Operations Management unit – v

Introduction of industry 4.0

The production is an integral part of any economy. As days goes on, the market is
becoming more competitive and customers are looking for latest modern products with lots
of integrated features. The productivity and quality are the crucial areas for any production
unit and to be properly maintained in the factory.

Automation is also the new aspect of production that produced the products with high
level of accuracy and robots are used now days in this regard. The modern day’s production is
becoming complex and the Industry 4.0 is going to play a pivotal role in this aspect.
Modern production technology will meet those needs in a better way than that of the
traditional manufacturing process in the factory as we used to follow for production purposes.
These technical aspects of these are regulated by cyber-Physical systems (CPS) and Industrial
Internet of Things (IoT) in industrial production systems. Connection to CPS building blocks
is an Industry 4.0 implementation plan. Anxiety blocks of embedded systems with separate
controls and advanced communication that trade and collects real-time information with the
goal of locating, tracking, optimizing and monitoring production processes. Manufacturing
execution systems (MES) and enterprise Resource Planning (ERP) are comprehensive
software based on transitioned versions. Another important part is managing large amounts of
data from processes, products and equipment. All this data is stored in cloud storage. This
database requires extensive analysis to obtain useful useful information and ultimately in
actions that lead to a flexible and continuous production process for self-preparation.
Industry 4.0 comes from Germany, first such initiative that is very helpful for any country in
the global scenario to move ahead in the competitive world.

THE INDUSTRY 4.0 – THE VARIOUS INDUSTRIAL REVOLUTIONS

The Revolution of Industry from 1.0 to 4.0
Before moving further into the Industry 4.0 how exactly the industry evolved from the 1800s
is really a tough journey. Before industrial evolution the world has encounter till date as
follows:
The First Industrial Revolution -1700- 1800 years
It happened in the late 1700s and early 1800s. At that time, the manufacturing industry
focused on manual labor by workers, animals, and humans with streamlined forms of work
performed by humans using water and steam engines and various machine tools.

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The Second Industrial Revolution
The Second Industrial Revolution of the early 20th century began with the use of steel and
electricity in factories. By using electricity, manufacturers can increase efficiency and
increase factory productivity. At this time, mass production was introduced.
The Third Industrial Revolution
This evolution started in 1950s, as the more electronic and computer-oriented technology are
incorporated in the factory. A new experience is being seen shifting from mechanical and
analog oriented technology to digital and automation-oriented machinery and technology.
The Fourth Industrial Revolution, or Industry 4.0
The fourth Industrial Revolution began decades ago as Industry 4.0. Digital technology has
begun at a new level for decades with the introduction of IoT, access to real-time data, and
cyber-physical systems. Industry 4.0 implements a more connected, comprehensive and
holistic manufacturing approach. Business owners better manage and understand all aspects
of their operations, improving productivity and processes for further improvement / growth.

The Revolution of Industry from 1.0 to 4.0

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 Smart Factory- Production System as per Industry 4.0

Fig. Smart Factory- Production System

Design Principles of Industry 4.0
The main transformation to Industry 4.0 done by design principles. The following are the
concern principles:
Interoperability:To communicate through the IoT and the internet of people, objects people
and machines are needed. This is one of the important principles.
Virtualization:CPSs that is going to create and simulate a copy virtual in nature of the real
world. It is also to monitor objects in the nearby environment. A virtual copy of everything is
put simply in that way.
Decentralization: To work independently is future of CPSs. It is going to give some for
customized products and problem solving. A more flexible production environment is created
in this way. The matter is delegated to a higher level in cases of conflicting goals or failures.
Real-Time Capability:Rear time data to be connected or store or analyze for a smart factory
and new decision according to be taken for latest findings. The internal processes are coming
under it such as machine failure in production line. The different identification can bedone by
the smart object. The real time capability can be the flexibility and optimization of the
production system.
Service-Orientation: Customer oriented must be the look out of the production. The internet
of services must connect efficiently to people and smart devices for customer’s specifications-
based product to be created.
Modularity: It should be one of the essential ability for a smart factory. A week time is
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generally required for study of the market and production change accordingly. The fast
adoption and sessional as well as market changes are the important feature of smart factories.

