The move to Industry 4.0 continues to gain momentum, and 2020 will be a pivotal year for the evolution of Intelligent Manufacturing. Advancements in technology, coupled with the rising costs associated with labor and raw materials, will be the biggest drivers of change. Many manufacturers will continue to move further on their digital transformation journey to become true Industry 4.0 leaders. Here are what we think will be the 5 biggest issues for manufacturers this year.
Stabilizing Contribution Margins
Contribution margins remain a top-of-mind topic as the cost of labor and raw materials continues to rise. A recent Wall Street Journal article, highlights the struggles manufacturers face with both finding and retaining members of their workforce as companies are not only paying higher wages but offering up to $5,000 in relocation benefits. Add in the rising cost of energy, which has more than doubled since the year 2000, and contribution margins can significantly decline.
The good news is that Industrial AI solutions allow manufacturers to track energy usage, and in turn, adapt production to improve efficiency without sacrificing productivity. For example, if the temperature and humidity within a factory increases, Industrial AI solutions can recommend new settings that maximize both quality and output to drive greater efficiency. The resulting increase in contribution margins means intelligent manufacturing solutions will play a pivotal role in profitability for 2020.
IoT Becomes Less Complex
You’ve been hearing about IoT for years, but this year it will become a staple in manufacturing as the returns continue to rise. According to a 2019 Manufacturing Trends report, companies that invest in intelligent manufacturing will see a 7x higher rate of annual efficiency improvements.
The complexity of integrating IoT-enabled components into existing industrial technologies and components has been a roadblock in the past. However, both IoT hardware and software have improved significantly over the last few years. Industrial AI and other intelligent manufacturing applications are now much better at integrating with existing systems to provide an enhanced experience.
For companies that haven’t yet welcomed IoT into their manufacturing environments, 2020 will offer improved opportunities to connect their plants, providing for better insights, better data capture, and improved OEE.
Computing Returns Right to the Edge
In Industry 4.0, speed counts. The massive amounts of data required for Industrial IoT and the crucial importance of minimal lag mean that manufacturers are looking for data processing as close to their facilities as possible.
In 2020, we will see an increased number of companies looking to implement Edge computing in a bid for improved efficiency. Edge computing allows factories to run complex algorithms locally, which minimizes wait time for mission-critical systems. In fact, Gartner predicts that data processed at the edge will increase from the current 10% to 75% by 2025.
Edge computing is the final piece by allowing a seamless hybrid strategy so facilities can continue to invest in connected systems. These systems will lay the groundwork for future application development and should be top of mind for all factories in 2020.
5G and Smart Manufacturing
One of the biggest roadblocks to Industry 4.0 digital transformation has been the lack of fast and reliable connectivity. 5G holds great promise as the answer. 5G wireless enables enterprises to connect to networks directly, bypassing corporate networks. This provides the low latency and consistency required for Industry 4.0, which enables faster and better data collection. That, in turn, supports enhanced data analysis for improved industrial efficiency, precision, and output and more effective insights.
While 5G will reduce the overall load on current networks; it also has the potential for fragmentation, and concerns about network attacks because the direct connection may increase vulnerability. Which leads us to:
Industry 4.0 Security
Security will continue to be one of the hottest topics of 2020. For manufacturers investing in intelligent manufacturing, security is a crucial consideration because with each connected facility comes with the risk of cyberattacks. To proactively ward off an attack, manufacturers must have a defensive cybersecurity mindset and implement security technology that will protect their entire company, including equipment, IP, operations technology, and data. Manufacturers should create a security profile for every component in their facilities, ensure that the security software is updated regularly, and create back-up plans in case a security event does occur.
Manufacturers can also limit their exposure by reducing the number of devices when streaming data to the cloud. For example, instead of having each sensor or each machine within a facility connect directly to the cloud, connect them to an Edge device that consolidates all factory data and streams the information to the cloud via a single point.
Some companies have taken a cautious stance regarding Industry 4.0 and digital transformation but 2020 will be the make-it-or-break-it year for getting on board and retaining competitiveness.
Not sure how to get started? Join us for an exclusive webinar with industry veterans as they discuss how Industrial AI can optimize your OEE.