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Disruptive Innovation- In Operations Scenario


Today Digital technologies are challenging the traditional manufacturing industries they are changing the way how things are designed, made and serviced across various industries. They have the potential to create value by integrating individuals and machines across the value chain— making it possible to generate, securely organize, and draw insights from vast new oceans of data. These technologies challenge the status quo and have huge potential for a disruptive change, similar to that of rise of Ecommerce Industry. Internet has contributed nearly $1.7 trillion to global GDP in 2010 when two billion people connected online. Any guesses what would be scenario when 50 billion smart machines—deployed across factory floors, through supply chains, and in consumers’ hands—can connect with one another? Isn’t that exciting, and yes today we are moving towards the 4 th Industrial Revolution i.e. Industry 4.0

During 1990s the integration of information technology and automation has helped the manufacturing industry immensely in being organized and profitable. Over the years one of the main reasons for low cost production can be attributed to automation. However, there was a delay in decision making whenever there was a disconnect between the data which is present with the decision maker and happenings on the production floor. This is where INDUSTRY 4.0 - the 4 th Industrial Revolution - comes into the picture. Industry 4.0 is all about leveraging the technology to its fullest level. Before we delve into what Industry 4.0 is, let us understand what are the four phases of industrialization that the companies have undergone?

Four phases of Industrialization

Disruptive Innovation- In Operations Scenario Introduction Today Digital technologies are challenging the traditional manufacturing industries they

Industry 1.0 which dates back to late 1700s was mainly characterized by development of water and steam power. Industry 2.0 was revolutionized by electricity. Mass production was possible due to assembly lines. The third revolution, Industry 3.0 occurred when information technology made its way in the manufacturing in the latter half of 20th century. Today the

consumers demand for more customized products as result it becomes a challenge for the manufacturer to bring in produce goods with more efficiency at lower cost.

The Industry 4.0 the 4 th Industrial Revolution is a move towards digitization and can be explained in three parts.


Internets of Things and cyber-physical systems such as sensors have the ability to


collect data that can be leveraged by manufacturers and producers. Advancements in big data and powerful analytics help the organizations to trawl


through the huge sets of data and produce insights that can be acted upon quickly. Communications Infrastructure backing this up is secure enough to be used by heavy

Information and communication technology will be taken on board by small factories for an evolution in supply chain and production. This would bring higher level of digitization and automation in the process

How does the Industry 4.0 differ from the IoT?

IoT mainly focuses on convenience of individual consumers, where as the Industrial 4.0 is strongly focused on improving the efficiency, safety, and productivity of operations balancing return on investment.

There are 9 pillars on which Industry 4.0 rests

consumers demand for more customized products as result it becomes a challenge for the manufacturer to

Autonomous Robots

Robots are autonomous, flexible and cooperative devices that the organizations are leveraging to tackle complex assignments. These robots are programmed in a way that they interact with one another and work safely side by side with humans and learn from them. They cost less and offer a wide range of capabilities that are needed in manufacturing today. A classic example of this would be Kuka, a European manufacturer of robotic equipment. Kuka offers autonomous robots that are interconnected so that they can work together and automatically adjust their actions to fit the next unfinished product in line. These devices collaborate with humans with the help of high-end sensors and control units.


Today we can clearly see the evolution of 3-D simulations from products, materials, and production processes to future simulations which can be extensively used in plant operations. By leveraging real-time data, these simulations mirror the physical world in a virtual model including machines, products, and humans, thereby allowing the operators to test and optimize the machine settings for the next product in line in the virtual world before the physical changeover, which eventually helps in driving down the machine setup times and increasing quality. For example, a virtual machine was developed by Siemens and a German a machine-tool company, this virtual machine can simulate the machining of parts using data from the physical machine. This tool has helped the company in reducing the setup time for the actual machining process by as much as 80 percent.

Horizontal and Vertical System Integration

Most of today’s IT systems are not fully integrated. Companies, suppliers, and customers are rarely closely linked. Nor are departments such as engineering, production, and service. Functions from the enterprise to the shop floor level are not fully integrated. Even engineering itself—from products to plants to automation—lacks complete integration. But with Industry 4.0, companies, departments, functions, and capabilities will become much more cohesive, as cross-company, universal data-integration networks evolve and enable truly automated value chains. For instance, Dassault Systèmes and BoostAeroSpace launched a collaboration platform for the European aerospace and defense industry. The platform, AirDesign, serves as a common workspace for design and manufacturing collaboration and is available as a service on a private cloud. It manages the complex task of exchanging product

and production data among multiple partners.


The Industrial Internet of Things

Using IoT technology, organizations are developing smarter infrastructures and building connected networks across entire manufacturing processes. Internet of things has given voice to lifeless objects through which they can communicate with each other. IP enabled miniature sensors have made this inter object communication possible.

