From Industry 4.0 to Commoditized Manufacturing

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What I want to share with you in this post is a different way of thinking at Industry 4.0 and its future development (you may call it a vision) that probably many of you may read as a shock at first sight. It would be a very normal reaction as it was mine when this idea came up to my mind for the first time.

I’m not a professional writer or a journalist (and even I’m not writing in my native language) but, even if I did not find similar ideas in my preventive little researches, I’m so convinced about my thoughts that I’m writing to articulate this concept and to understand if someone around the world has already read or written similar theories. In this case, I will be happy to get in touch with in order to share thoughts, ideas and keep on walking together the way we have in front of us.

Starting from Manufacturing 1.0, and even before, you may consider manufacturing processes as part of the competitive differentiation where some of the “secret source” was embedded in the production process rather than the product itself.

What is happening with Industry 4.0 is going to definitely change this area of differentiation, bringing the competition at a different level while minimizing/flattening out the differences/differentiation in the production processes. In addition to that, the very high level of automation in the factories and in the industrial processes that Industry 4.0 will achieve (with Robots, automated machines, 3D printers, complex and interconnected control processes, etc), will definitely bring to factories almost completely automated with very few, if not none, human intervention and with the possibility to be remotely operated.

Can you see this scenario? If we consider the amount of money that USA, Europe, Japan and China are putting in the Industry 4.0 revolution and looking at public speeches, conferences, applied researches around this forth industrial revolution, I might say that it is very likely to happen.

At this point, the question that came out to my mind was: what’s after?

In my professional experience, I have already lived this type of phenomenon to happen to other business processes like Accounting, Procurement, HR Management, Information Technology too. When the business processes become only a repetitive set of actions or procedures there is a very limited value to be saved or protected. The problem becomes the streamlining and cost optimization of the process. In other words, the process itself becomes a “commodity”.

This fourth industrial revolution (or if you prefer the Industry 4.0 development) and the derived very high level of “industrial manufacturing automation” will rapidly turn manufacturing processes to be considered as a commodity. As per the other industry revolutions, from 1.0 onwards, this concept could be considered a nightmare in terms of jobs losses and unemployment rates but, how manufacturing will look like in 10 or more years ? Well, probably this is the most interesting part of my conceptualization and the very good news in my opinion; nothing new compared to what happened in other industries/services but really fascinating if applied to global manufacturing at large.

Just like what happened in recent years to transportation industry and/or other services (e.g. distribution of energy), the manufacturing processes will be based on a global, reliable and credible network of interconnected and well governed “manufacturing centres” that will include software platforms, industrial assets, operational processes and their related resources and skills.

These manufacturing centres will be multi-industry (serving from fashion to bio-medical or from spare parts to jewelry), multi-products (same machines will produce highly different products with different materials), interconnected (to optimize workloads together with proximity production criteria’s) and capable to: [1] host any number of references and associated quantities to produce; [2] anticipate and ensure material availability; [3] minimize logistics/transportation costs (also duties in some cases); [4] bring productions back to the countries where the consumptions volumes are (West vs Far East) recovering local jobs and optimizing the balances between consumptions and local socio-economical wellness.

In a single representation: imagine the manufacturing power distributed as per the electricity through an electric plug once you have signed a service contract with the electric company in your own city.

Industrial manufacturing power and capabilities will be “distributed” as a continuous business service (B2B scenario) through a global and governed network of multi-product and multi industry manufacturing centers, working under a contract-based service level agreement. Actual product companies (the “Brands”) will continue to design products, execute sales and marketing but will increasingly outsource manufacturing execution to the global manufacturing network players. Manufacturing will be re-modelled to a pure on-demand and fully personalized process with minimal or zero stocks level over the retail chains (similar to a just-in-time execution) and with a number of new skills and activities to manage the overall production and selling process.

Do you still think that Industry 4.0 or Additive Manufacturing are just a matter of new technologies to be included in your factories?

 

Author

Ubaldo Concilio

CEO and founder

Opera Fabri Industries ltd

125 Wood Street, London, EC2V 7AW

linkedin:  https://www.linkedin.com/in/ubaldo-concilio-2b6214/

web:  www.ofindustries.com


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