Digitalisation is changing the manufacturing world as we know it. Organisations are challenged to transform relevant existing processes and operations, from the organisational culture, technology and factory operational processes, to supply chain, product life-cycle management and addressing changing customer needs. Digital transformation requires serious commitment for a reason: It can help create new revenue streams and ultimately secure your place in the global digital manufacturing market. So, where do you start, and how do you fully leverage the potential of Industry 4.0?

To answer this question, I will take a closer look into the trends in the production environment (vertical integration), the surrounding ecosystem (horizontal integration) and the long-term view (sustainability).

Vertical integration: Digitalising production

Fully connecting all the production processes in your factory is key. Vertical integration is all about gaining control and transparency over the entire in-house production process. How can we operate the factory shop floor more efficiently?

Start with the information technology/operations technology (IT/OT) convergence. This new Industry 4.0 trend means connecting the two, which so far have been separate departments. Now these departments need to start talking to each other to create transparency, flexibility and automation along the production process. In addition, physical objects enriched with intelligent software, called cyber physical production systems, enable the communication, so the intelligent products and machinery connect, “talk” to each other and become interoperable.

With IT/OT convergence, a manufacturer can input production requests in the IT system that can control the OT and arrange the production environment according to the specific needs. For example, products can be designed to be aware of the manufacturing process so they can alert the machine when it should turn on. The result is a digital shop floor with fully transparent processes and greater flexibility to adapt production tasks to changing customer demands.

Horizontal integration: A collaborative supply chain

Once you’ve connected things internally, it’s time to focus on the wider network. Industry 4.0 waves goodbye to the linear supply chain. Supply chains are becoming interactive networks that enable ecosystem participants to communicate with one another in a more collaborative, agile and ad hoc manner. The interactivity opens a window for more direct and frequent customer collaboration with all levels of upstream suppliers.

In this context, we see a rise of collaborative manufacturing-focused platforms. They aim to provide a central point to consume services, connect manufacturing capabilities (manufacturing as a service) and manage a collection of factories. Manufacturing as a service is accelerating collaboration, since manufacturers can connect in minutes with potential suppliers that could provide extra machine capacity and sub-produce certain parts.

Many manufacturers are also pushing into another direction: offering platforms for new services connecting the smart products with the machines and gathering internet of things (IoT) data. Manufacturers are establishing such platforms, which allow independent service providers to develop and share new services that connect products, factories, systems and machines, and then harness the data from the smart products.

Sustainability: The digital life cycle needs more care

Industry 4.0 calls for care of the product throughout its life cycle. Products are no longer only physical; now they are equipped with smart software components. While the physical part remains the same, the software components need to constantly adapt to external changes. This includes software updates, monitoring to prevent and avoid malfunctioning, updating APIs to ensure interoperability with other products, as well as protecting the product from potential cyberattacks.

Another key issue is having an “after-life” strategy. Having all the information on the materials used is vital so their up-cycling and recycling potential can be identified. Smart products use rare and expensive minerals and materials that can be reused. A great example is the International Material Data System (IMDS) platform in the car industry. IMDS collects, maintains and analyses information on all materials used by car manufacturers globally. It allows materials and their chemical composition to be tracked, which helps parts and materials to be reused.

With new opportunities come new challenges. Curious to learn how you can deal with the new challenges in digital manufacturing? Stay tuned for my next article, which is about Startup Autobahn, one of Europe’s largest innovation hubs, providing solutions for emerging manufacturing and automotive trends.