Real-time visibility: IOT will provide managers with real-time monitoring that lets them know which







This makes the process much more efficient and error free.

Automation: The objects can signal to warehouse robots to move it to production line without any human intervention.IOT allows equipments to schedule their maintenance; allows ready goods to

schedule their

shipment. This makes the process very smooth and safer without any human


Data: When objects communicate with each other, lots of data gets generated which needs to be captured and analyzed for further improvements. This data is the input for the big data analytics.

Cyber security

Today organizations need to protect critical industrial systems and manufacturing lines from cyber security threats because of increased connectivity and use of standard communications protocols that come with Industry 4.0. As a result, secure, reliable communications along with sophisticated identity and access management of machines and users are critical. Over the years we can clearly see several industrial-equipment vendors acquiring or establishing partnerships with cyber security companies


Companies are already leveraging analytical applications and cloud-based software’s, but with the advent of Industry 4.0, more production-related undertakings will require increased data sharing across sites and company boundaries. At the same time, potential improvement in the performance of cloud technologies will help in achieving reaction times of just several milliseconds. As a result, machine data and functionality will increasingly be deployed to the cloud, thereby enabling more data-driven services for production systems

Additive Manufacturing: 3-D printing allows direct printing of objects directly from raw materials. The object can be of any shape or size. The method which uses addition of multiple layers of raw materials of desired shaped is known as additive manufacturing. It has applications in almost every industrial segment, from electronics to medical devices and from clothing to automotive manufacturing.

This has multiple benefits:

Saves the time needed for sourcing the mold and manufacturing the required part

Cost effective

Customization of products as per customer requirements

It has applications in almost every industrial segment, from electronics to medical devices and from clothing to automotive manufacturing.

Augmented Reality: It combines the physical world with the digital world. The reality is combined with the computer data and perception of reality is expended by means of digital transformation with help of mobile devices such as smartphones and google glasses. Logistics company Knapp AG developed a picking technology using augmented reality. Pickers wear a headset that presents vital information on a see-through display, helping them locate items more quickly and precisely. And with both hands free, they can build stronger and more efficient pallets, with fragile items safeguarded. An integrated camera captures serial and lot ID numbers for real-time stock tracking. Error rates are down by 40 percent,

among many other benefits.


Vision Picking: Order picking is the process of collecting items in a specified quantity from inventory to fill a customer order. The order picker must locate the correct product, scan the product, and deliver the product to the loading dock. Most traditional order picking processes involve paper-pen picking or picking through voice-automated systems. However, this continues to result in inefficiencies. When coupled with augmented reality, orders can be fulfilled with the help of smart glasses like google glass. Vision picking offers digital navigation to find the right route and item more efficiently, while reducing training time. All the information related to location of item is displayed within the visual field. The employee can move faster, more efficiently and with greater accuracy.

Big Data and Analytics

Big Data and Analytics helps the organizations in saving energy, optimizing production quality and improving equipment service. In an Industry 4.0 context, the collection and comprehensive evaluation of data from many different sources—production equipment and systems as well as enterprise- and customer-management systems—will become standard to support real-time decision making. For instance, semiconductor manufacturer Infineon Technologies has decreased product failures by correlating single-chip data captured in the testing phase at the end of the production process with process data collected in the wafer status phase earlier in the process. In this way, Infineon can identify patterns that help

discharge faulty chips early in the production process and improve production quality.


Impact of Industry 4.0 on Producers

Industry 4.0 will affect the entire value chain from design to after-sales service

Along the value chain, the integrated IT systems will optimize the production processes. As a result of this, today we can see integrated production lines replacing insular manufacturing cells

Physical prototypes will be reduced to an absolute minimum. Through the collaboration of producers and supplier, the products, production processes, and production automation will be designed and commissioned virtually in one integrated process.

Manufacturing processes will increase in flexibility and allow for the economic production of small lot sizes. Robots, smart machines, and smart products that communicate with one another and make certain autonomous decisions will provide this flexibility.

Manufacturing processes will eventually reach to a stage through learning and self- optimizing pieces of equipment that will, for example, adjust their own parameters by sensing certain properties of the unfinished product.


We can clearly see that the industries and countries will embrace Industry 4.0 in different ways at different rates. Industries with a high level of product variants like automotive and food-and-beverage industries are going to benefit generating productivity gains and on the other hand the industries that demand high quality, such as semiconductors and pharmaceuticals, will benefit from data-analytics-driven improvements that reduce error rates. Industry 4.0 will bring a radical change in the manufacturing industry based on how producers and suppliers leverage these nine pillars of technological advancements.