The value of the Fourth Industrial Revolution

20 years ago, the value of manufacturing was mass production, low unit price and standardization which were the spirit and value of the 3^rd Industrial Revolution. The automotive industry, mobile device industry and 3C industry have received the most benefits from it. These industries have one common feature, they would make mass production for a single part, at the same time, they were facing time pressure, direct requests and the demand of standardization, and these requirements from external and internal made them form an automatic production line. At the generation of the 3^rd Industrial Revolution, the definition of the automatic production line was connected by a robot system of several machines or dozens of machines which met the requirement of these industries.

However, this automatic production line has the biggest disadvantage which is that if only one screw on the production line is loose or one machine is broken, it will affect the whole automatic connection. Or the malfunction of equipment will lead to the downtime of the production line, and badly affect delivery time. This is why under Industry 3.0, manufacturers prepare more spare parts in stock to avoid downtime. The customers of the automatic production line have one common requirement, which is zero tolerance of downtime. If there is any machine failure, the buyers usually require that repairs to be done within 8 hours, otherwise, manufacturers will encounter a penalty. Therefore, manufacturers must prepare a lot of spare parts which causes the cost of production to become expensive as buying two production lines. At that time, the designers of mechanical equipment had no capability to do the data analysis, to know the vulnerable part of the machine. All they could do is to buy more spare parts to avoid downtime and from this point of view might explain why smartphones are so expensive.

In 2013, Germany found that German manufacturing industry was no longer a comprehensive world-leader. The German government invited experts from various industries to find out solutions. As a result, Germany proposed many demands to meet the next industrial revolution. They proposed the white paper of "Secure German industries: recommendation of industry 4.0" which examined how to develop a more reliable, automated approach from different perspectives. In terms of manoeuvrability, production equipment no longer needs to connect with many machines as in the past. By contrast, one machine can have different worktables to do the connection, so that machine can enhance working capacity, or small number of machines can be linked to achieving automated production to meet the requirement of 24/7 automatic production. Under this situation, Industry 4.0 is manoeuvrable and meets the quantity requirements, even one-off item can be manufactured profitability, and at the same time, it meets the just-in-time procedure without any problem. The production equipment under this structure is the definition of Industry 4.0 to the machine tool industry.

In the generation of Industry 4.0, on account of monitoring technology, manufacturers can predict machine failure in advance. Moreover, with the monitor technology which can collect all machine status and component status information and transform all information into readable signals or data. Afterwards, the data is sent to the cloud through the Internet of Thing (IoT) to do AI calculations. During this process, the outcome reports that become the important database reference for the management to make a strategy.

With the organization equipped with Industry 4.0 facilities, in terms of the automation, the organization has to consider automatic production, which fully showed the spirit of Total Quality Management. At supply chain, it can reach fully automated ordering and supply control, which can avoid a large amount of inventory and shortage of materials. Intelligent mechanical equipment has this function and can be connected with intelligent ERP to make automatic order to have the in-time supplies by the supplier. From the sales perspective, they can check the production system from mobile devices to have the real-time production data to understand the delivery time, products and quantities required by clients. This can help them to get the order more efficient. Therefore, Industry 4.0 is a fully automated system on the supply side. For sales, it is a more effective way to provide services at any time. The competitiveness of Industry 4.0 is stronger than Industry 3.0.

On the other hand, IoT leverages its contact function. For example, a company does not need to set up factories in one certain country, or concentrated in one city, it can be at any country or city. As long as there is a central system with internet to control and manage production plan, everything can be done. Furthermore, because the regional risk is dispersed, the organization is not affected by the regional economy which may lead to many difficulties. Nowadays, the organizations are more flexible to manage the production line to make the maximum profit for itself. This is a fascinating aspect of Industry 4.0.

This graphic shows how does a typical Industry 4.0 factory work. It has only one production control and management center, but the production site has to be at Internet-accessible place or country, to achieve mobility of immediate delivery and feature of local suppliers. Overall, Industry 4.0 plays an important role in the manufacturing industry and becomes a competitive advantage for organizations.