Is Industry 4.0 the 4th Industrial Revolution?
The etymology of the word manufacturing comes from the latin manu + factura and literally means “a working made by hand”, a human hand. As language evolves with the events of history and changes in the society, the meaning of manufacturing is getting reshaped by the new technologies that influence our way of “make a work”.
The first industrial revolution started in Britain around the 1760s, kicked off by the introduction of the steam engine and the mechanical loom. The second industrial revolution happened in the USA, around the 1840s, thanks to the invention of electricity and transfer lines. Following the progress, Henry Ford invented the auto-mobile that changed people life and the world. The mass production implemented for Ford’s Model T, through simplification and standardization of repetitive tasks, opened the door for a new system of production called Fordism. Ford executive vice president, Delmar S. Harder, invented in the 40s the word automation: autom-atic oper-ation; where automatic means “working by itself”.
The third industrial revolution started when the IT and Electronic technologies impacted our lives with the birth of computer around the 1950s, again in the USA. In the 70s the Personal Computer (PC), brought new systems and a new working paradigm that spread into all companies through the 80s and 90s. Internet made the rest. Another invention that has impacted our life is the mobile phone and, especially, its evolution into the Smart Phone. Where Smart is synonym of Intelligent: from Latin from inter- "between" + legere "choose, pick out, read".
The evolution of Computing Science and Internet, combined with usable things, has contributed to create a new environment where users (people, animals or objects) can transfer and share information without the need of human-to-human or human-to-computer interaction. This new environment is called Internet of Things (IoT).
It seems now, that we must be ready to experience a 4th Industrial Revolution leaded by the integration of IoT, Cloud Computing, Big Data, Robotics, 3D Printing and Augmented Reality into the factory workshop; plus, its further integration to the whole organization through a management software.
This new paradigm is called Industry 4.0 and aims to create an Intelligent Manufacturing System and a Smart Factory. The base for this new production philosophy is the Cyber Physical System, composed by devices with embedded “intelligence”. Together, these devices create intelligent systems, able to coordinate themselves without the human intervention. Cyber physical systems allow higher efficiency and personalisation of the final products and, of course, less people involved in the manufacturing. No hands will be necessary, for making the work.
The raising labor costs in China and the needs for a technology push - to support a better quality production and international expansion of Chinese companies - has made the Automation of manufacturing systems an urgent priority expressed by the policy “China 2025”, which aims for China to become a leader in technology by 2025. This priority has been reminded by Xi Jinping when releasing the main core objective to be included in the next China 13th fifth years plan promoting an innovation-driven development:
“The “Made in China 2025” initiative will advance the transformation and upgrading of the industrial manufacturing industry so as to make China a competitive manufacturing power; “Internet Plus” action plan will promote the in-depth application of information technology to industries, and new technologies, new concepts and new modes will crop up; the urbanization objectives will unleash more labor resources and activate broader market space”.
This new paradigm is not limited to China but a global tendency. It will inevitably leave some people out of the market because “obsolete” workers and will open new opportunities and create new profiles necessary for the new factory environment: programmers, data scientists, automation engineers, managers able to use data analytic tools and, more in general, specialized workforce. Being well know that attract real talent is quite a hard task in China, finding new profiles that even do not exist in other markets and that require experience and knowledge about an ideal factory environment, seems like almost impossible. Education and training here has a key role and, of course, this situation brings new opportunities to the foreign talent, especially in those positions where critical thinking and creative analysis are requested. These lasts, are two of the main weaknesses of the present Chinese education system.
As always, when it comes to change, the organization, employees and society face some resistance and questions. Do those working in the 80s still remember when the first PC arrived into the company? Some of the employees preferred to work with established paper-based methods. One research has demonstrated that around 15% of the employees in Swiss companies had resisted in using PC on the job by 1987. Internet of things and Smart Factory will undoubtedly have an important impact in the company culture and management culture all over the world similar to the advent of the PC, including in China.
Organizations have to recruit and train the workforce in order to keep employees up to date with the technological advancements. Universities have to equip graduates with the right set of skills, providing interdisciplinary courses between electronics, IT, automation, mechanical engineering and manufacturing engineering. Many Chinese Universities are already actives with International Exchange Programs but a lot still has to be done to create a real base of talents to support this industrial upgrade. This situation is not only a fact in the Chinese market but will be a real challenge worldwide. Factory automation is already a reality but Smart Factories are a future goal and a vision and there is no real field work experience yet.
Companies would need to re-think about the HR Management and Development as a key strategic function for the company and provide ‘executive courses’ for the manufacturing workforce. These courses should revolve around new technologies and their impact on the company. Last but not least, for a real success of this new paradigm, workers have to be involved in the design of the final cyber physical system of their own company. Technology has to be adapted to the final – real - user, not vice versa.
It is true that this change in the production system requires a huge initial investment and only big companies have the financial capability to face it. Thus, let’s remind again about the advent of the PC. Costs will get down and, sooner or later, all companies will move in this direction if they don’t want to go out of market. SMEs, from one side, should look inside their organization and see what is missing now that can be necessary in the HR department to start implementing a change-oriented culture and, from the other, start saving some financial resources. With change, always comes opportunity.
Managing Partner at Asecorp China