Here are the Things You Should Know
June 14, 2024 | Blog
How does your business ensure its competitive edge in an industry where the market is always competitive? The manufacturing industry is one of the biggest sectors that contributes to economic growth for any country. Many economic experts believe that manufacturing is the backbone of all institutions as it transforms raw materials into finished goods like everyday essentials such as soap, conditioner, and toothpaste to food like canned goods, noodles, shoes, clothes, etc. Even materials and products you need for work, like phones, laptops, and telephones, were all manufactured somewhere before it was sold to you.
However, having a solid manufacturing partner who offers quality products and adheres to the agreed deliverables earlier or on time is not easy to find. Over the years, the manufacturing industry has undergone several industrial revolutions to keep up with demand and adapt to ongoing change, and currently, it’s in its Fourth Industrial Revolution, or 4IR, commonly known as Industrial 4.0.
Here are the Things You Should Know
- What is Industry 4.0 in Manufacturing?
- State of Manufacturing Industry
- What are the impacts of Industry 4.0 on the future Manufacturing Sector?
- Let’s Venture the Industry 4.0 Together
What is Industry 4.0 in Manufacturing?
Before we deep dive into what Industry 4.0 is, let’s discuss the first three revolutions. In the McKinsey & Company shared article, What are Industry 4.0, the Fourth Industrial Revolution, and 4IR?, they explained that aiming to develop to be efficient and cost-effective is what industrial revolution over centuries, citing that even today, it’s the same principle that holds true. “Steam propelled the original Industrial Revolution; electricity powered the second; preliminary automation and machinery engineered the third; and cyber-physical systems—or intelligent computers—are shaping the Fourth Industrial Revolution,” they said. “Industry 4.0—also called the Fourth Industrial Revolution or 4IR—is the next phase in the digitization of the manufacturing sector, driven by disruptive trends including the rise of data and connectivity, analytics, human-machine interaction, and improvements in robotics.”
Also read: Debunking Myths and Providing Facts: Why Technology is Important in Your Business
State of Manufacturing Industry
Although the manufacturing industry is on the verge of the new dawn of technologies, there are still a lot of hurdles as to why Industry 4.0 is still at its early stage, this includes what kind of manufacturing business you have, what industry you cater to, what country you’re in, and policies and compliances you need to follow. In the Philippines, manufacturing is the largest industry sector in the Philippines based on gross value added (GVA) as shared by Bobby Batungbacal in his shared story.
He explained the country has potential, yet many untapped divisions of manufacturing still need support. “The Philippines manufactures a wide range of products across 21 divisions. The largest is food manufacturing with 47.6 percent share, chemicals at 12.5 percent, and computer, electronics semiconductor at 11.2 percent,” he said. “Knowing that we have a sizable, growing, and increasing complex manufacturing sector today, where should we go, and how should we get there?”
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In the ASEAN, neighboring countries like Indonesia have set economic investment goals for 2030, and the manufacturing sector is at the heart of these goals. Today, the Indonesian manufacturing sector contributes 20 percent of GDP. Meanwhile, the Malaysian manufacturing sector is booming, especially in the semiconductor area, where the US is looking to outsource manufacturing to the country. On the other hand, Singapore managed to “double its manufacturing economic revenue for the last fifteen years,” yet the country faces stiff growth from 2023 to 2024.
What are the impacts of Industry 4.0 on the future Manufacturing Sector?
As manufacturing shifts toward the future, the impact of Industry 4.0 is still at a stage where only a few have successfully implemented it and harnessed its power. Industry 4.0 is a promising part where manufacturing and technology meet and complement each other. In the same McKinsey report, they shared the four foundational types of disruptive technologies that add value to the overall supply chain of manufacturing.
- Connectivity refers to connectivity, data, and computational power. It also stretches in the digital realm of cloud technology, the Internet, blockchain, and sensors.
- Analytics and Intelligence go hand in hand to provide advanced analytics, including machine learning and artificial intelligence
- Human-machine interaction bridges and amplifies what human skills can do to harness the power of technology, from virtual reality (VR) and augmented reality (AR), robotics and automation, autonomous guided vehicles
- Advanced engineering helps additive manufacturing (such as 3-D printing), renewable energy, and nanoparticles
These four fundamentals of Industry 4.0 shape the manufacturing industry slowly but surely. In 2018, the World Economic Forum and McKinsey tied up and launched the Global Lighthouse Network (GLN), which aims to monitor organizations and technologies implementing and under the Fourth Industrial Revolution. “A lighthouse (in this context) is a manufacturing site that has successfully implemented 4IR technologies at scale, with a significant operational impact,” they said. “Technology, however, is only half of the Industry 4.0 equation. To thrive in the Fourth Industrial Revolution, companies must ensure that their workers are properly equipped through upskilling and reskilling and then hire new people when necessary.”
Also read: Tech and Business Insights for 2024
Let’s Venture the Industry 4.0 Together
As Industry 4.0 takes over the manufacturing industry, the future remains vulnerable as most companies stay in the pilot purgatory state. McKinsey defined pilot purgatory as where a business, organization, or any company invests in new technology to implement new technology under Industry 4.0 yet fails to succeed in implementing, maximizing, and scaling its use, leaving the business in a stalling state and losing its investment in the process. At its core, lighthouses (those who successfully implemented the transition to Industry 4.0) show how intricate it is to have clear business goals for your company and the right investment technology that fits your manufacturing business. IT Group, Inc. has been the leading IT Solution Partner in the Philippines and the ASEAN Region and an ISO 9001:2015 Certified company with four regional offices located in the Philippines, Indonesia, Singapore, and Malaysia, helping 200+ clients across the ASEAN region on their digital transformation journey and has a solid portfolio of 250+ successful projects.
Also read: Jop Cornelio Jr., ITG’s Managing Director, is The Man for The Job
With the ongoing transition of manufacturing businesses toward Industry 4.0, it’s crucial to have a trusted partner and technology to rely on. With over 21 years of expertise in the tech industry, ITG, along with its technological partners, can help you and your company get proper guidance and advice when it comes to solutions that are fit for your business goals and needs, from upskilling and training employees, ensuring compliance and sustainability to risk-mitigation and crisis response and sustainability, all of these will help to the flow of supply chain to be efficient and cost-effective.
Learn more about how we can help you today.
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