The concept of Industry 4.0 covers the digitization of the manufacturing sector and the advent of the Internet of Things, combined with artificial intelligence and data science. Properly implemented, Industry 4.0 will enable manufacturers to increase efficiency while reducing costs.
This revolution is hardly unexpected, given that there will be thirty billion connected devices on the planet by 2020, and that the amount of data will grow exponentially as a result.
Determining the best way to identify, collect and interpret this increased volume of data will enable manufacturers to better understand their markets and customers, and win market share.
Megatrend n°1 - Demographic upheaval
Growing or shrinking demographics in different countries, a burgeoning middle class, consumer markets that are shifting from West to East, and an aging population providing less manpower, are all factors that have a direct impact on the manufacturing sector. This is where new technologies come into their own as a natural response to this need for adaptation: not only do they continue to facilitate collaboration, they also help to attract a savvy Generation Y. This generation is expected to make up 75 % of the global workforce by 2025, and to play an important role in a manufacturing sector that will continue to evolve.
Megatrend n°2 - The globalization of future markets
As companies expand their activities around the globe, export volumes are set to triple by 2030. It is even set to quadruple in emerging and developing countries, and bilateral and regional trade agreements are expected to expand borders even further. The share of GDP generated by the BRICs (Brazil, Russia, India and China) is set to grow. Countries in the MINT (Mexico, Indonesia, Nigeria and Turkey) and MIST (Mexico, Indonesia, South Korea and Turkey) subgroups are well placed to outperform developed countries. Technology will always play a key role in globalization. Not only through e-commerce and the emergence of new markets, but also through enterprise resource planning (ERP) systems that manage cross-border trade operations and multinational manufacturing processes.
Megatrend n°3 - Resource scarcity
Energy consumption and requirements are increasing, and with them our need for resources. By 2030, the bulk of essential raw materials will probably come from China, and certainly from countries outside the USA and Europe. This situation could potentially be tempered by innovative recycling technologies and technological platforms that streamline processes to ease the transition.
Megatrend n°4 - The knowledge gap and the generation gap
The talent pool will shrink, and manufacturers will suffer. There will be a shortage of qualified personnel for the jobs to come. The pool of available workers will undoubtedly come from developing countries, where the percentage of the population with tertiary qualifications exceeds that of developed countries. The increasingly mobile workforce will continue to present a challenge to employers, perhaps leading them into a global struggle to recruit skilled employees. To attract this new generation of employees, employers will need to foster mobility, offer a sophisticated user experience and propose more flexible ways of organizing work than ever before.
These four megatrends, combined with the new converging technologies, will force a transformation on manufacturers. This is a tremendous opportunity... but seizing it requires the use of emerging information technologies (social networks, mobility, analytics and Cloud), as well as operational technologies (sensors, machine-to-machine communication, additive manufacturing and robotics). It is therefore essential for manufacturers to determine whether their ERP environment is ready to accompany them towards Industry 4.0. Taking a critical look at their current IT environment is the first step in understanding how ready - or late - their company is for Industry 4.0.
by Hélène Forge, Senior territory manager Western Europe at Epicor Software