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May 31, 2018

Developments in Industrial Automation

MHT Partners  | Business & Information Services Investment Bank

Rapid developments in technology have always permeated the manufacturing industry. In the late 19th century, the First Industrial Revolution took place, replacing cumbersome hand production methods through the leverage of steam-enabled machines. Just prior to World War I, the Second Industrial Revolution manifested, marking the electrification of machinery. The Third Industrial Revolution, commonly known as the Digital Revolution, took hold in the 1980s, applying computer processing to production processes. Currently, manufacturing is entering the Fourth Industrial Revolution, also known as “Industry 4.0.” Industry 4.0 is being shaped and defined by artificial intelligence, machine learning, blockchain, the Industrial Internet of Things, and cloud computing, among other 21st century technological marvels.

Some of the technologies mentioned above have been around for a decade or more. However, they are just now exiting their nascent, developmental stage and being harnessed at a commercial level. Accountable to greater reliability and lower cost, the technologies are ready to be used in a widespread and scalable way, changing how manufacturers conduct business. These advancements in technology will help them deliver value-added products cheaper, faster, and of higher quality than ever before.

To harness the power of modern-day computing, manufacturing industry leaders are partnering with technology companies to develop software and products that will create “smart factories,” highly digitized and connected production facilities. However, a recent study published by Intel suggests that software alone will not suffice to create these smart factories.  Employees will need to be trained and equipped with the right skills to handle new technologies, and legacy systems will need updating or replacement to achieve seamless integration.

Manufacturers have much to gain from such investments. On a micro-level, the main benefits of the smart factory model are the elimination of labor-intensive jobs and mundane tasks, allowing manufacturers to realize operational efficiencies and reallocate their resources to higher-priority, higher-value-add tasks. Additional benefits include an ability to mitigate injuries and fatalities in dangerous working environments, significantly improving the health and safety of workers. On a macro-level, the potential benefits are endless. The cost of doing business across nearly every industry will fall, boosting economic growth. Global trade will expand, creating opportunities for people worldwide to provide and receive products and services from all parts of the globe.

In fact, some manufacturers will likely fear that employees will not be able to adapt to the new technologies apace. However, using previous Industrial Revolutions as a proxy, humans tend to find a way to sift through the intricacies of new technologies and harness them to the greater benefit. Industry 4.0 will likely prove no different.

Sources:
https://www.intel.com/content/www/us/en/industrial-automation/overview.html
https://www.pwc.com/gx/en/industries/industries-4.0/landing-page/industry-4.0-building-your-digital-enterprise-april-2016.pdf
https://www.mckinsey.com/business-functions/operations/our-insights/manufacturings-next-act

 

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