How smart manufacturing and industry 4.0 are shaping the supply chain

Industrial IoT solutions, 3D printing and blockchain are some of the biggest technologies ushering in the new age of the secure supply chain


What is smart manufacturing? Not a single concept, but a whole family of technologies that brings efficiency and new opportunities to manufacturing – and, in turn, the entire supply chain.

This industrial revolution goes by the name industry 4.0. It is not without its potential risks, but the advantages could not be clearer. Here is a look at some of the most important technologies coming of age in industry 4.0, as well as the details on how they can help manufacturing companies work smarter, plan better and take on the global marketplace with greater confidence than ever.

Connected equipment makes maintenance intelligent

Smart manufacturing begins with smart machinery. Industry 4.0 provides lots of tools for manufacturers who want to reduce their maintenance burdens and costs and prolong the useful lifetime of the machines they depend on to manufacture and distribute their products.

Technology vendors that offer industrial IoT solutions offer suites of connectivity and communication tools for retrofitting older equipment with "smart" capabilities – and heavy equipment manufacturers are designing with connectivity and intelligence from the ground up. But what are the benefits for manufacturers bringing your physical equipment into the digital fold?

When machines can communicate with one another, they can synchronize and optimize their activities with greater precision, ratcheting production and throughput up and down depending on conditions at the docks, on the machine shop floor and elsewhere. Using sensors to collect data about machine health allows engineers to plan maintenance intervals around production schedules and get the longest life possible out of interchangeable parts before replacing them. In short, the IoT takes preventive maintenance and makes it truly predictive.

Providing machines with the ability to gather intelligence for themselves is not about squeezing humans out of the equation. It is true that some lower-paying jobs might not be around for much longer, but on the other hand, manufacturing companies need to bring on a lot more personnel with analytics, automation, data science and robotics experience in the coming years. The workforce is not violently contracting as automation doomsayers have claimed, but the makeup of the workforce in industrialized countries is definitely changing, with higher-paying jobs coming into higher demand.

Blockchain, track-and-trace and supply chain transparency

Manufacturers and consumer goods companies are perfectly positioned to enjoy the benefits of blockchain.

Using blockchain, every partner along a supply chain contributes to a decentralized ledger which records operational information permanently and transparently. The result is a bulletproof record of manufacturing details (e.g., origin, manufacturer, date of completion) and financial details (e.g., amount paid, date of transaction, names of parties) that cuts down on the amount of bureaucracy required for a supply chain to run smoothly, saves money by making third-party remittance and verification companies redundant, and creates true traceability throughout the supply chain.

Because every product or batch of products has a unique cryptographic identifier, it is easier than ever for companies to trace defects back to their source, handle recalls more effectively and protect their reputation, all while making routine compliance activities easier than ever.

Additive manufacturing and the means of production

There is no way we could discuss smart manufacturing without talking about additive manufacturing or "3D printing".

The point of smart manufacturing is not to adopt new technologies just because they exist, but to identify those which provide an opportunity or solve a problem. One of the biggest problems in manufacturing today is that companies can discard up to 21% of their raw materials, according to some estimates. Those same estimates suggest that 3D printing could help manufacturers reduce their material losses to just 10%.

Since additive manufacturing adds material to a workpiece rather than removing it, it is easy to see the potential cost savings. But 3D printing also makes it faster and more cost-effective to produce greater numbers of product prototypes. This speeds up the testing phase of product design while simultaneously making it more likely that designers and engineers can find flaws before mass production, thanks to the larger sample size of prototypes.

Maybe the most exciting implications for manufacturers and the supply chain as a whole is the ability to move the means of production closer to the customer. Predictive analytics for planning around product demand is very real and very useful, but even that level of speculation will not be as necessary once manufacturers can simply distribute their merchandise via digital schematics. Customers will soon place orders for 3D-printed products from hobbyist shops, automotive parts stores, department stores, electronics boutiques and even clothing stores, customization options included.

The impact to the global supply chain could be huge. Manufacturers should begin planning for a future with far less need to transport finished and partly assembled merchandise all over the world. Techniques to 3D-print products from multiple materials, or with electronics embedded inside, are maturing rapidly as well, which will allow 3D printers to assemble a truly huge variety of products.

Security concerns and some solutions

All of this connectivity comes at a price, of course. Even in 2019, research from Gemalto suggests that 48% of surveyed companies are still not equipped to detect IoT-based security breaches under their own roof. Interestingly, the same research indicates that 79% of business decision-makers are looking to the government to outline IoT security guidelines and 95% of decision-makers wish for uniform federal-level regulations to simplify compliance-related tasks related to the IoT.

It is hugely problematic that so many companies have at least limited IoT deployments in place already but lack the in-house talent and tools required to detect intrusions. It might be a consequence of companies looking before they leap, in terms of investing in new tech, but it is also because of the trend we mentioned earlier: Skyrocketing demand for talent in data science, analytics, cybersecurity and other disciplines involved in keeping trade secrets and intellectual property safe from thieves.

We have seen high-profile cases over the years where even internet-connected heating and cooling equipment – and there is a lot of this at work in the manufacturing industry – can open a back door to cybercriminals.

There are huge benefits to industry when it comes to making climate control, refrigeration and freezer systems more intelligent – energy and cost savings are just the start of it. But all of this internet-connected infrastructure requires the right approach if we want to keep it safe. Some cybersecurity experts believe 60% of small and mid-sized manufacturers have suffered downtime or the loss of mission-critical data thanks to cyberattacks.

Securing IoT devices requires a team who understands the stakes involved as well as best practices. Some estimates say there will be a total of 36 billion IoT devices in the world by 2021, which is a huge threat surface. On the simpler side of things, just keeping up-to-date with machine firmware and security updates will go a long way toward keeping manufacturers safe. On the more advanced side, companies can use virtual local area networks (VLANs) to isolate connected machines from outside interference without completely shutting them off from the rest of the company's operations.

But despite the caveats and learning curves, industry 4.0 is changing manufacturing and the world for the better.

There is nothing more important for the daily functioning and long-term survival of a company than information – and industry 4.0 and the IoT deliver tons of ways to dive into streams of information. These technologies illuminate issues on equipment performance and vendor deadline management, whilst also providing ways to keep companies and their good names protected when an audit comes around or a problem needs to be traced back to its source.

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