AS physical products today take on exponentially more complexity in the age of IoT, 3D printing and mass customization, technology has emerged that can unlock vast economic potential by virtualizing every phase of the manufactured-product lifecycle—from initial design concepts and prototypes to functioning “smart” products to complex installed systems out in the field. As physical products become more enmeshed with software, sensors and their intrinsic data streams, their capabilities are expanding at a nonlinear pace.
In essence, manufacturing today is no longer simply about making physical products but about finding new ways to create and capture value for the end user. Changes in consumer demand, the nature of products, the economics of production and the economics of the value chain have led to major shifts in the way goods are designed, produced and sold. Increasingly customers who are spoilt for choice are demanding personalisation and customisation, almost blurring the line between consumer and creator.
The changes come on multiple fronts, one being advanced manufacturing – in the form of additive manufacturing. Advanced materials, smart, automated machines and other technologies are ushering in a new age of physical production. At the same time, increased connectivity and ever more sophisticated data-gathering and analytics capabilities enabled by the Internet of Things (IoT) have led to a shift toward an information-based economy.
As technology continues to advance exponentially, barriers to entry, commercialisation and learning are eroding. New market entrants with access to new tools can operate at a much smaller scale, enabling them to create offerings once the sole province of major incumbents.
While large-scale production will always dominate some segments of the value chain, innovative manufacturing models – distributed small-scale local manufacturing, loosely coupled manufacturing ecosystems, and agile manufacturing – are arising to take advantage of these new opportunities. Manufacturers are waking up to possibilities such as these and, in the process, starting to transform the way they do business.
Manufacturers who want to compete successfully on a global scale should be increasing their investment in IoT infrastructure or they will run the risk of becoming redundant in an increasingly global village. There are precautionary measures to consider for companies implementing or planning to implement Industry 4.0 practices. Most of the challenges relate to the management and integration of Information Technology (IT) and Operational Technology (OT).
While some have an organisation-level impact, other challenges exist at the broader, ecosystem level. These challenges are heightened as connected technologies evolve at a rapid pace.
Effective use of information can, in turn, impact key business objectives such as business growth and business operations, and transformation can be possible across the value chain and its various stakeholders. The path to realisation of Industry 4.0 involves a clear understanding of the ways in which the physical can inform the digital, and vice versa.
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