STID1103 COMPUTER APPLICATIONS IN MANAGEMENT (A172)

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THE INDUSTRIAL REVOLUTION

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TABLE OF CONTENT

Table of Content 3
Table of Figure 4
Introduction 5
THE HISTORY BEHIND INDUSTRY 4.0 6
A. The First Industrial Revolution 6
B. The Second Industrial Revolution 6
C. The Third Industrial Revolution 6
D. The Forth Industrial Revolution 7
- Cyber-Physical Systems 7
- The Internet of Things (IoT) 7
Challenges facing Industry 4.0 8
Impact of Industry 4.0 9

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TABLE OF FIGURE

Figure 1: Industrial Revolution 6

Figure 2: Impact of Industrial Revolutions 4.0 9

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INTRODUCTION
Industry 4.0 is a term often used to refer to the developmental process in the management of
manufacturing and chain production. The term also refers to the fourth industrial revolution.

The term Industry 4.0 was first publicly introduced in 2011 as “Industrie 4.0” by a group of
representatives from different fields (such as business, politics, and academia) under an
initiative to enhance the German competitiveness in the manufacturing industry. The German
federal government adopted the idea in its High-Tech Strategy for 2020. Subsequently, a
Working Group was formed to further advise on the implementation of Industry 4.0.

In 2003, they developed and published their first set of recommendations. Their vision entailed
that “these Cyber-Physical Systems comprise smart machines, storage systems and
production facilities capable of autonomously exchanging information, triggering actions and
controlling each other independently. This facilitates fundamental improvements to the
industrial processes involved in manufacturing, engineering, material usage and supply chain
and life cycle management.”

Industry 4.0 remains a term well-known in German-speaking areas. Consequently, this guide
will aim at attempting to define the term, exploring the design principles, the advantages and
the challenges facing such an approach, and try to quantify the potential lying underneath.

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THE HISTORY BEHIND INDUSTRY 4.0

To be able to understand how Industry 4.0 became today’s buzzword, a look at its
predecessors might give us a perspective on how this revolution in particular is different. The
following diagram shows a timeline of the evolution of manufacturing and the industrial sector
in general:

Figure 1: Industrial Revolution

A. The First Industrial Revolution

The industrial revolution in Britain came in to introduce machines into production by the end
of the 18th century (1760-1840). This included going from manual production to the use of
steam-powered engines and water as a source of power. This helped agriculture greatly and
the term “factory” became a little popular. One of the industries that benefited a lot from such
changes is the textile industry, and was the first to adopt such methods. It also constituted a
huge part of the British economy at the time.

B. The Second Industrial Revolution

The second one dates between 1870 and 1914 (although some of its characteristics date back
to the 1850) and introduced pre-existing systems such as telegraphs and railroads into
industries. Perhaps the defining characteristic of that period was the introduction of mass
production as a primary means to production in general. The electrification of factories
contributed hugely to production rates. The mass production of steel helped introduce railways
into the system, which consequently contributed to mass production. Innovations in chemistry,
such as the invention of the synthetic dye, also mark such period as chemistry was in a rather
primitive state then. However, such revolutionary approaches to industry were put to an end
with the start of World War I. Mass production, of course, was not put to an end, but only
developments within the same context were made and none of which can be called industrial
revolutions.

C. The Third Industrial Revolution

Perhaps the third one is much more familiar to us than the rest as most people living today
are familiar with industries leaning on digital technologies in production. However, the third
industrial revolution is dated between 1950 and 1970.It is often referred to as the Digital

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Revolution, and came about the change from analog and mechanical systems to digital
ones.Others call it the Information Age too. The third revolution was, and still is, a direct result
of the huge development in computers and information and communication technology.

D. The Forth Industrial Revolution

The fourth industrial revolution takes the automation of manufacturing processes to a new
level by introducing customized and flexible mass production technologies. This means that
machines will operate independently, or cooperate with humans in creating a customer-
oriented production field that constantly works on maintaining itself. The machine rather
becomes an independent entity that is able to collect data, analyze it, and advise upon it. This
becomes possible by introducing self-optimization, self-cognition, and self-customization into
the industry. The manufacturers will be able to communicate with computers rather than
operate them. The characteristic of this revolutions are

- Cyber-Physical Systems
A cyber-physical system aims at the integration of computation and physical
processes. This means that computers and networks are able to monitor the physical
process of manufacturing at a certain process

- The Internet of Things (IoT)

A cyber-physical system still sounds familiar to us today. Machines can exchange data
and, in a lot of applications, can sense the changes in the environment around them.
Fire alarms are a good example of that. The Internet of Things, however, is thought to
be what truly has initiated Industry 4.0. The Internet of Things is what enables objects
and machines such as mobile phones and sensors to “communicate” with each other
as well as human beings to work out solutions. The integration of such technology
allows objects to work and solve problems independently. Of course, this is not entirely
true as human beings are also allowed to intervene. However, in case of conflicting
goals, the case is usually raised to higher positions. According to Hermann, Pentek,
and Otto, ““things” and “objects” can be understood as CPS. Therefore, the IoT can be
defined as a network in which CPS cooperate with each other through unique
addressing schemas.

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CHALLENGES FACING INDUSTRY 4.0

There are several challenge such as

 Security: Perhaps the most challenging aspect of implementing Industry 4.0

techniques is the IT security risk. This online integration will give room to security
breaches and data leaks. Cyber theft must also be put into consideration. In this case,
the problem is not individual, but can, and probably will, cost producers money and
might even hurt their reputation. Therefore, research in security is crucial.
 Capital: Such transformation will require a huge investment in a new technology that
doesn’t sound cheap. The decision to make such transformation will have to be on
CEO level. Even then, the risks must be calculated and taken seriously. In addition,
such transformation will require a huge capital, which alienates smaller businesses
and might cost them their market share in the future.
 Employment: While it still remains early to speculate on employment conditions with
the adoption of Industry 4.0 globally, it is safe to say that workers will need to acquire
different or an all-new set of skills. This may help employment rates go up but it will
also alienate a big sector workers. The sector of workers whose work is perhaps
repetitive will face a challenge in keeping up with the industry. Different forms of
education must be introduced, but it still doesn’t solve the problem for the elder portion
of workers. This is an issue that might take longer to solve and will be further analyzed
later in this report.
 Privacy: This not only the customer’s concern, but also the producers. In such an
interconnected industry, producers need to collect and analyze data. To the customer,
this might look like a threat to his privacy. This is not only exclusive to consumers.
Small or large companies who haven’t shared their data in the past will have to work
their way to a more transparent environment. Bridging the gap between the consumer
and the producer will be a huge challenge for both parties.

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IMPACT OF INDUSTRY 4.0

Proponents of the term claim Industry 4.0 will affect many areas, most notably:

1. Services and business models

2. Reliability and continuous productivity
3. IT security: Companies like Symantec, Cisco, and Penta Security have already begun
to address the issue of IoT security
4. Machine safety
5. Product lifecycles
6. Industry value chain
7. Workers' education and skills
8. Socio-economic factors

Figure 2: Impact of Industrial Revolutions 4.0