Our columnist presents Industry 4.0, which has the potential to transform the chemical industry in unimaginable ways. Though the principles are clear, the opportunities and risks are yet to be fully grasped. Among the challenges to usher this revolution is the fear of cyberattacks and the lack of trained manpower.
The 4th Revolution
25 Years ago, acquiring authentic technical information was a herculean task. Firstly, we needed access to a good library that stocked journals covering topics of our interest. Having located the desired information, we had to leverage our influence and contacts to either borrow the journal or photocopy the relevant pages, the illegality of which never crossed our minds. Today, by the time you have read the preceding lines, Google would have thrown up results to your query. We take this remarkable transformation for granted, scarcely giving a thought to the underlying technology that is responsible for it. The suite of digital tools and technologies that are currently under various phases of trial and deployment have a similar power of altering our world unrecognisably in the decades to come.
Over the last 20 months, this column has repeatedly drawn the attention of readers to the power of some of these digital technologies. For example, Virtual Reality (The New Reality, January 2018) has the potential to transform education, research, design, construction, training, operation and maintenance in chemical industry. We examined the hype generated by Internet of Things (Things on the Internet, February 2018), wondering whether the industry has the ability to extract meaningful information from zettabytes of data generated by billions of devices. The disruptive and still little – understood technology of Blockchain (Unchaining the Blocks, December 2017) offers a platform of trust and transparency that can decongest the long and often complex supply chain of the chemical industry. Artificial Intelligence (AI+CI = ??, August 2017) holds the promise of new business model for the chemical industry, among a slew of other goodies.
The technologies described above, together with some more like Cloud Computing, Big Data Analytics, Robotics and 3D Printing constitute the 9 technological pillars of what is being touted as Industry 4.0, or rather Industrie 4.0, a strategic initiative by Germany to establish itself as a leading provider of advanced manufacturing solutions. Industry 4.0 involves real-time, intelligent integration of people, machines and objects to dynamically manage complex systems. The objective of such “smart factories” is to enhance resource efficiency – material, energy and manpower. Some of the benefits are pretty obvious. For example, enhanced predictive maintenance of machinery that will almost eliminate wasteful downtime and also improve the asset longevity. Other benefits are not easy to comprehend without tangible examples. For example, integration of customers and suppliers in an interactive and collaborative way to provide novel products and solutions–say, highly customised batches of specialty chemicals for individual customers.
The key objective of Industry 4.0 is to lower costs through operational excellence. Through measurement and monitoring of a large number of variables it is possible to optimise processes to a degree and level of sophistication that has not been possible hitherto. This will enhance production efficiency and also improve product quality. Process and product faults will be kept to an all-time low if not completely eliminated. Like processes, the entire supply chain will also be streamlined. This will improve flexibility in a competitive and volatile market. By tracking the product through its entire lifecycle, it will be easier to anticipate the requirements of the customer and respond faster. It will be possible to produce the exact products that customers need and deliver them exactly when they want.
Industry 4.0 is expected to have far-reaching consequences on business models – changes in existing models and emergence of new models. It has the power to transform a commodity business into a solution provider. A company manufacturing paints, for instance, will morph into a solution provider for surface protection. The paint will no longer be sold on weight basis but on the duration of its protective performance. The new business model thus uses data-based value creation and propositions. There is a clear transition from offering product to providing solution.
The shift from product to solution creates a new opportunity for strategic differentiation and unique selling proposition in a highly competitive market. Data is the vital ingredient as companies fight to offer highly customised solutions. Intense and trustful relationships with customers are the key to success in such a model.
Along with offering opportunities Industry 4.0 also poses challenges. The biggest of them is cyber security. The high degree of data transparency that is intrinsic to Industry 4.0 makes businesses vulnerable to industrial espionage and cyber attacks. This is perceived as a huge deterrent by many companies. At the same time Industry 4.0 creates an ecosystem that facilitates entry of competitors, who can stifle the established players by offering novel products and smart platforms. This dynamic reshaping of industrial boundaries will leave behind the old who dither and reward the new risk-takers. The biggest challenge for the adoption of Industry 4.0 comes from the employees, most of whom are not equipped, either technically or psychologically, for this hugely disruptive change. This is especially true for the management level personnel who are responsible to drive the change, as a significant number of them have completed their education in the pre-Internet era. But with the baton passing on to the younger generation, this is bound to change rapidly.
Industry 4.0 was intended to usher the fourth industrial age powered by digital technologies. Though originally designed for manufacturing industry, the principles of Industry 4.0 are equally amenable to the chemical industry, especially the specialty chemicals sector, where knowledge is king and batch processing is the norm. SMEs which rule this sector are fragmented and fiercely competitive. Industry 4.0 will help them gain significant cost and market advantage.
The chemical industry is a notorious laggard when it comes to embracing digital technologies. However, some elements of Industry 4.0 like process simulation, automation and advanced process control are already being practiced for decades. To hasten the process of digitalisation, we need to change the mindset of people and infuse fresh blood. And we can begin this process by imparting the necessary interdisciplinary skills in colleges. Not everyone understands the opportunities and risks of this fourth industrial revolution, but that shouldn’t deter us from taking baby steps towards a brave new world.