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Industry 4.0: The next industrial revolution demystified

It's the next phase in the digitisation of the manufacturing sector

Deepti Chaudhary
Published: Feb 10, 2016 06:23:48 PM IST
Updated: Feb 10, 2016 06:37:50 PM IST
Industry 4.0: The next industrial revolution demystified
Image: Mexy Xavier
Daniel Pacthod, director, McKinsey & Co

There has been much debate and discussion about the industrial world being revolutionised by technology, but what does this really mean? How will the future look like if we fast forward to 2025? What large, new business models, opportunities and ecosystems will develop as a result of Industry 4.0 (or the fourth industrial revolution)? Daniel Pacthod, director, McKinsey & Co, helps us understand what it could mean.

But let’s first understand what .0s mean. To put it broadly, industry 1.0 was about manufacturing; 2.0 was about automated manufacturing; 3.0 was information based and with 4.0, we are at the cusp of it; it refers to all things driven by digital. Industry 4.0 is the next phase in the digitisation of the manufacturing sector, driven by four disruptions: The astonishing rise in data volumes, computational power, and connectivity; the emergence of analytics and business-intelligence capabilities; new forms of human-machine interaction such as touch interfaces and augmented-reality systems; and improvements in transferring digital instructions to the physical world such as advanced robotics and 3D printing, according to a McKinsey article titled, ‘Manufacturing’s next act’, published in June.

“The industrial sector is set for a massive transformation,” said Pacthod at the 24th edition on NASSCOM India Leadership Forum 2016 in Mumbai on Wednesday.

So what is different today? There are several aspects that will assist in the graduation to the fourth industrial revolution:

  • The amount of data available is unprecedented, we are 10 times more connected through devices and networks like Internet of Things are leading to the generation of more and more data.
  • There is clearly an ubiquitous connectivity throughout the supply chain with pervasive sensing and actuation.
  • Data analytics are helping in driving efficacy.

What will the industrial companies look like in 2025? We may see the following:
  • Mass production realised without waste on the back of analysis.
  • Process would be reinvented through advanced analytics.
  • Physical footprint could be redefined on the basis of when and where it’s needed.
  • Rethinking physical and digital design on the back of data and analysis.

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