Welcome to Industry 4.0, a term coined in 2011 by Henning Kagermann, the head of the German Academy of Science and Engineering. This new fourth wave is powered by advancements that include smart manufacturing, robotics, artificial intelligence, and the Internet of Things (IoT). It propels industry leaders to work more efficiently while giving product designers more control.

At the same time, this shift will drive the need for smart automation further, says François Barbier, president of Global Operations and Components at Flex, a global design, engineering, and manufacturing leader. Flex knows firsthand how companies are adopting IoT solutions.

All over the world, from automobiles to consumer goods to chemicals, integrating the IoT into manufacturing is not only under way but already proving to be cost-effective. While the current supply chain system consists of several steps—marketing, product development, manufacturing, and distribution—that occur independent of one another, smart manufacturing could streamline the time, effort, and communication between each step, creating faster and more reliable service.

For many companies, operating in this new paradigm will require support. "The way we are designing products today and the way we are getting information from our customers have changed dramatically. The data that informs how we design our products can be much more or much less prescriptive depending on the customer," says Barbier. He explains that Flex still has traditional customers who are very prescriptive—Flex offers these companies the service of making those products and materials, and delivers those products to customers. "But now we have a new set of customers coming to us with a sketch of a product idea. They're asking Flex to design it. For us, this is driving a need for new ways of working, new processes in the manufacturing space."

So what skills must manufacturing leaders possess to find success in Industry 4.0?

1. Seeing Around Corners—in 360°

New tools allow companies to create and test situations in the virtual world. Given that ability to transform design and production, virtual reality is being adopted by more companies. Simulating the product-creation phase helps cut down on manufacturing time, and that means companies are able to get a more realistic version of what they want. Flex is utilizing augmented reality solutions for technical remote assistance, which allows users in distant locations to connect with each other through a live view.

2. Viewing the Fourth Wave—in 3D

Also making a mark in the manufacturing world is 3-D printing, which allows for the seamless creation of tangible products using a single machine. Barbier says that this is "a fundamental change, because if you're adding material, that gives you a lot more possibilities for how you design the part." Three dimensional printing can also reduce waste by recycling plastic and cut down on the wait time for replacement parts and transportation. In addition to these consolidation and scrap benefits, additive manufacturing also offers many other benefits, including precision material placement, significant time and cost savings, and the ability to decentralize the manufacturing of basic parts by providing services closer to end markets. These benefits allow for a vertically integrated supply chain in Flex's operations.

"While the current supply chain system consists of several steps occurring independently, smart manufacturing streamlines the time, effort, and communication between each step, creating faster and more reliable service"

3. Advanced Manufacturing—on Autopilot

Automation is another vital aspect of the industry's future. According to Barbier, a significant portion of Flex's manufacturing processes are already fully automated.

New robots that are more agile, skilled, cheap and safe could decrease labor costs. The Wall Street Journal reported, "The latest [robot] models entering factories and being developed in labs can work alongside humans without endangering them and help assemble all sorts of objects, as large as aircraft engines and as small and delicate as smartphones. Soon, some should be easy enough to program and deploy that they will no longer need expert overseers."

4. Building Intelligent Factories—in the Cloud

Beyond robotics, AR, and VR, factories are becoming more savvy with cloud computing and smart sensors, retrofitting older equipment with the latter and installing them in newer machines. IoT functionality can track and analyze production quotas, consolidate control rooms, and create models of predictive maintenance. Machines could increasingly be able to self-report problems, provide insight on ways to improve efficiency, and generate feedback on product functionality and consumer usage. The three main applications of industrial analytics in the near future will be predictive and prescriptive maintenance of machines, consumer marketing-related analytics, and the analysis of product usage in the field. The report also found that companies using these analytics increase their revenue, customer satisfaction, and product quality while optimizing their supply chains.

5. Robots on the Rise— Managed by Humans

Building a better manufacturing sector with augmented and virtual reality, robotics, and data analysis using smart equipment naturally raises an important question: What will the Industry 4.0 workforce look like? "The vast majority of automation technology will not outright replace humans; instead, it will simply make their work more efficient," wrote Jim Rock, the CEO of the vision-guide industrial vehicle company Seegrid, in TechCrunch last year.

Barbier notes that the bulk of automation is used for work that would be considered unsafe, too imprecise, or simply impossible for humans to perform, such as those that involve toxic fumes, extreme temperatures, or that demand an acute level of precision.

This makes robots a complement to, not a replacement for, human workers. Because of robots, "we'll be able to increase our output," he says. "The jobs that are going to be taken over by automation are actually going to be replaced with additional product volume and categories. We will need people who are able to manage the robotics, to program them, and maintain them. You'll have to take care of the information that you're going to get out of this automated equipment and interpret what you can do with that information. I believe there are a lot of different categories of experts and skilled people we'll need for designing, building, and using the automation."

Designing useful algorithms and software that capture, process, interpret, and predict information is key to success in the digital manufacturing age. Flex is already utilizing these kinds of complex tools to inform procedures in the U.S. and abroad. It's a change that will necessitate new kinds of training and educational programs, but as the IoT has already been influencing enterprise in fields such as medicine and business, it's not hard to imagine that the manufacturers of the future will readily prepare workers for the challenges ahead.

Looking Ahead

Industry 4.0 faces several hurdles before it can truly take hold globally. Security breaches are one of the top concerns for companies innovating in the manufacturing sector, and keeping up with the security requirements that come from collecting vast amounts of data is no small task.

The smart manufacturing infrastructure— which includes hardware, software, algorithms, maintenance, and training—will likely undergo significant changes. A feature in Strategy + Business titled "A Strategist's Guide to Industry 4.0" reported that "making Industry 4.0 work requires major shifts in organizational practices and structures. These include new forms of IT architecture and data management, new approaches to regulatory and tax compliance, new organizational structures, and most important—a new digitally oriented culture, which must embrace data analytics as a core enterprise capability." Based on the successes and integrations already occurring, however, it seems that the industry is up to the challenge.

With increased efficiency, more jobs, and growing profits, the future of American manufacturing is looking bright. As our machines move into a more complex age, so do our workers and products, symbiotically growing into a new era of production.