The Industry 4.0 revolution is rapidly transforming manufacturing, and businesses and entrepreneurs in other sectors are beginning to feel the effect. As 2017 drew to a close, 27 percent of manufacturers said they had already experienced substantial transformation under the impact of Industry 4.0, a survey by The Economist reports. Another 36 percent said they were in the process of adapting to Industry 4.0 technology, and 19 percent said they had developed an implementation strategy. Just 10 percent said they were not yet pursuing an Industry 4.0 strategy.
As more manufacturers adopt Industry 4.0 technology, more businesses in both manufacturing and other industries will be affected. Here are three things entrepreneurs in all fields should know about Industry 4.0 and how it will affect businesses at large.
Applied Real-Time Business Intelligence
One of the biggest impacts of Industry 4.0 is making real-time business intelligence available to companies for practical applications, says Everything IoT. Factories, for example, are now equipped with internal sensors connected to the Internet of Things (IoT), providing real-time data about factory conditions, production progress, worker activity and other vital information. This information can be fed into artificial intelligence (AI) computer algorithms to create a cyber-physical system, where AI analysis is used to automatically adjust physical production processes for optimal performance.
An example of how businesses can benefit from this is supply chain management. For instance, let’s say an important piece of machinery in your production process uses o-rings that periodically need replacement. A cyber-physical system can automatically monitor your equipment in order to determine when you need to order a new o-ring, and it can even automatically place a replacement order with an o-ring supplier. This type of automated system can be used to automatically maintain inventory at optimal levels. Similarly, other business systems such as marketing, sales and customer service can be automated to leverage real-time business intelligence.
Changing Labor Needs
Industry 4.0 automation will dramatically change the nature of the labor needs required by businesses. Between artificial intelligence and robots, many rule-based, routine tasks will be taken over by machines. Over the next two decades, half of American jobs could be automated. These will be predominantly jobs that involve routine procedures and tasks, such as data entry, telemarketing and tax preparation, for example.
While this will eliminate the need for employers to fill certain types of routine positions, it will shift labor towards other tasks that require skills such as creativity, emotional intelligence and people skills, predicts the World Economic Forum. For example, as computers provide automated business intelligence insights into marketing trends, it will fall on marketers with creative vision to decide how to transform these automated insights into competitive strategies. Employers will need to adjust their hiring practices to focus on filling different types of roles within their companies. Workers in all departments will need to possess basic technological literacy in order to interact with Industry 4.0 tools.
Industry 4.0 will also change the way businesses interact with customers by creating an expectation for more customization. Industry 4.0 technologies such as mass customization, 3-D printing, virtual reality and the Internet of Things are making it possible for companies to offer customers digitize previews of products so they can place customized orders.
For example, Nike helped pioneer mass personalization by offering customers the ability to go online and specify customized shoe components such as logo design, lace and color. Numerous other industries have adopted a similar approach, ranging from car manufacturers to cosmetics suppliers. As more companies offer mass customization options, customers will increasingly come to expect it, requiring companies that want to stay competitive to follow suit.
Industry 4.0 will allow businesses to leverage real-time business intelligence, empowering smarter decisions and greater automated efficiency. The increased automation fueled by Industry 4.0 will require dramatic shifts in the labor force, as machines take over routine tasks and employers seek workers with new skill sets such as creativity. Industry 4.0 technologies will also change customer expectations by allowing mass customization, compelling companies to offer more personalized products. As the fourth stage of the Industrial Revolution advances, business will become more automated, more efficient and more customer-centric, boosting satisfaction for customers and making entrepreneurship easier and more profitable.