By Pramiti Vaidya, Assistant Manager (Institutional Business) at Kotak Asset Management Company
Industry 4.0 technology is revolutionising the way companies manufacture and distribute products. Past industrial revolutions have brought about changes in the modes of production which have helped improve quality and efficiency. The first industrial revolution helped to enable mass production by using water and steam power instead of using human and animal power. The second industrial revolution introduced assembly lines, use of oil, gas and electricity, which enhanced the degree of mass production and manufacturing processes. The third revolution added technology driven programmable controllers, which helped to automate and share data easily. The fourth revolution involves the employment of automated technologies, which aid early and predictive intervention to address failures and allow increased responsiveness.
How is Industry 4.0 revolutionising the way companies manufacture products?
Manufacturers are integrating new technology which includes Cloud computing, Artificial Intelligence, IoT and Machine learning into their production facilities. These technologies have advanced sensors, efficiency enhancing software and robotics which helps analyse data points and provides scope for better decision making. The emergence of increased demand for digital technologies has led to increased automation.
Using latest and high-tech IoT devices in smart factories would eventually lead to higher productivity and improved quality of data. Manual inspection model replacement with AI powered visual insights also would reduce errors, save money and time.
What technologies are driving Industry 4.0?
Internet of things (IoT): IoT is a key component of smart factories. Due to technological advancement, we see that machines nowadays are equipped with sensors that feature an IP address, which allows the machines to connect with the web enabled devices, this helps in collecting, analysing and interpreting large amounts of valuable data.
Cloud Computing: Cloud computing takes into account full realisation of smart manufacturing demand connectivity and integration of engineering, supply chain, production, sales and distribution. Cloud helps to store and analyse large amounts of data efficiently and effectively. Large organisations can hereby store their data without locker services, and buy storage space from cloud services.
AI and Machine Learning: AI is a computer program which enables the machine to simulate human behaviour like learning, planning, reasoning and problem solving. Machine learning helps to understand the past data so that accurate output can be provided. AI and machine learning mainly allow the manufacturing enterprises to take advantage of the volume of data. This can also help in predictive maintenance based on the machine learning algorithms which eventually would lead to increased productivity.
Cybersecurity: Most of the companies do not consider the importance of cyber security in this world of technological enhancement. It is essential to consider cybersecurity approach that encompasses IT and OT equipment, this could expose all the new entry paths for malicious attacks and malware.
Digital twins: Digital twins have allowed manufacturers to create virtual replicas of processes and supply chain factories which reflect a physical object. These sensors are fitted at various relevant areas of functionality. Sensors produce data of different aspects of performance of the physical object. Digital twinning is very useful for manufacturers since they can design new products, improve efficiency and minimise downtime.
Edge computing: Edge computing is a distributed computing framework which brings the enterprise closer to the data source. This data proximity helps to deliver strong business benefits, providing faster insights, efficiency and improved response time. Edge computing minimises the latency time, from when the data is produced to the time when the response is needed. Edge computing helps the data to stay near its source and helps reduce risks.
Augmented reality & Virtual reality: Augmented reality creates an enhanced version of the real world in front of an individual by adding a coat of digital information on it. Virtual reality consists of use of computer technology to create a simulated environment.
Hybrid multicloud IT architecture: Hybrid multicloud is when a company has two or more public and private clouds to manage the computing workload. This gives them the ability to optimise the workload across all the clouds, and proves to be cost effective. The major benefit of adopting multi cloud strategy is avoiding vendor lock-in, this leads to better capitalisation of different vendors to address their specific business challenges. A well-planned multi-cloud strategy would help to scale up cloud resources in future when required.
Digital transformation Trends:
The increasingly competitive marketplace has made it necessary for cut throat business and implementation of latest digital technology, this is caused mainly due to growth opportunities. With high-profile data breach scandals making headlines, new regulatory standards like GDPR are also providing a reason for organisations to transform. 91% of businesses are engaged in some form of digital initiative, and 87% of senior business leaders consider digitalisation a priority.
The global digital transformation market is expected to grow to $1009.8 billion by 2025 from $469.8 billion in 2020, at a CAGR of 16.5% during the said period. The direct digital transformation investment is expected to reach $7 trillion with a CAGR of 18% from 2020 to 2023, since companies are investing for technological enhancement. The latest market trends indicate that the digital transformation market is projected to grow at 19.1%.
According to the World Economic Forum, $100 trillion is going to be added to the world economy through digital transformation by 2025. Global investment in digital transformation is expected to almost double from $1.8 trillion in 2022 to $2.8 trillion in 2025.
Healthcare
The global digital health market is expected to grow to over $500 billion by 2025. The global virtual and augmented reality in healthcare market is expected to reach $5.1 billion by 2025. During the pandemic, there was a 15% increase in the use of digital tools for health support by consumers and 37% consumers were more likely to use telehealth in the future.
Retail
63% of the retail expects to spend more on business intelligence/ data analytics, and 35% on AI. The main drivers of digital transformation in retail are strengthened competitiveness, efficiency and reduced costs, and strengthened customer relationships and increased revenue. According to latest reports, 77% of the retailers will have AI in place for the ease of functioning of the business, and 87% indicate the use of robotics for warehousing picking.
Manufacturing
Digital transformation in manufacturing market is expected to reach $767 billion by 2026. Almost 81% of manufacturers are ready to invest in digital transformation to boost the overall productivity. IoT spending worldwide in discrete manufacturing has increased 4 times since 2015, to $40 billion.
Your passion for this subject is admirable.
Hi , I do believe this is an excellent blog. I stumbled upon it on Yahoo , i will come back once again. Money and freedom is the best way to change, may you be rich and help other people.