Industry 4.0 for SME companies
How digitalization is moving into small and medium-sized enterprises
In order to find an optimal introduction to the topic of Industry 4.0, we should first clarify the terminology. After that, I will give you a brief outlook of the possibilities with short examples and their already existing applications. The goal should be to understand how far progress has already changed everyday life in many companies. Through this understanding, I want to take away your fear of these changes and encourage you to start with your own digital strategy for your company.
In order to understand the terms optimally, I will start with a short journey through time. The term Industry 4.0 is intended to describe the fourth industrial revolution. The first industrial revolution is defined as the invention of the steam engine around 1800 in England. The steam-powered weaving machines symbolize the transition from an agricultural economy to industrial production.
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2nd industrial revolution – assembly line production
The second revolution is usually associated with Henry Ford and the first assembly line production for cars. Although the concept of assembly line production did not originate with Ford, he was the first to successfully implement this idea on a mass scale. Most mass production lines are still based on this concept today. Likewise, with the introduction of assembly line production, the division of labor kept pace. The concept, which goes back to Adam Smith, stands for the specialization of activities. By consciously separating individual work steps, productivity was increased enormously. It was the beginning of the individual occupational specializations.
3rd industrial revolution – electrics and computers
The third industrial revolution started in the 1970s. Due to the increasing use of electricity and computers and the beginning of automation, this time is seen as the starting point for the third revolution. At this time, individual steps in the process began to be automated. The last stage of this development is a fully automated production which in principle does not need human labor. In practice, however, there are very few such factories, because such concepts can only be realized with products of extremely high volume and very few possible variants. If these factors are not present, the costs for automation in Concept 3.0 are exorbitantly higher than the resulting savings. For this reason, no fully automated processes have emerged in many industries despite many attempts.
These possibilities are now given by the fourth industrial revolution. Through the use of new technologies, it is possible to enable fully automated production starting from quantity 1. This is the real revolution behind it. The production companies are moving away from mass production with the aim of serving the widest possible mass of customers with the same product. The new way of thinking is exactly the opposite, a product should be created that is as adapted to the customer as possible, which corresponds exactly to the specifications, wishes and needs of the customer. This automatically results in smaller batch sizes. But in order to realize these wishes both economically and technically, it is necessary to rethink production.
4th industrial revolution – networking and new technologies
But Industry 4.0 stands for much more in production. The entire value chain is being completely turned upside down by new technologies. It starts with product development. Here, the new manufacturing technologies such as 3D printing offer completely new possibilities. In the past, products were planned according to the possibilities of the manufacturing machines in order to be able to be produced. Today, you can only think in terms of function and customer benefit, because “there’s no such thing as can’t”.
Production 4.0
Production 4.0However, completely new business areas are also suddenly possible in the production environment. Machines as a service, for example. More and more often, machines are only rented out, but equipped with countless sensors. This makes it possible for the manufacturer to collect data on the use of the machine and thus incorporate it into the further development of the products. This is where Predictive Maintance comes in. Through constant monitoring and tracking of trends, it is possible to plan the optimal time for maintenance work. This can drastically reduce the probability of machine downtime. Unplanned machine downtimes are thus a thing of the past.
Customer communication 4.0
But a lot has also changed in customer acquisition and support. Whereas in the past everything depended on the sales force, new channels are increasingly being used. Customer acquisition on social media has now become an important mainstay for many manufacturing companies. The targeted use of chatbots are used for both customer acquisition and support. This is because many questions and concerns from customers come up again and again, and this automation can save an enormous amount of effort in administration. Furthermore, a better evaluation is possible in order to gain data for the further development of the products.
Customer Experience 4.0
Once the first interested parties have been found for the new product, the use of virtual reality makes it possible for the customer to experience the product “up close and personal” in all its facets. Likewise, change requests can be mapped quickly, making it possible to inspire the customer. A conclusion is much easier to reach by using such planning and visualization tools. Likewise, this data can be used again for the production and further development of the products.
Data for Industry 4.0 feedback loops
A loop back is created each time and the data obtained is used again each time. As a result, Industrie 4.0 is no longer usually referred to as the classic supply chain. Since there are always feedback loops that intervene in the further development, we now speak of a demand circle. This means a cycle that continues to develop independently and further optimizes the benefits for the customer. It is also evident in the production environment that the focus is increasingly on the customer. Because whoever understands the customer’s needs best will also be able to create the best solutions for him. Thus, it can also be said that whoever is the leader in this development will be a big step ahead of the competition.
Industry 4.0 is now affordable for SMEs
While for a long time these technologies and applications were reserved for large companies with their own research departments and large budgets, this development has now also reached SMEs (small and medium-sized enterprises). Through the targeted research and development of large corporations, many solutions have been created from which everyone else can now benefit.
Nevertheless, many companies still shy away from the use of such technologies and hesitate to introduce them. This is also mostly due to the lack of a digital strategy. Such changes cannot be implemented off the cuff. It is essential to plan a strategy and adapt it to the circumstances of the company and the market environment. For these activities, it is recommended to consult an expert in order to achieve an optimal implementation. However, there is great potential for the SMEs that are now starting to implement the strategy. It can be assumed that the early-birds in the SME sector will also be among the winners here.
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