New Manufacturing Ecosystems Created By Industry 4.0

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Manufacturing Ecosystem Industry 4.0

If you didn’t sleep through science class, you may recall learning that an ecosystem is a community of living organisms called producers, consumers and decomposers. These components are linked together through nutrient cycles and energy flows. Ecosystems in business are similar. They’re comprised of a system or network of interconnecting and interacting parts connected by nutrient cycles (communications) and energy flows (power).

The Fourth Industrial Revolution, or Industry 4.0, has occurred because of the integration of IoT with manufacturing and distribution systems. There is a growing consensus that this integration has helped to create new ecosystems for manufacturing and distribution.

Manufacturing Systems and Supply Chains Are Getting Smarter

As we discussed in our last blog, manufacturing systems are combining not just the components of equipment in the assembly line but also sensors, smart materials and most importantly a communication loop that acts in real time, can predict changes and then plan for them.

Supply chains and distribution systems utilize digital connectivity that includes not just customers but all aspects of manufacturing stakeholders from suppliers and logistics companies to manufacturers and distributors.

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Understanding the Information Value Loop

The Industry 4.0 ecosystem runs on data, which runs through a continuous cycle of communication known as the Information Value Loop.

The Information Value Loop, (IVL) as defined by Deloitte in their white paper Industry 4.0, manufacturing ecosystems–Exploring the World of Connected Enterprise, is simple. Sensors will monitor an assembly line and its equipment to detect and create data, communicated via a network, and then subjected to set standards that will aggregate the data into meaningful information. This information is then subjected to augmented intelligence that is used to analyze and determine the appropriate response (action). The action is then sent back through the network to the equipment and the directed action is taken. For example, a sensor picks up that some equipment is failing to add materials correctly to the assembly process and the assembly line is signaled to shut down until the problem can be corrected. This is the physical-digital-physical link that we talked about in our last blog and is the backbone of the Information Value Loop.

The IVL is what keeps the manufacturing and distribution systems connected and operating. Without it, these systems are just a group of components and not an ecosystem. It’s about the ability to send and receive data in real-time allowing manufacturers to be proactive instead of reactive. It is the complete and total visibility into all aspects of manufacturing and distribution systems. This visibility helps to enable systems to run as efficiently and effectively as possible.

Manufacturers Will See Higher Productivity and Profits

These new technologies will reduce lost production time due to equipment failures and material shortages. There will also be fewer product recalls caused by manufacturing errors and product customization will be easier and cheaper. This will bring better operating performance, improved productivity, increased profits and a strong position for future growth.

While some are still arguing that Industry 4.0 and IoT are just buzzwords, both manufacturing and supply chains have seen real operational improvements and value from increased connectivity. Manufacturing and supply chain companies that invest in IoT technology will experience many benefits and have the ability to not just keep up with, but to surpass their competitors.