How industry 4.0 will boost SMEs

Industry 4.0
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In the recent years, the advanced reached by the communication and information technologies have led to the fourth industrial revolution (I4.0). Within I4.0, the factories will get equipped with machines with improved connectivity (wire and wireless) and more sensors, to capture the data from the field and process it for more detailed analysis. These analyses will take a local and global approach not only to improve the productive and the performance of the stations but also entire lines and factories. Furthermore, the connectivity advances will enable the interaction between the machines to share information and run complex algorithms to help the decisions making and conduct reconfiguration and optimization tasks. The whole process will improve the human intervention in the manufacturing process, based in the collaboration with the machines effectively reducing the chances of error.

Manufacturing line interacting humans with machines

Industry 4.0 will be not limit to the connectivity and data flow applications into the factories digital transformation, the concept is also extended these capabilities outside the manufacturing unit. Decision making related to raw materials, purchase of spare parts and machines will benefit with the use of cloud computing and artificial intelligence algorithms. Thus, improving the logistic and traceability of the products and costumers’ services.

Data and connectivity are the two most fundamental parts of industry 4.0. Understanding this is essential while talks about adopting technology in I4.0, because it is not a technology in itself. Therefore, implementing I4.0 without a business strategy can be confusing and fruitless. Thus, the first step towards achieving I4.0 needs to begin with a strong strategy – what are the aspirations of the business? Does the company want to focus on reducing costs or increasing quality? Is the business comfortable with relying on technology? Can decision making power be distributed and programmed into the machines? Does the company require a plan B if the customer does not require the new product? How much can business invest in automation? [1]

Big companies have already embraced the benefits of I4.0. Offering new digital features and products or introducing analytics and other new digital services to customers are the main strategies fallow to increase revenues. In addition, the availability of real-time data enables companies to offer more personalized products and customized solutions, which usually generate significantly higher margins than mass-manufactured offerings.

However, the small and medium-sized enterprises (SMEs) sector is yet to adapt to these new technologies. Either due to the lack of funds to invest or not being able to count with trained staff or both. Therefore, SMEs might need an I4.0 implementation strategy to deal with these challenges and take out a sizeable budget depending on the degree of digitalization that the company plan to archive. SMEs can also onboard a technology partner to guide it through the different digitalization step. In this way the company will adopt easier and more affordable the digitalization process.

In a general way; either due a lack of knowledge or a lack of resources, SMEs refuse to make the leap towards digitalization. A report from Manufacturing and Engineering based on feedback from more than 1,000 SMEs and supported by Lloyds Bank, found only 29% have a strategy in place and see it as a key part of the future. 26% said Industry 4.0 and robotic automation was not practical because of a lack of infrastructure, such as 5G internet. 13% said there was a lack of financial backing to invest [2].

SMEs are not alone in these times of changes. Many governments and organizations have launched national founds and platforms to facilitate the uptake of these new technologies. An example of this are the projects Industry4SME, CM4Smart or SMARTY that allow to facilitate the adoption and implementation process.

During the last months, I4.0 roadmap has been firming up their position as the vision to be followed to build the factory of the future. Through I4.0 factories should improve the quality of the final product, reduce the manufacturing time, minimize wastage, and even enhance the worth of the complete value chain. Moreover, it will allow them to face the growing demand for the personalization of mass-produced products. Industry 4.0 is the next step in the evolution of the industrial world. It is the new tool that will allow SMEs to reach new levels of productivity, increasing their capabilities for competitiveness in the market.

In future posts, we will be continue writing about technology and business trends for enterprises. Furthermore, we recommend consulting the following literature to continue your digital transformation journey:

The objective of this blog is to provide a personal vision of how digital transformation trends will be impacting in our daily activities, businesses and lifestyle.





By Alberto Villalonga twitterlinkedin2

Researcher, his research interest includes machine learning, Industry 4.0, Internet of things, and cyber-physical systems.

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