IT Support

Fig. IT Support

Benefits of Industry 4.0

The manufacturing processes work totallyrevolutionize because of Industry 4.0. There are
many advantages and the challenges the concern industry to face as follows:
Advantages of Industry 4.0
Optimization: Industry 4.0 focusses on optimization. The various smart devices self-
optimizes the production that results in zero-down time in production processes. This is one of
the vital aspects of high-end expensive manufacturing equipment. This will ultimately head
to profit for the industry.
Customization: As the population is looking for fast and smooth delivery in a customer-
oriented market being created because of the customization. The customer and manufacturer
gap will reduce as a result of these aspects. The process of communication will be fast without
any intermediary and this will be improved delivery process for production.
Pushing Research: The researcher in various fields will be accelerated because of Industry
4.0. A new industry will apply new skill set and requisite education and training will take place
for the concern labors.

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Challenges of Industry 4.0
Security: The IT security is one of the vital issues while implementing Industry 4.0. This
online instigation will give chances of security beaches and leak of data. The cyber theft is
also another aspect in these regards. The reputation, cause producer money is at risk. Thus,
emphasis to be given on research related to cyber security.
Capital: As this transformation will require huge investment that should be consider by the
particular industry by doing physicality study. The top-level management have to decide
whether they would go for Industry 4.0 transformation or not as it requires huge capital for
implementation the transformation.
Employment:
It's very premature to speculate on the arrival of Industry 4.0, as employees need to learn new
skills to work in the world of the latest technology. A new training series to maintain the
requirements of Industry 4.0. This can take some time to find a solution to the above problem
Privacy:
Both customers and producers need to be considered when it comes to aspects of Industry
4.0. This is an inert network industry, as such manufacturers need to collect and analyze data
due to causality. Bridging the gap between the customer and the producer is a difficult task
for both parties in the group.
Future workforce
Industry 4.0 is new to the world so regarding revenues and technological advancement is
very difficult to predict. According to estimate the potential employment of the new
workforce having new skill set is also difficult to predict. The manufacturing is advancing
technologically as Industry 4.0 but still different categories of machines are present in the
factory. The approach of industry 4.0 to be analyzed for finding out a conclusion on category
of labour requirement for the future. This will help the labours to prepare for the future trends
and develop accordingly.

DIGITALIZATION AND NETWORKED ECONOMY

The digital economy refers to a broad range of economic activities that use digitized
information and knowledge as key factors of production Digitization accelerates economic
growth and facilitates job creation: It provided a $193 billion boost to world economic output
and created 6 million jobs in 2011. Digitization's impact is not uniform across economies in
different stages of development.

The network economy is the emerging economic order within the information society.
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 The name stems from a key attribute - products and services are created and value is added
through social networks operating on large or global scales.

Increased productivity: The digital economy has increased the productivity of businesses
as they can now use technology to automate their operations and processes. Increased
competitiveness: Businesses today are able to use the internet to reach new markets and
customers

A collective term for technologies and concepts of value chain organization. Based on the
technological concepts of cyber-physical systems, the Internet of Things and the Internet of
Services, it facilitates the vision of the Smart Factory.

Within the modular structured Smart Factories of Industry 4.0, cyber-physical systems
monitor physical processes, create a virtual copy of the physical world and make
decentralized decisions.

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 INDUSTRY 4.0 - DRIVERS, ENABLERS, CHALLENGES AND BENEFITS
DRIVERS

Technology upgradation and digitalization: Low cost hardware/Intelligent machines and influx
of data can be attributed to the advancement of Industry 4.0. The rise in data volumes has led
to the coinage of the term "big data." This has caused a greater need than ever for companies
to store and gather information and, in doing so, make better use of it.

