Shaking and reshaping: industry 4.0 and industry 4.1

Photo Martina F. Ferracane / Policy Analyst, European Centre for International Political Economy (ECIPE) / November 30th, 2015

"Although today's digital manufacturing machines are still in their infancy, they can already be used to make (almost) anything, anywhere. That changes everything," said Neil Gershenfeld, Director at MIT's Center for Bits and Atoms. Autonomous robotics, 3D printing, cloud computing, Internet of Things and sensor technologies are driving a paradigm shift in manufacturing. The new era of industrial production builds on the concept of cyber-physical systems. Consumers are expected to play an ever greater role in this new model.

Dating from the end of the 18th Century, our society has experienced a radical transformation based on the transition from an agricultural to an industrial economy. We can distinguish four stages in the industrial revolution. It kicked off with the advent of the mechanical production in the 18th Century enabled by water and steam power. The second stage is placed at the beginning of the 20th century with the rise of mass production powered by electricity. This is associated with names such as Henry Ford and Frederick Taylor. The ‘70s saw the widespread adoption of electronics and IT on the manufacturing floor resulting in the automation of production, considered the third stage in the industrial revolution.

Today, we are at the verge of the fourth stage. Autonomous robotics, 3D printing, cloud computing, Internet of Things and sensor technologies are few of the keystones that are driving a paradigm shift in manufacturing. The new era of industrial production (often referred to as Industry 4.0) builds on the concept of cyber-physical systems. A profound interaction between the real and the virtual worlds which sits at the core of the manufacturing process. The Industry 4.0 relies on a complex virtual net of objects, which are able to gather, process and analyse a wide array of data from the physical world. The analysis and exchange of data enables the objects to interact with each other and perform several tasks autonomously.

The fourth industrial revolution is making the boundary between products and services increasingly blurred, paving the way to the so-called servicification of manufacturing. The driverless car offers a well-known example in this regard. A combination of sensors and software enables the car to locate itself in the real world and interact with traffic lights, other cars, people, road marking, signs and other objects. Today, there is already a higher number of smart objects being connected than the number of people in the world, and this is just the beginning. More than 50 billion objects are expected to be connected within few years. These go from thermostats and shoes, all the way to medical devices.

The interaction between these objects through the Internet is allowing the prevention of car accidents, doctor visits and energy waste, while offering the possibility for users to better manage their time and resources. For example, the mobile app Waze helps users to avoid traffic jams by analysing the data of all the drivers connected to the app. By switching on the app, the users passively contribute traffic and other road data – which are processed in real time to suggest the quicker route.

Industrial processes are also getting smarter and more efficient. Machine-to-machine communication in the manufacturing floor is, in fact, enabling the industrial equipment to auto-configure, adjust to changes and predict failure, without human assistance. For example, by equipping machines with sensors, it can be monitored for which tasks and for how long the machines are deployed and therefore when the routine maintenance is most likely to be required. On the other hand, data resulting from the use of connected objects is feeding the production process on real time, enabling the company to smartly adjust the functionalities of the products and to offer personalised services.

Cisco estimates that the IoT market in manufacturing will be worth around 4 trillion dollars in 2022. This is expected to derive mainly by reducing of all forms of waste (including waste in time) and by retrieving data from workers and customers behaviour. Further gains will also result from the improvement of asset management – especially through smarter maintenance.

The concept of Industry 4.0 relies on the central role of machines in understanding and interacting autonomously with the physical world and is paving the way to great opportunities in terms of smarter industrial processes, new business models and the development of new services embedded in products. However, the latest wave of technological innovation is also offering great potential for the manufacturing sector beyond autonomous machine-to-machine interaction. As the fourth industrial revolution unfolds, the diffusion of 3D printing is offering the opportunity to actively engage customers in the production process. This represents a critical evolution of the role of the consumer. While the Industry 4.0 is about bringing consumers closer to companies by relying on them as passive providers of data within a complex network of smart interconnected objects, its evolution – the “Industry 4.1” –  gives to consumers a revived central role in the production process.

The latest advancements in 3D printing and the diffusion of digital 3D printing platforms are enabling consumers to take an active, and even leading, role in the manufacturing process. This technology enables the users to feed the manufacturing process to an extent not seen since the advent of the industrial revolution. 3D printing enables the creation of three-dimensional objects starting from a digital model. The 3D design is sliced digitally and successive ultra-thin layers of material are deposited one on top of the other until a solid object emerges. This process of ‘additive’ manufacturing is a diametric contrast to the traditional manufacturing processes, which are fundamentally subtracting material and typically produce waste while casting, moulding, forming, machining and joining a part. Given the nature of additive manufacturing, there are barely any economies of scale, making it particularly well positioned for customisation of products to fit the specific characteristics or preferences of an individual.

From customization to consumer engagement
Consumers become able to intervene at any stage of the production process, from the design of the product to its actual manufacturing and distribution. They can participate to the design phase through 3D printing platforms and other design tools. These tools enable them to easily tweak existing designs or provide their own anatomical data to customise the product.

The shoes market offers an example of functional customisation, which has already kicked off. There are several mobile apps available in the market which turn an iPhone into a mobile 3D scanning device. They work by taking numerous pictures of one’s foot, and then transforming that data into an accurate three-dimensional model. The consumer can scan his foot and provide the data to the company, which will use it to 3D print on-demand customised shoes. This example shows the incredible potential of 3D printing to revolutionise the business models of virtually any product – as long as aesthetic or functional customisation offers additional value to the consumer. Several platforms such as Twikit are used today to personalise jewellery, dresses, lamps and other everyday objects. Companies are also performing functional customisation in the medical sector –  the Belgian company Materialise, for instance, is printing customised prosthesis.

The consumers can also engage personally with the companies in their local community. In fact, the costs of setting up the production system for additive manufacture is substantially lower than in the case of traditional manufacturing. Urban start-ups are being set up and are producing products on demand and in small batches by engaging personally with consumers.

In this regard, it is interesting to mention the mushrooming of fabrication laboratories (or FabLabs) around the world today. These are places where anyone has open access to machines for digital fabrication (including 3D printers) and receives specialized support to create or prototype a certain object. Even if the concept is relatively new, thousands of FabLabs are already fully operational all over the world and are encouraging anyone to engage in digital fabrication, regardless of their knowledge of this technology. Consumers can decide there to get help to produce a product, rent a 3D printer to print their own products or even buy one to create certain products at home.

The concept of ‘prosumer’ – a user that is both consuming and producing content – is not new, especially in the services sector. This is the case of users being asked to do an online check-in and print it at home, but also users that carry on transactions through their home-banking. However, until recently, this has not been the case in the manufacturing sector, whose traditional structure tended to distance consumers from the production process. With 3D printing, however, the phenomenon of prosumer is set to reach an unprecedented scale in manufacturing. The consumers are not anymore mere clients, but they contribute to the production process and co-create a product together with the company.

As of today, we can only speculate on how the industry will be transformed by this technology-enabled participation of the consumers in the production process. Traditional manufacturing will not be disrupted in its entirety. However, we are likely to witness a great deal of transformation in the production of several products, with companies restructuring their production process and encouraging greater consumers’ involvement to seize the new opportunities offered by digital fabrication. This might result in a ‘hybrid’ manufacturing sector – somewhere between traditional and additive production – which facilitates an even deeper connection between the cyber and the physical worlds.

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