Fourth Industrial Revolution Engineered By the Internet of Things

Robert Brice
Wed, Jun 3, 2015
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The manufacturing industry stands to gain from the use of the Internet of Things.

The manufacturing industry stands to gain from the implementation and further integration of new technologies in the coming years, according to a new report by McKinsey & Company. The report, which was released May 5, describes how the manufacturing industry will undergo dynamic growth and change by 2025 through the increased use of analytics, innovative technologies like factory sensors and 3-D printing, and data science. The projected growth will be made possible by technologies like the Internet of Things.

The Internet of Things is the general name given to the network of sensors that attach physical objects to each other over the Internet. These devices are essentially data collection systems. They allow data to be exchanged between manufacturers, consumers and objects and are found virtually everywhere. In the industrial sector, the term "Industry 4.0" has been given to the use of these kinds of sensors that allow manufacturers to keep track of products in their factories and through every step of the supply chain, which makes inventory management easier and more efficient. According to PricewaterhouseCoopers, 35 percent of U.S. manufacturers currently use smart sensors to collect and analyze data, and 34 percent believe the adoption of the Internet of Things is crucial to continued success of manufacturing operations.

Industrial revolutions, if that's what we're going to call the integration of the Internet of Things into the manufacturing industry, have traditionally been marked by the introduction of some sort of new technology into the process that makes operations easier and faster. The first industrial revolution was centered around the adoption of steam power, the second around the rise of electicity and the third around automated manufacturing. The fourth industrial revolution, as German manufacturers are fond of calling it, will bring about a paradigm shift in the business operations of many industries, and with this shift companies will enjoy distinct benefits. One of the biggest advantages of the integration of these sensors is that manufacturing equipment won't need to be replaced. According to the McKinsey report, only 40 to 50 percent of the current equipment will be replaced by new installations. Instead, sensors can be affixed in order to add interoperability to equipment. This means existing 

"A significant amount of the value will come from upgrading existing systems to ensure interconnectivity for data collection, analysis and executing commands," Hans-Werner Kaas, senior partner and head of the McKinsey Automotive & Assembly practice, told PDD.net. Kaas went on to say that sensors can be retrofitted to existing equipment, and technological capabilities (like memory, software and processing power) can be upgraded in order to facilitate the analysis of data gleaned from the newly connected machinery.

The Future of Manufacturing
The implementation of sensors - or, if you like, the integration of the Internet of Things - into the manufacturing industry promises to instigate growth and change. One significant change that McKinsey sees in the future will be in warehouse management - including a shift in worker skill demand. According to Fast Company, though the current trend toward workflow automation will continue, manufacturers and suppliers will need to hire employees who know how to handle and analyze data. Companies are going to continue to leverage big data to determine how and where they should operate, and it's important to have employees who will know what to do with the data collected by the sensors.

Other technologies important for fourth industrial revolution? Augmented reality and 3-D printing are both on the docket for companies to take advantage of in the coming years.

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