by Breenda Shah

What is Industry 4.0?


 First came the steam-engines in the 1800’s that entirely transformed the textile industry and improved transportation. Next was the introduction of electricity, assembly line and mass production allowing the mechanization of factories. The third industrial transformation came with the introduction of computers and robotics. Machines and robots are replacing humans in the production process. Now we enter industry 4.0, which is the fusion of virtual and real worlds in manufacturing through automation, digitalization and robotics. With the help of the Internet of Things, cyber-physical systems, cloud-computing and other advanced technologies, processes that are normally managed and controlled by people are now completely digitalized. Many refer to industry 4.0 as “smart factory”. There is more to Industry 4.0 than just advanced technologies; it is about how businesses bring together these technologies to drive operations and growth.

Why does Industry 4.0 matter?


 The benefits of adapting to Industry 4.0 go beyond manufacturing and production. It also benefits customers and workers.

Benefits to manufacturers:

In the manufacturing industry, the integration of physical and digital technologies enables businesses to improve their operations, increase growth opportunities and enhance internal as well as external collaborations. The Internet of Things is the widespread connection of physical devices to the internet, creating cyber-physical systems which have the potential to increase necessary visibility throughout the manufacturing process. Necessary visibility refers to the ability to see all units of the production process, allowing organizations to identify key issues in the process and avoid operational and productivity challenges. Cloud-computing can help process, sort and store massive amounts of data analyze it, enabling stakeholders to process information from different sources and make more well-rounded decisions. It can also lead to new business models and enhance the collection of information from customers. This improved interaction with customers can further help businesses to provide customized products, improve quality, improve post-purchase services and get visibility into usage patterns. Industry 4.0 can also connect supply network and logistic capabilities, and the planning and processing of inventory, along with other capabilities, allowing businesses to know more about things that are currently unknown. Though Implementing Industry 4.0 requires a large initial investment, once adapted it can reduce costs drastically, opening doors for growth and enabling businesses to serve larger markets, both nationally and internationally, with higher-margin products.

Benefits to workers:

Industry 4.0 can provide workers with an opportunity to do many more things. As technologies are incorporated in day-to-day production processes, the increased data availability allows workers to work with complex machinery and perform tasks with a more complete understanding of data. There will be new training opportunities for them and a chance to showcase their full potential. The business gains as more motivate workers can take on different challenges and be more efficient. There is also a possibility of creating new roles as well as new innovated products. Another important advantage is that industry 4.0 creates a safer workplace.

Benefits to customers:

Apart from more innovative products with improved quality and customization, customers can also get a deeper understanding of the products as broader data collection enhances their customer experience. Their interaction with the business will help them learn more about their usage patterns and assist in predicting their future products requirements.

Where does Canada stand?


The Business Development Bank of Canada (BDC) studied a group of Canadian small and mid-sized manufacturers and released their findings in May 2017. They surveyed 960 companies, 384 of them from Ontario. Their results indicate that that 39% of Canadian small and mid-sized manufacturers have implemented Industry 4.0 projects; 3% have fully digitalized their production processes and 17% are in process. The study also reported that 50% of these businesses said their operating cost reduced, 42% said their product quality improved and 13% said they had more capabilities to innovate. An example of a company that has implemented Industry 4.0 successfully in Ontario is Siemens. Though these numbers are positive, Canada still has a long way to go.

Graph 1: Showing percentage of businesses adapting to Industry 4.0 in different sectors

 According to the survey, on average, 41% of the Canadian manufacturers invested less than $50,000 in Industry 4.0 related projects, and only 5% of them invested over a million dollars. To encourage more investment in advanced technologies the Federal Government and Provincial Governments provide support through grants and policies to businesses. Recently, the Federal government and the Province of Ontario announced grants of up to $100 million to Linamar Corporation to develop its advanced manufacturing technologies. The Federal Government also provided funding to support research and development projects to 8 Ontario auto part firms.

Adopting to advanced technologies and processes can be very challenging, making it stressful for Canadian manufacturers to implement Industry 4.0. Some of these challenges are costs, cyber-security, technology complexity, data analysis and integration. However, the most important one is a lack of skilled workforce. According to the BDC study 42% of the manufacturers said that the number 1 challenge they face is a lack of qualified employees to adapt to this new industrial revolution. The industry of advanced manufacturing must be supported by access to highly-skilled, educated workforce; without them, advanced manufacturing cannot proceed.

Graph 2: Barriers to implementing Industry 4.0

How can educational institutions contribute?


Educational institutions are key to the development of a skilled workforce. As the rest of the world moves quickly towards the implementation of more-advanced advanced technologies, educational institutions need to make sure they are making the appropriate changes to their curricula to better reflect the future labour demands. A report released in June 2013 by the Conference Board of Canada that studied the cost of Ontario’s skills gap estimated that skills gap cost the Ontario’s economy around $24.3 billion in foregone GDP, as well as $4.4 billion in federal tax revenues and $3.7 billion in provincial tax revenues — annually. Since then there have been many initiatives implemented to reduce this gap. One such example is Seneca College, Ontario. Seneca and Siemens Canada together opened Ontario’s first Mechatronics Stimulation and Demonstration Centre. Mechatronics is the combination of mechanical, electrical and computer technologies used in production and manufacturing. The college now offers a training ground for students to pursue the Siemens Mechatronics Systems certification program. However, gaps continues. Businesses want individuals who are emotionally, spiritually, intellectually, and physically balanced as well as flexible across a range of business operations. Educational institutions should:

1) Continuously collaborate with businesses and make necessary changes to their existing programs, as well as introduce new ones to make sure students acquire the right skills and knowledge needed to implement Industry 4.0. This includes analytical and critical thinking, solving complex problem, communication and leadership, robotics, and new computer software.

2) Make internships, mentoring and collaboration projects compulsory for each program to make sure students gain practical experience and learn how to apply their knowledge outside classrooms.

3) Host industry events where students can see the kind of skills set required by businesses and make the right choices when deciding their programs and courses. As well as, host more events where students can get the opportunity to meet different business recruiters.

4) Invest heavily on research related to Industry 4.0 and better help students to attain the knowledge required to land jobs in this field.

5) Make learning interesting as well as more involved for students rather than increasing the pressure of achieving high academic records.

  • Forbes. “What must everyone know about industry 4.0” 2016
  • strategy + business. “A strategist’s guide to industry 4.0” 2016.
  • The Conference Board of Canada. “The Cost of Ontario’s Skills Gap.” 2013.
  • “Enabling the future of advanced manufacturing.” 2016.
  • BDC – “Industry 4.0: The new Industrial revolution”. 2017.
  • CBC News: Business. 2015. “Canada Manufacturing. “Ottawa invests $41M to support research projects at 11 Canadian auto parts firms.”
  • Deloitte insights. “Forces of change: Industry 4.0” 2017.