Digital transformation

December 7, 2018

Caroline Churchill, partner at Womble Bond Dickinson, looks at the implications for manufacturers by embracing the Fourth Industrial Revolution

Industry 4.0 – or I4 – is the fourth generation of the industrial revolution. The so-called third industrial age saw the introduction of automation in the manufacturing process. I4 looks to build on this by combining automation with big data analytics; sensors are installed in production machinery to measure performance and provide real time feedback that can used to optimise production.

Because I4 is capable of streamlining the performance of existing automated equipment, it has considerable application in manufacturing. Current uses of I4 technology include preventative maintenance resulting in reduced downtime, automated materials ordering and GPS vehicle tracking. However, the greatest benefit of I4 technology is the flexibility and adaptability that it provides to existing equipment enabling it to be utilised in the future in ways that we couldn’t imagine now.

Smart sensors are capable of collecting vast quantities of data, analysing it and using it to make decisions to improve efficiency. Connecting equipment via sensors enables it to communicate with other equipment and use data collected from other sources to make decisions. The ability to facilitate machine to machine communication enables autonomous systems to become less reliant on human judgement.

I4 encompasses various technologies, but some are fundamental. The Internet of Things involves embedding devices in equipment to allow it to be connected via a computing network. Sensors are fitted to the equipment to capture performance data which is then shared over the network. Cloud technology provides a platform for the storage of vast amounts of data and the real-time exchange of data necessary to facilitate machine learning. Artificial intelligence uses the concept of machine learning to analyse data and make decisions. As more data is generated, the machine is capable of making adjustments to improve the performance of systems.

From a legal perspective, I4 makes businesses the target of a host of risks. Equipment that was previously ‘off the grid’ is now connected. This makes security challenging and systems vulnerable as the threat of cybercrime increases. Manufacturers need to ensure that appropriate protection is implemented to reduce and manage these risks. Where personal data is processed, then additional precautions need to be taken to ensure compliance with new (and more stringent) data protection laws.

Where new technology is being introduced or linked to existing technology, the process around integration and acceptance of that new technology is key. Adequate protection will need to be built into any agreement with suppliers of smart technologies. Developing internal processes and governance structures to identify and manage risk to support the digital journey are also important.

However, despite these risks, I4 is the here and now. Those manufacturers who embrace digitisation to develop as smart factories will help futureproof their business, potentially avoiding the fate of those in the past who didn’t evolve fast enough.

Womble Bond Dickinson

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