Two major paradigm shifts are happening at once, and in some ways they are crashing into each other. Industry 4.0 is the rise of smart technology and access to real-time big data that empowers businesses in many ways while sustainability is becoming a major cultural focus. Sustainability encompasses issues of environmental protection, financial efficiency and social responsibility.
What is Industry 4.0?
The definition of Industry 4.0 is intelligent networking of digital devices using IT and communications technology. The term was introduced by German tech engineers in 2011. It involves the streamlining of production processes with smart technology and is closely related to the terms "digitalization" and "digital transformation."
But it isn't just about technology, as it also values people. Here are various 21st-century advancements that fall under the umbrella of Industry 4.0:
- Cloud services
- RFID-based IoT sensors
- Artificial intelligence
- Big data analytics
- Virtual and augmented reality
- 5G networking
- Blockchain for secure storage and transactions
- 3D printing
- Customized on-demand production
By collecting a wealth of data about a factory or other complex operation, decision-makers have access to real-time data that allows them to cut wasteful processes as they are revealed. The use of a cyber-physical system (CPS) in which algorithms control machines is another emerging development that streamlines an enterprise.
Traditionally, cutting industrial waste took months to analyze, whereas now streamlining adjustments can be made instantly. Ultimately, Industry 4.0 technology provides businesses with greater and faster output using fewer people. The concept has spread through industries such as utilities, manufacturing and retail as well as governments planning for smart cities.
Benefits of Industry 4.0
There are plenty of reasons to embrace Industry 4.0, as it helps cut costs and waste while improving productivity. Here are some of the other key improvements Industry 4.0 brings to operations:
- Optimization of internal processes
- Increased connectivity, flexibility, and agility
- Access to real-time data
- Wider bandwidth
- Horizontal and vertical integration with suppliers
- Ability to remotely monitor temperature and energy consumption
- Product lifecycle management
- Engineering consistency
- Automation does more work with fewer people
- Robots can handle work too unsafe or boring for humans
- Faster communication with partners, employees, and customers
- Various channels to facilitate digital communication
Today, ideal manufacturing plants, warehouses and distribution centers are well-equipped with smart technology. A warehouse worker, for example, can use a hand-held barcode scanner to locate any product in the inventory instantly. It's because each product is embedded with RFID chips that communicate with the central database the exact geolocation of the item.
By adopting Industry 4.0, communication between suppliers will improve when supply chain members share data. Such data sharing allows suppliers to learn quickly where supply shortages and surpluses exist. Networking among suppliers can empower the supply chain to know exactly where specific supplies are at any point in the delivery process.
One of the greatest benefits of this digital transformation in how it relates to sustainability is that it improves quality control. The more you improve this department, the greater chance for boosting customer satisfaction since the process weeds out bad products and accelerates the shipping process.
Impacts of Digitalization on the Environment
Manufacturing plants have a need to integrate thousands of IoT devices with their machinery to monitor and evaluate processes. But this explosion of electronic devices saturating a facility can potentially add strain on electric grid systems due to immense energy consumption. Many IoT devices are battery-operated, but the enormous transmission of big data requires significant computer processing power.
One of the drawbacks to embracing industry 4.0 is that the industrial sector focuses more on encouraging profits than on the depletion of natural resources. It's imperative that large producers acknowledge the need to go greener and steer clear of promoting overconsumption. Other problems related to how industry 4.0 impacts the environment include:
- Deforestation and other depletion of raw materials
- Human health issues
- Contamination of groundwater
- Interference with ecological processes
- Pollution and waste from large data centers
The solution to reducing CO2 gases in the environment will partly include broader use of greener alternative energy such as solar and wind. Utilities are already capitalizing on using renewable energy sources to help bring down electricity costs.
Sustainability Ideals vs. Actual Behavior
As much as sustainability is becoming a foreground issue among many businesses, the actual practice of sustainability has been more idealistic than realistic through the 2020s. By the 2030s, there should be noticeable ways sustainability is baked into business models.
Many companies today are just beginning to scratch the surface of what sustainability is and why it's important for business survival. Various factors exist why many companies are resisting digital transformation to smart technology such as:
- Expensive costs to invest in new technology
- Security and privacy issues relating to data and hardware expansion
- Ability to train staff members to develop new technical skills
- Preference and comfort zone for traditional systems
- Questions surrounding data ownership
Part of paving a successful path toward sustainability will require setting policies that reduce the accumulation of wasted materials. Your ESG (environmental, social, governance) policies must take into account the big picture of how producers affect broader ecosystems. Reusing and recycling materials should be part of a business model that supports sustainable solutions.
The industry 4.0 revolution is exciting from a profit-based perspective and it has potential to resolve many problems on the horizon. An expanding population with greater energy demands will continue to strain natural resources. Every company that embraces this new digital paradigm should be conscious of the role it must play in contributing to a better society.