Reshoring Manufacturing with Industry 4.0

Industry 4.0 is an extension of the continuous improvement journey based on computer-integrated manufacturing (CIM) that manufacturers have been on since the 1980s—the goals of which are to optimize efficiencies, improve product quality and increase profitability.

What is Industry 4.0?

Industry 4.0 refers to the integration of advanced technologies, such as artificial intelligence (AI), the Internet of Things (IoT), cloud computing, and big data into production processes. It involves the digitization of traditional industries and the creation of “smart factories” that are highly connected, automated, and efficient. Industry 4.0 enables machines to communicate with each other, make decisions based on data analysis, and optimize processes in real-time. It’s a much deeper and expansive concept than “automation”.

What are the impacts of Industry 4.0 on manufacturing in high-income countries (HICs)?

Investing in Industry 4.0 technologies significantly reduces the low-labor cost advantage that manufacturers in low- and middle-income countries (LMICs) have long had over manufacturers in HICs. As a result, for the first time in 30 years, manufacturing in North America is making a comeback. Reshoring is real and reflects changes in economic ideology and geopolitics that highlight the threats to prosperity that reliance upon offshore manufacturing has created. Industry 4.0 represents an exceptional opportunity for North American manufacturers—and they are advised to learn about it and seriously consider incorporating its technologies and methodologies into their operations. A pre-requisite for Industry 4.0, however, is the adoption of “lean thinking” whereby companies view their business as interconnected horizontal processes (loops) rather than vertically organized silos.

How does Industry 4.0 reduce the low labor-cost advantage?

In Industry 3.0 manufacturing environments people are trapped between processes and computers. Industry 4.0 creates cyber-physical systems that connect computers to processes without human intervention, largely eliminating expensive, and often inaccurate, manual inputs. What’s more, the data provided is in real-time. Through interconnectivity, Industry 4.0 liberates people from a host of tedious tasks, such as visually monitoring what is happening in the production environment. This reduces the cost of labor and/or allows human resources to engage in more value-added tasks.

In what other ways does Industry 4.0 benefit manufacturers today?

Through interconnectivity with cyber-physical systems, Industry 4.0 allows manufacturers to visualize the production floor and see what is happening in real-time.  Workers can monitor the speeds, feeds, and operating parameters of production floor equipment; they can accurately measure all processes and generate vast amounts of data. This data can be used to help determine whether what a manufacturer planned to happen actually happened—and shed light on why it may not have.

Industry 4.0 also makes it possible to:

1. Measure the operating effectiveness and efficiency (OEE) of equipment to support decision-making on new equipment purchases. Why purchase new equipment when you are not using what you have effectively and to the fullest?

2. Create a digital twin, a virtual replica of an object or system, that can be used to simulate and analyze various scenarios without affecting the real object or system. This helps with design and development, predictive maintenance, quality control and training and education.

3. Simplify and automate the reporting of production.

4. Drill into details to problem solve and support decisions for greater productivity and profitability of operations.

5. Provide clients with the ability to create and visualize their product requirements and self-serve their RFQ process via online web portals and graphical configurators.

How Six S Partners can assist you on your journey to Industry 4.0

As the graphic below indicates, ERP systems are front and center in any flowchart depicting major system functions of Industry 4.0.

As an Epicor Platinum Elite Partner, Six S Partners provides full-service Epicor Kinetic ERP implementation and consulting. ERP is a key enabler for Industry 4.0 because it provides a single source of truth for data that is essential for the adoption of smart machines and digital technologies. ERP systems are often used to connect and integrate with other systems in the organization, such as manufacturing execution systems (MES) and product lifecycle management (PLM) systems, to enable end-to-end visibility and control over the production process.

Contact us for further information or set up an assessment so we can work with you to determine where to focus your efforts for a greater return and increased competitiveness for your industry, operations and the products you sell.