The industrial revolution began in Great Britain and advanced the rest of the world growing SMEs in to large organisations. Nowadays, the trend of automation and data exchange in manufacturing technologies includes cyber-physical systems, the Internet of Things, cloud computing and cognitive computing. The latest industrial revolution is Industry 4.0., a term coined by German economist Klaus Schwab in 2015. The basic principle of Industry 4.0 is that by connecting machines, work pieces and systems, businesses are creating intelligent networks along the entire value chain that can control each other autonomously. It is just beginning to impact SMEs in Asia.
A recent survey by McKinsey’s of 300 manufacturing leaders found that nine out of ten believe Industry 4.0 will alter their operational effectiveness yet only 48% of manufacturers think they are ready for Industry 4.0. Executives in Singapore expressed two view points about this; some are frustrated by the difficulty of envisioning how their companies can use Industry 4.0, others about putting their ideas into practice. When McKinsey surveyed manufacturing experts in Germany, Japan, and the United States last year, just 16% said their companies had an Industry 4.0 strategy in place. Only 40% reported good progress adopting the technologies of Industry 4.0; big data and connectivity, analytics, artificial intelligence, advanced interactions between humans and machines, and new production methods such as 3-D printing.
“The possibilities associated with Industry 4.0 truly come to life when one stands alongside an assembly line equipped with the latest digital manufacturing equipment, use computers and tablets to view the data it generates, and adjust production variables while witnessing the immediate effects on performance,” said one SME owner adding, “I’ve observed that such an experience is usually eye-opening and inspiring for participants, no matter what industry or business they are in.” Executives and employees then have to put their ideas into practice at SMEs and production facilities effectively, so SMEs now need to train their workers in digital fields, from data analysis to robotics.
The Digital Capability Center (DCC) recently opened in Singapore. This is a facility where business leaders from Singapore and Southeast Asia can learn how to transform their production operations by using advanced digital technologies. The Singapore DCC simulates a “factory of the future,” modeled on an 8,000-employee gearbox manufacturer with $2 billion in revenue. Visitors to the DCC can touch and try Industry 4.0 applications for themselves to gain a realistic understanding of how these technologies work and what they can do for your business. By bringing advanced technology together with practical instructions, the Singapore DCC offers SMEs in the region a place to discover possibilities for applying Industry 4.0 at their facilities, develop the faculties to realise those possibilities and improve their competitiveness and performance.
China has long been recognized as the manufacturing hub of the world with many Western corporations having migrated their manufacturing activities there to lower their labor costs. The IIoT market is set to reach US$300 billion worldwide with an 8% growth rate between 2014 and 2020 and SMEs in Asia will be a strong driving force for the Industrial IoT market (IIoT). Startups involved in IoT have found a thriving ecosystem in Shenzhen. This ecosystem enables them to refine ideas, create prototypes and manufacture their products at lower costs.
Flextronics is one of the pioneers of Industrial IoT. They began incubating an intrapreneurial IIoT project ‘Elementum’ in 2012. “We were inspired by cloud companies such as Salesforce and Workday, a startup managing HR and financial data in the cloud, which is now valued more than $15bn. Supply chain and logistics are a bigger industry, so we thought that if we managed to apply the same combination of cloud-based software and fast execution, results could be huge,” said one manufacturing expert.
Authorities in India, keen not to get left behind, launched a ‘Make in India’ initiative for manufacturers involving the Industrial IoT revolution. Indian factories have borne some notable startups like Altizon, Entrib and Covacsis Technologies that are playing a major role in the integrated factory ecosystem.
Notably, Bosch GmbH CEO Volkmar Denner announced an Industry 4.0 revolution within the company. He defines Industry 4.0 as the use of networks and devices in factories with zero or little human intervention in manufacturing products. Bosch intends to transform its 250 factories into smart factories, including those in India.
The Internet of Things Revolution harkens the potential to empower and connect millions in rural areas. In India now, many Original Equipment Manufacturers (OEMs) have up to 40% of plant work done using robotics. One Indian manufacturing expert commented, “It is highly likely that the world of production will become more and more networked until everything is interlinked with everything else”. Another development is that the complexity of production and supplier networks will grow enormously. Networks and processes have so far been limited to an individual factory but with Industry 4.0 the boundaries of individual factories will no longer exist, they will be lifted in order to interconnect multiple factories across different geographical regions.
There are also significant differences between a typical traditional factory and an Industry 4.0 factory; in the current industry environment, providing high-end quality services and products at low cost is the key to profits. Various data sources are available to provide valuable information about different aspects of the factory and are utilized to understand current operating conditions and detect faults. In an Industry 4.0 factory, in addition to condition monitoring and fault diagnosis, components and systems are able to gain self-awareness and self-predictiveness, which provides management with more insight on the status of the factory.
Smart SME owners in Asia need to get ready for the next revolution, Industry 4.0. There are already a number of places and ways you can learn about developments in machines, systems and networks that can help your SME become more profitable and more competitive.