Patrick Berry
June 16, 2022

INSIGHTS ARTICLE: Veolia ANZ - Digital Transformation and Industrial Operations.

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Digital Transformation and Industrial Operations

Every area of our modern world is being transformed by the relentless advance of digital technologies. Industries that have felt significant disruption due to technology include bookselling, free-to-air television, taxi services, travel agencies, and the list goes on.
With disruptive transformation sweeping the world, manufacturing and utilities will not be spared. Industry 4.0 is the label that has been applied to the cyber-physical transformation of manufacturing. The name is inspired by the German Government’s Industrie 4.0 initiative which they commenced in 2011 to promote connected manufacturing and a digital convergence between industry, businesses, and other processes.
# What is Industry 4.0
Industry 4.0 is a strategic initiative of the German government, first presented at the Hannover Masse Fair in 2011
Industry 4.0 is a loosely defined concept, encompassing a number of disruptive (but otherwise largely unrelated) technologies concurrently reaching maturity and allowing traditional manufacturing to be transformed into smart manufacturing.
Many, but not all these disruptive technologies are ICT related and an expectation of the implementation of Industry 4.0 will be that Industrial Automation will become more IT like in the future resulting in,
- The adoption of open standards
- Higher levels of interconnectivity
- Device discovery and automatic configuration
# Forth Industrial Revolution
The Industry 4.0 description implies that we are in the midst of a 4th Industrial Revolution that focuses heavily on interconnectivity, automation, machine learning, and real-time data.
Disruption through new technology is becoming more frequent and the period to implement is shorter.
The main driver of the Fourth Industrial Revolution is the rapid advances in ICT technologies including communications (the Internet, Cellular networks, etc.), cloud computing, open-source software, etc.
# What are the Industry 4.0 Technologies?
While Industry 4.0 is an ill-defined concept, the following nine technologies are generally accepted as the key technologies driving change,
- Internet of Things (IoT)
- Big Data and Analytics
- Cloud Computing
- Cybersecurity
- Horizontal and Vertical Integration
- Robotics
- Augmented & Virtual Reality
- Additive Manufacturing
- Simulation
# Enabling Technologies
Some of the enablers of the Industry 4.0 technologies above include,
- Computing Power – Moore’s Law
- 5G Networks
- Blockchain
# What Will This Mean?
History is written in hindsight, those trying to predict future events always struggle due to a large number of possible future states and the role of chance in how future events will develop.
## Amara’s Law
Roy Amara was an engineer and futurologist and in 2006, while president of the Institute of the Future coined the adage,
"We tend to overestimate the effect of a technology in the short run and underestimate the effect in the long run"
This observation is important, in the short-term expectations are high and much hype around the technology is generated that often disappoints. However, in the longer term, the impact can be beyond our imagination as our frame of reference is the present.
## Traditional Industrial Automation
Control technologies include mechanical, pneumatic, electronic, and now digital control. From the 1970s computer-based control of manufacturing and process plants has become widespread with the introduction of the Programmable Logic Controller (PLC) and Distributed Control System (DCS). These were originally proprietary micro-processor-based systems for controlling industrial processes.
## Traditional Automation vs Industry 4.0
Industrial Automation systems have been moving away from proprietary hardware and software and adopting COTS hardware and the use of mainstream, standards base enterprise-grade operating systems, software, and networking equipment.
Some examples of this include the use of TCP/IP networks and server virtualization.
0352a1e6-62eb-4412-8663-3da215463933-images_you_would_like_include_in_the_article-Industry4.0## Integration
Vertical integration is the integration of production, ERP, finance, marketing, sales, etc. systems within the same organization.
Horizontal integration is the integration of suppliers, production, and customers systems (building on the work done with Electronic Data Interchange [EDI].
## IT / OT Convergence
IT and OT (Industrial Automation) platform convergence will likely lead to the integration of support organizations. For a fuller discussion, see, [IT OT Convergence].
# Benefits of Industry 4.0
The claimed benefits of Industry 4.0 include,
- Productivity
- Efficiency
- Flexibility and agility
# Industry 4.0 Risks
Industry 4.0 is not without risks,
- Reduced resilience due to tighter integration of supply chains
- Cybersecurity. Connecting industrial processes to the Internet exposes them to any number of cyber security risks
- Unemployment. Industry disruption will inevitably lead to short term unemployment.
Warnings of long-term unemployment due to the introduction of new technologies is often present but the reality is that new technologies generally produce more and more skilled jobs than they eliminate.
The real long term social issue is going to be the elimination of low and middle skilled jobs.
# Read Further
Thanks for reading, hope you enjoyed this article.
To explore further,
- For all things Industry 4.0, check out my [Industrial Digital Transformation & Industry 4.0] publication.
- Feel free to join my network on [LinkedIn] (remember to mention that you have read the article).


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