Is IoT technology creating the Fourth Industrial Revolution?

03/04/20184 Minute Read

In recent years IoT technology in the manufacturing industry has been a “dark horse,” quietly evolving into a revolution when we weren’t looking—or was it happening when we were too busy looking at our mobile devices?

In a world where hundredths of seconds affect global economies, technology has become integral to our everyday lives. The manufacturing industry, in particular, has experienced significant innovations, and as part of those innovations, IoT tech offers industries the tools they need to be better, faster, stronger, and more profitable.

IoT technology = efficiency

When examining how IoT boosts manufacturing across industries, substantial evidence indicates it improves quality, reduces costs, minimises risk, and provides greater opportunities for product customisation. This revolution is so significant some have referred to it as the “Fourth Industrial Revolution.”

Just consider how today’s high-tech, factory-floor workers can see 3D blueprints as hologram overlays on machines they’re constructing or repairing. This science fiction is becoming science fact, and it’s all thanks to IoT. We’re bound to see more of it, too, given IoT tech is constantly boosting efficiency throughout organisations across the globe.

Remember: It’s all about the data

Manufacturing experts have long had obsessions with quality and efficiency, enabled by reams of data—especially when the slightest manufacturing error can result in thousands—or even millions—of dollars wasted if not quickly rectified. But, as Charles Horth points out, even really great technology-assisted, quality-control processes are still relatively “dumb” manufacturing. If processes need to be shut down within 15 minutes of starting manufacturing, this can waste a lot of costly time and resources.

What’s the secret to faster, smarter, and more precise manufacturing? It’s in the data. IoT technology produces massive, fast-moving streams of data, which is often integrated into manufacturing plant equipment and logistics. These IoT manufacturing-enabled tools allow skilled technicians to map processes from order to delivery; collecting, measuring, and controlling data for customisation, ordering, and quality—without one iota of inefficiency.

IoT plays inventory big brother

In McKinsey’s 2013 interview, Markus Löffler said, “Most companies think of physical flows—meaning the flow of material components through the supply chain—as separate from information flows and then consider how and where to coordinate and synchronise them.”

Traditionally, manufacturing plants have used archaic enterprise resources planning (ERP) software to track materials and determine what items need to be replenished, on a just-in-time basis. Inventory and product are one process, and tracking technology operates as an entirely disparate system. Although, this is gradually changing as IoT technology sensors are integrated into the more processes and equipment.

Now, some cutting-edge IoT manufacturers in retail are tackling the annual $49 billion loss in disappearing inventory, with RFID technology. While a great deal of this occurs due to employee fraud and shoplifting, there’s a number of points along an inventory’s journey where it can disappear. The impact of RFID, a relatively simple use of IoT tech, is already measurable. For major US brand, American Apparel, it took just four and a half months to redeem its initial investment in RFID and IoT tech, tracking their products from factory to storefront.

Looking toward the future, the integration of product and process will become increasingly integrated. Instead of RFID tags on each individual item that allow logistics centres to track items, the product itself could contain the information. Siegfried Dais, chairman of Robert Bosch GmbH, explained to McKinsey that the materials used for additive manufacturing of a product could contain information on product design, manufacturing processes, and customer data. The insight provided by IoT integration could mean a future where quality-control processes are guided by the product’s ability to self-detect deviations from normal processes—allowing for manufacturing processes with zero, or little, human intervention.

Leverage large-scale personalisation and customisation

One of the greatest gifts big data technology has given the human race is personalisation and customisation on another level. Even though you’re one of millions who use Netflix to unwind after work, their algorithms provide you personalised recommendations; and you’ve got to love hilarious algorithm fails, too.

Big data is also the reason your Spotify account understands your preference for twangy political bluegrass jams better than you do. The first step is acceptance. Today’s consumer packaged goods (CPG) organisations are rising to meet customer demands for personalisation in everything—from customised food products to clothes tailored to your exact measurements.

Think of Coke’s personalised marketing campaign, enabled by HP Indigo digital presses, where cans had names on them as an early indicator of customisation at scale. The factory of the future will allow brands to communicate directly to manufacturers about demands for customised products, which will more likely be limited runs of specific products. Product specifications will be automatically translated into specific details on the product, quality standards, schedule, and an optimised cost per item. The machines will get to work, and the customer will have their limited-run product ready for distribution at your local grocery store.

Customers can and will get excited about how IoT boosts manufacturing across industries. Imagine a world where you could think of the strangest idea for a product ever—maybe a cucumber jalapeno and vanilla soda—then hop on Amazon, place an order made to your custom specs, and have it delivered by drone to your front door. It’s a far-off idea that even The Jetsons couldn’t have dreamed of, but it’s becoming a possibility.

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