformation of the industry. Having an industrial fabric where the self-employed and SMEs prevail, many do not see themselves capable of embarking on the path to digitization or do not consider it important. But it is. For example, a small clothing store in a town could create a web store and expand its sales nationwide. Even more so with situations such as those experienced by the coronavirus.
  • Low presence in international markets and business size. Despite the fact that many Spanish industries export to Europe and other countries, in percentage compared to countries such as France, Germany, etc., they have little presence at the international level. Not only that, more and larger company sizes are needed. Here there are few large companies, more companies such as Repsol, Cepsa, Inditex, Endesa, Telefónica, Seat, etc. are needed.
  • High energy cost. In Spain, the cost of electricity, in addition to other sources, is high compared to other countries. This complicates things for industries that demand this type of energy, since it makes production more expensive and makes final prices have to adjust to obtain a profit margin, making them less competitive.
  • Variation in sources of income. Spain has gone from a high dependence on construction (brick bubble) to a high dependence on tourism. One bubble burst with the 2008 global crisis, and now SARS-CoV-2 has fatally wounded the second. The economy cannot be allowed to look so deteriorated with each problem, greater variety is needed and a commitment to other sectors that are not so affected by these crises.

But all that has a solution, or at least in part ...

Industry 4.0: the help Spain needs

With industry 4.0 or connected, they could minimize some of the negative impacts of the previous points. For example, if we re-analyze the impact of implementing this new paradigm with respect to the previous points, we would have:

  • Low investment in R + D + i and variation of sources of income. In this sense, Industry 4.0 does not have a direct benefit. It is the government that should reconsider the investment. But it can do a lot in terms of bubbles, fostering the industrial sector as Spain's main economic engine.
  • Low commitment to the digital transformation of the industry. A digital transformation of a company could bring great benefits such as those mentioned in previous sections. Even if you are self-employed or an SME, digitizing the business can only bring positive benefits, better efficiency, and higher productivity.
  • High energy cost. The savings from using new technologies and having a smart and connected business could lead to significant energy cost reductions. Greater efficiency and energy savings could alleviate this endemic disease in Spain. In addition, it would be accompanied by improvements in production with costs reduced by up to 20%, reduction of costs in logistics around 10-20%, lower inventory of 30-50% and also reduction in costs due to quality problems around the twenty%.
  • Low presence in international markets and business size. If you analyze all the improvements of the previous points by Industry 4.0, it could have as a collateral effect a growth in business size and a greater presence at the international level. Something that would bridge that gap in Spain to match its community partners and better position itself internationally.

The more tiempo take companies to start the digital transformation will mean lower profits and less competitiveness, since competition can get ahead of you.