Industry 4.0 will be driven largely by the convergence of digital, biological, and physical innovations, building on the global availability of digital technologies — an outcome of the Third Industrial Revolution.
In fact, the ongoing COVID-19 pandemic has accelerated these technological advancements and their adoption for the need for human survival and sustenance.
The emergence of Industry 4.0
Industry 4.0 incorporates digital technologies like IoT, AI, cloud computing, blockchain, big data, AR, nanotechnology, etc., with manufacturing, supply chain, distribution, customer service, and performance of the physical-digital-physical (PDP) loop, among others.
While some of the common benefits are efficiency, cost-cutting, and profit-maximising, companies that succeed are those who fully understand and utilise the technology to help them in all areas of their business, including overall business strategy, workforce and talent strategies, societal impact, and operations.
The increasing use of digital devices inside factories and out on the field means maintenance professionals can access equipment documentation and service history timely, and at the point of use.
In short, Industry 4.0 brings in revolutionary changes across industrial and non-industrial environments.
It shifts manufacturing from a centralised to a decentralised model, symbolising an impactful transformation from the traditional approach to a more dynamic and flexible manufacturing environment.
How Industry 4.0 transforms business?
Industry 4.0 is about the significant transformation taking place in the way goods are produced and delivered — bringing in collaboration and synergy of various physical assets with technologies.
However, digital transformation only makes sense if it supports an organisation’s overall strategy and not certain silos of functions or processes.
Digital transformation impacts the entire value chain in the following manner:
- Delivery and customer service: Personalised customer experience, outcome-based revenue models
- Corporate operations: Performance benchmarking, supply chain visibility and planning, process engineering, continuous improvement, and workforce transformation
- Plant engineering: Integrated information and control systems, universal connectivity, and converged information technology (IT) and operational technology (OT) networks
- Procurement supply chain: Supplier visibility, track, and trace
- Maintenance and reliability: Asset health monitoring, predictive maintenance, field workforce effectiveness, environment, and health and safety management
- Manufacturing operations: Shop-floor workforce flexibility and efficiency, automated touchless factory quality assurance, compliance and analytics, energy monitoring and management, and real-time operational intelligence
Industry 4.0 opportunities for startups
Many companies — both large established companies and SMEs — may not have a full understanding of Industry 4.0 technologies and feel unsure of where to begin the digital transformation.
They may also not have all the required skills and expertise available internally, thus paving the way for collaboration with the right people outside of their company.
Startups can serve as particularly effective and innovative collaborative partners. Many large corporations already work with startups in Industry 4.0 and view them as integral partners in their journey towards business transformation through digital transformation.
Most businesses are beginning to try to find a balance between profit and purpose, thanks largely to increased pressure from customers, employees, and other stakeholders.
This means that business transformation is not just about increasing the bottom-line but enhancing the entire value chain impacting all the stakeholders.
Capabilities through startups
Startups can bring unique added value to businesses in several ways. First, startups can offer increased flexibility and customisation to manufacturers at a significantly lower cost than those offered by more established technology companies.
Secondly, startups have a multidisciplinary team of entrepreneurs who have worked on developing the technology and implementing it, enabling them to provide end-to-end solutions.
They know the new technologies and are simultaneously hands-on making it a winning option for companies on digital transformation pursuit.
Finally, given their smaller size, startups can be more agile and responsive to changes in the ecosystem and can adapt to larger platforms and the individualised needs of clients.
Industry 4.0 has the inherent potentials of unlimited opportunities for startups, especially tech startups, though not strictly limited to them.
Companies, particularly manufacturing companies, need to take advantage of the technologies to remain efficient and competitive. The digital transformation roadmap may not be the same for every company even within the same industry, but the solutions may be a combination of various Industry 4.0 technologies based on the business needs and pain points of that particular company.
IoT platforms and connectivity, cybersecurity, sensing and imaging, and operations optimisation are the segments that have most consistently attracted the largest chunk of venture capital funding in the last few years.
These four segments received about 60 percent of the total $6.6 billion raised from VCs globally in this period (see figure 4).
Industry 4.0 VC Funding
Win-win for enterprises and startups
It is a win-win situation for both enterprises seeking help in their business transformation journey and the startups who have the capabilities to help them.
A recent survey by Deloitte identified IoT, artificial intelligence, cloud computing, and big data and analytics are the top four technologies, which business leaders anticipate to have the greatest impact on their organisations.
However, differing views and studies also point to different technologies as hot targets to chase.
In fact, four key technologies are enabling Industry 4.0.
- The combination of data, computational power, and connectivity
- The analytics and intelligence
- The Human-machine interaction
- The physical-digital-physical conversion
The combination of these technologies and new technologies emerging and evolving is going to change the future of manufacturing in the next few years.
In recent years, Indian startups have catalysed the digitalisation of SMEs across the country. A recent study forecasts that Indian SMEs will spend around $14-16 billion annually on digital technologies, and a major portion of this spending might go to startups.
India has one of the youngest populations in the world, and the already burgeoning startup environment is helping the country address the inevitable effects of technology on employment.
A dynamic startup ecosystem has a pivotal role in fuelling innovations to help job creation. Industry 4.0 may threaten businesses large and small. However, when your business’ survival hinges on the ability to innovate, it will be those that push new boundaries and encourage others to do the same that succeed in the modern business landscape.
Startups should explore the needs of the market to play a crucial role through collaborating with companies looking for help in transforming their business, leveraging technologies to stay competitive.
(Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the views of YourStory.)