The Technologies Powering the Fourth Industrial Revolution

July 2019

Yoorhim Choi, Manager – Fixed Assets – Valuation & Business Analytics, BDO USA, LLP

The confluence of new technologies has ushered in a fourth industrial revolution, also known as Industry 4.0, which is calling into question the definition of manufacturing. These changes are blurring the lines between the tangible and intangible, digital and physical, and product and service. Therefore, it is more important than ever for manufacturers to recognize and identify trends that can help their organizations remain competitive in the market. While most manufacturers (54 percent) have developed or are developing an Industry 4.0 strategy, just 5 percent say they’ve reached the implementation stage, according to BDO’s Industry 4.0 Middle Market Benchmarking Survey. These are some of the technologies behind these seismic shifts in the industry―and how they are redefining how manufacturers derive and deliver value.

Big Data, Predictive Analytics and Machine Learning
Since their development, big data, sensors, predictive analytics and machine learning have profoundly impacted the manufacturing sector. Devices that combine sensor technology with machine learning capabilities are being incorporated to existing equipment to enhance performance and productivity. These sensors, in the form of extensive networks, collect large quantities of data pertaining to processes, machine condition and external environment. With the addition of the Internet of Things (IoT) and predictive analytics, organizations can now automatically harness large arrays of data optimizing their operations in a more cost-efficient manner.

These ‘smart’ machines―those enabled by IoT, big data and analytics―possess the ability to perform repetitive tasks at high speeds and highly accurately to prevent errors. The combination of the collected data, plus the power of analytics, can help predict when a machine needs to be repaired before a breakdown occurs―or more quickly identify the issue if it does―reducing manual human labor, excessive maintenance costs and unnecessary downtime.  Over time, these machines begin to learn through application-specific algorithms improving output performance and providing maintenance notifications.

As industries face more stringent environmental regulations, some are leveraging data utilization to assist with compliance. With increased adoption of these technologies to build more precise, higher quality manufacturing practices, companies are seeing lower operational costs, less downtime and increased safety on factory floors.
 
Blockchain Technology
Blockchain is a secure distributed ledger technology that allows for a new approach to recording transactional data. The database is decentralized among multiple participants and can process and authenticate their transactions, creating a chain of transactional records that cannot be altered to provide transparent and secure links across an entire supply chain.

Blockchain has huge potential for supply chain management by streamlining the management of invoices and payments amongst individuals and entities. By integrating their supply chains with blockchain, manufacturers can track goods from the factory floor to cargo ships, secondary production facilities and beyond. Manufacturers can also integrate their data-capturing systems with blockchain, and input data collected from machinery anywhere in the world. By incorporating predictive analytics, manufacturers can use the data collected from machinery to create a global view of their operational performance, proactively identify repairs or upgrades and discover which of their methods are most efficient and should be replicated.

Additionally, blockchain’s immutability can improve traceability and accuracy within the supply chain, allowing manufacturers to operate within a tighter schedule while ensuring overall product quality.

According to Gartner Research, the business value-add of blockchain is predicted to grow to more than $175 billion over the next 6 years, eventually exceeding $3 trillion by 2030.

3D Printing
While 3D printing has been around for some time, wider adoption has been inhibited by limited material and prohibitive costs. However, technological advances and new cost efficiencies are now allowing more companies to access the benefits of this manufacturing tool.

In recent years, much effort has been made to improve on and develop systems that allow 3D printing to process a wider range of materials that are more aligned with current manufacturing needs. These include new metals, thermoplastics and even natural and sustainable materials. For organizations looking for multi-material applications, 3D technology is advancing in ways that can combine a diverse range of materials into a single process flow―minimizing some post-assembly processes of production while reducing cost efficiencies.

3D printing can also reduce assembly time and waste in workflows that involve tools, molds, jigs and fixtures. With injection molding, tooling can take as much as 16 weeks. However, a 3D printed part can be made within the hour, even minutes, allowing immediate start to production and shortening design and production cycles compared to traditional methods. 3D printing can also speed the process of prototyping, especially in production of on-demand spare parts.

Augmented (Reality) Workforce
As an aging employee base with years of experience leaves the workforce, the manufacturing industry is facing a growing demand to incorporate effective training for the next generation of workers taking their place. With the complexity of machines and manufacturing equipment on the rise, it’s critical that the skilled workforce of the future has access to adequate education and training to be successful.

One way to address this issue is through Augmented Reality (AR), which allows workers at factories to connect in real-time with technical experts when faced with issues, reducing errors and equipment downtime. 
 
Workers can eliminate the amount of time spent pouring through extensive paperwork instructions or user manuals by providing on-demand access to comprehensive content associated with a specific machine via AR. This can be especially helpful with precision-based machinery to reduce the amount of time a technician needs to interpret drawings and instructions. When specialized equipment becomes inoperable, AR can provide immediate assistance by connecting with available sources that can quickly and accurately diagnose a problem and provide resources to fix the equipment. 
 
By incorporating technology to help manage their operational assets, companies can focus more of their resources to product innovation and other strategic priorities. However, these technologies are only one piece of the puzzle. They must be part of a broader Industry 4.0 strategy that embraces digitization across their operations and within their own organizations, with the evolving needs of the customer at the center of everything they do.
 
Those that embrace the fourth industrial revolution will reap the rewards, while those that don’t will ultimately fall behind.