Beyond Industry 4.0

Richard Howells

Over the past few years, we’ve seen Industry 4.0 technologies address key challenges facing manufacturers—from extreme variability in supply, demand, and design to emerging markets of one and the growing need for rapid innovation.

A new whitepaper, Industry 4.0: What’s Next, looks ahead to Industry 5.0, where further restructuring of product development and production will redefine not only manufacturing processes, but also what a product is and the value it provides.

Industry 4.0 today

Leveraging the principles of Industry 4.0 and its enabling technologies to automate, integrate, and optimize manufacturing processes, companies have cut cycle times, improved product quality, and increased efficiency across operations—while manufacturing highly customized products on a global scale.

What makes all this possible is the way Industry 4.0 has disrupted and deepened relationships across manufacturers, customers, and suppliers.

Organizations are now adding sensors and microchips to tools, machines, and products—making “smart” things able to receive and share real-time information. The data they generate is being merged with enterprise data and product flows across internal borders. This enables companies to decrease cycle times, improve product quality, and boost factory efficiency.

For example, companies can:

  • Operationalize mass personalization. Manufacturers are automating production using advanced digital technologies on the shop floor to quickly change configurations and adapt to the needs of specific customers.
  • Perform condition-based maintenance. Organization can now perform maintenance not on a fixed schedule, but according to actual operational conditions, usage levels, and predictive insights that prevent downtime.
  • Improve inline quality control. Companies can now identify deteriorating quality in time to “save” the product and minimize scrap costs.
  • Identify patterns and root causes for customer complaints. Businesses can pinpoint issues such as product color deviations and surface defects—and then trace their relationship to process parameters, maintenance, and raw material suppliers.

The big question is, what’s next?

Taking Industry 4.0 to the next level

The above examples—which focus on optimizing what happens within the four walls of a manufacturer—represent only the first stage of Industry 4.0. Soon everything will be connected: every asset, material, supplier, worker, warehouse, delivery truck, stakeholder, and customer.

At the same time, products are rapidly becoming more intelligent and even interactive, which creates more opportunities to apply emerging technologies in ways only imaginable before.

Three developments are pushing Industry 4.0 to the next level:

  1. Intelligent digital products: Companies can now develop intelligent, connected, and self-aware products capable of sharing information about wear and tear, usage level, and storage conditions—as well as data on the health, location, or even mood of the customer.
  1. Emerging technologies: New technologies are reaching a tipping point in terms of readiness and availability. Some of these include cognitive computing, 3D printing, augmented reality, blockchain, machine learning, artificial intelligence, voice-controlled user interfaces, and robotics.
  1. Shifts in customer attitudes, behaviors, and expectations: From wearables such as networked running shoes to connected cars and industrial products, the Internet of Things is positioned to give companies and organizations even more opportunities to collect data and use it to improve customer outcomes.

Looking ahead: Industry 5.0—platforms for value creation

These developments are making it possible to bring the customer into the product value chain as an indispensable “user contributor.”

Looking ahead to Industry 5.0, we can expect the further restructuring of product development and production in ways that will redefine not only manufacturing processes but also what a product is and the value it provides to customers.

As more products incorporate digital technologies, they will move from being a bundle of functionality and become platforms for value creation—both for the user and the maker of products.

We will begin to see tightly integrated ecosystems of companies in different industries working together to provide distinctive, significant value to customers. This will be achieved through the creation and delivery of more complete offerings, thanks to:

  • The pervasiveness and exponential growth of data and the software that uses it
  • Increased standardization of application interfaces, integration points, and automation technologies, which reduce friction and simplify the creation of mashups

Looking ahead, we expect Industry 5.0 will create new and more agile offerings centered around customers’ demands, likes, needs, and preferences.

As more products become platforms for innovation and value creation, opportunities will open for companies to become platform adopters that drive innovation in their own right. Because as we’ve witnessed time and again, no single company can own innovation on platforms.

To learn more about Industry 4.0 and what’s next, download the whitepaper here.

About Richard Howells

Richard Howells is a Vice President at SAP responsible for the positioning, messaging, AR , PR and go-to market activities for the SAP Supply Chain solutions.