Connectivity: Fast internet and increasing use of technology such as remote database access
(RDA) and radio frequency identification (RFID) to collate and distribute information
supports the concept of the Internet of Things as a potential global digital infrastructure.

Competitive edge: The combination of the customer's human input and dynamic data analysis
and response may mean that in the future a digital ecosystem will be created whereby human
decision is augmented through algorithms which will increase the accuracy in production and
reduce the time, cost, and manpower.

KEY ENABLERS:
Business: An increase in efficiency is considered as the main driver for companies to
implement the IoT in their processes (57%), followed by predictions for cost savings (47%)
which would result from its implementation. 45% of the respondent’s state that decision

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 making is optimized when using the data gathered and analysed, while 43% support that the
flexibility of the processes is increased.

Leadership: 47% do not have the role of Chief IoT Officer in their organisation which they
should have.

Application: 63% in the production process to support the real-time process control, 47% to
gather data and make informed decisions on predictive maintenance and 43% to monitor and
control machines.
KEY CHALLENGES:

 Lack of unified leadership that makes cross-unit coordination difficult within the
company.

 Data ownership concerns when choosing third-party vendors for hosting and
operational company data.

 Lack of courage to launch the radical digitalization plan.

 Lack of in-house talent to support the development and deployment of Industry 4.0
initiatives.

 Difficulties with integrating data from various sources to enable initial connectivity.

 Lack of knowledge about technologies, vendors and IT outsourcing partners that could
help execute the core initiative.

 While there’s no “one-fits-it-all” approach to bringing an Industry 4.0 program to life,

there are several things every company can do to diminish those adoption barriers. The
first step is to clearly estimate the ROI different digital solutions can generate for your
business.

BENEFITS OF ADOPTING AN INDUSTRIAL 4.O MODEL

1. Increased Efficiency in Production and More Potential for Innovation.

2. Increase speed Response to Customer Needs, Reduced Costs and Higher Profit Margins.
3. Quality Assurance.
4. Liquid Collaboration.

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 Increased efficiency and productivity
 McKinsey estimates that switching to automated production 4.0. can boost productivity
in technical professions by 45%-55%.
 IoT assisted production has already been deployed by companies like Airbus, Cisco,
Siemens and a number of other leaders in the Industry 4.0 space.
 Human-robot teams are also emerging on the factory floor. MIT estimates that
collaboration with robots can reduce workers’ idle time by 85%.
 Australia’s Drake Trailers, a company who recently added a welding robot to its
production line, reported a 60% increase in productivity among their staff.
 Cornell Dubilier, one of the largest power capacitor manufacturers in North America,
managed to double their speed of labelling process from 125 parts an hour to 250 parts
an hour by employing a robot to work alongside the human team.
Machine downtime reductions
 Predictive maintenance in Industry 4.0 means that equipment failure will be identified
before it occurs.
 ML-powered systems can spot repetitive patterns that precede failures, notify your
teams and have them schedule an inspection. Deloitte that predictive maintenance can:
 Reduce the maintenance planning time by 20-50%.
 Diminish total maintenance costs by 5–10%.
 Increase equipment uptime and availability by 10–20%.
 MRO (Maintenance, Repair and Operations) can be largely improved with AR
(Augmented Reality), embedded in industrial IoT applications.
 AR-powered MRO has already gained traction in the aviation industry:
 Boeing reduced the time required for wiring by 25% and slashed error rates to zero.
 GE Aviation improved MRO efficiency by nearly 10%.

Improved supply/demand matching

 Cloud-based inventory management solutions enable better interactions with suppliers.

 By pairing your inventory management system with a big data analytics solution, you
can improve your demand forecasts by at least 85%.
 You can also perform real-time supply chain optimization and gain more visibility into
the possible bottlenecks, protruding your growth.