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The Fourth Industrial Revolution: Definitions and Technologies

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What is the 4IR (Fourth Industrial Revolution)?

The term was coined in 2016 by Klaus Schwab, the founder of the World Economic Forum, at the organization’s annual meeting. Later, Schwab wrote a blog post on the subject as well as a highly influential book – The Fourth Industrial Revolution – which describes “a technological revolution that will fundamentally alter the way we live, work, and relate to one another.”

Today, the Fourth Industrial Revolution means the transformation of the manufacturing industry by burgeoning technologies like artificial intelligence, additive manufacturing, augmented/virtual reality, and the IoT (internet of things.) It also refers to advances in connectivity that give rise to “smart factories”—fully connected networks that merge the physical and digital realms (more like ecosystems than linear value chains.)

According to Klaus Schwab, the Fourth Industrial Revolution is leading to a “supply-side miracle.” There’ll be long-term gains in efficiency and productivity, lower transportation and communication costs, more efficient logistics and supply chains, all of which will drive economic growth.

Others within the World Economic Forum warn of the dark side of the Fourth Industrial Revolution: mass unemployment, cyber warfare, and an infinite number of other tangible and intangible threats that we can’t even conceptualize yet.

Nobody can predict which way the Fourth Industrial Revolution will play out. But one thing’s for sure—the ball’s rolling. And as the changes take hold and shape the future, the onus is on manufacturers to decide which technologies they should adopt to remain competitive.

The World Economic Forum and McKinsey have teamed up to guide manufacturers. They’ve established The Global Lighthouse Network, a community of world-leading manufacturing facilities that embody Fourth Industrial Revolution manufacturing technologies and principles.

These “Lighthouses” have been selected to serve as beacons for proactive manufacturers seeking to become Fourth Industrial Revolution leaders. 

How Did We Reach the “Fourth” Industrial Revolution?

The Fourth Industrial Revolution is disrupting industry at an unprecedented pace, but it’s not the first time rapid technological advancement has resulted in widespread change and upheaval. The Fourth Industrial Revolution builds on top of three industrial revolutions that came before it:

  • The First Industrial Revolution started in Britain around 1760, spreading to Europe and the rest of the world through the early 1800s. It was primarily powered by steam and the steam engine. It enabled manufacturers to mechanize production for the first time, resulting in new manufacturing processes, bigger factories, a booming textiles industry, and mass urbanization.
  • The late 1800s marked the arrival of the Second Industrial Revolution, which saw the rise of mass production caused by the advent of steel, oil, and electricity. Major inventions of the era include the light bulb, the telephone, and the internal combustion engine.
  • The Third Industrial Revolution, also called the “Digital Revolution,” took place in the second half of the 20th century. Within a few decades, inventions like semiconductors, personal computers, and the internet changed how we work, live, and communicate forever.

The Most Significant Fourth Industrial Revolution Technologies

The Fourth Industrial Revolution is powered by a suite of core technologies that has been advancing for decades at an exponential rate. Here are a few key examples:

  • Additive Manufacturing. Also known as 3D printing, this process allows for rapid prototyping and “decentralized” manufacturing. Smaller numbers of units can be manufactured locally rather than relying on overseas factories with all the political, economic, and environmental risks.
  • Advanced Robotics. Today’s robots combine increasingly powerful hardware and sensor technology with highly sophisticated programming and machine learning capabilities. They can carry out tasks independently, with other robots and humans, learning and improving over time.
  • Big Data Analytics. As our world becomes digitized, vast quantities of data are generated and stored. This data holds hidden secrets that promise to revolutionize our understanding of the human condition. We need big data analytics to extract these insights.
  • AI and Machine Learning. Artificial intelligence imbues programs and machines with human-like decision-making capabilities. These capabilities become more advanced with machine learning algorithms and refined over time with exposure to larger data sets.
  • The Internet of Things (IoT). The IoT is the backbone of the Fourth Industrial Revolution. It refers to networks of sensors and connected devices that “talk” to one another and execute functions with or without human intervention.
  • Augmented and Virtual Reality. Augmented reality (AR) and virtual reality (VR) enable the creation of immersive and interactive experiences using digital simulations. In a post-pandemic world, where buying takes place at a distance, serving up products virtually has never been so crucial.

7 Ways to Use Fourth Industrial Revolution Technologies In Your Business

The Fourth Industrial Revolution drives efficiencies, conserves resources, boosts profitability, and enhances buying experiences. Here are just a handful of use cases:

1. Harness Automation to Improve Productivity and Resource Efficiency

Fourth Industrial Revolution technologies are automating sales processes (3D configuration and proposal automation), engineering (CAD and design automation), and the shop floor (AI and robotics). Human employees are being freed to work on the parts of their jobs that are more, well, human.

Sales reps can concentrate on forming and maintaining relationships, engineers can spend more time on research and development, and workers on the shop floor can avoid repetitive, menial, and dangerous jobs.

2. Use Networked Sensors to Power Predictive Maintenance on Machines

Networked sensors positioned inside factory equipment can monitor machine performance, run diagnostics, and schedule “predictive maintenance.” The result: extended life expectancy for machines, less downtime, less waste, and increased safety.

3. Create Digital Twins to Save Time, Space, and Reduce Waste

Digital twins are virtual replicas of physical devices that live in simulated environments. To accelerate R&D and save costs, engineers can carry out rapid testing on digital twins rather than physical prototypes, saving time and money in destructive testing (tests carried out to failure). 

4. Build a Connected and Flexible Smart Factory—Learn and Adapt to an Ever-Changing World

Rather than automate discrete, linear tasks, the smart factory adapts fundamentally to suit its internal and external business environment. It monitors the entire production process, from supply networks to inventory, machines, individual workers, and tools, making continual adjustments to achieve specific goals.

5. Leverage Cloud-Based Systems to Sync Geographically Distributed Manufacturing Facilities

COVID-19 shined a light on just how susceptible manufacturers are to supply chain shocks. Companies with geographically dispersed production facilities are particularly vulnerable. The cloud and SaaS solutions increase resilience to globally disruptive events by providing a single source of truth accessible anywhere, any time, on any device, breaking down silos, and enhancing collaboration across borders.

6. Use 3D Product Configuration to Customize Products and Personalize Experiences at Scale

From personalized sneakers to personalized medicines, demand for customized goods is booming. The rewards for manufacturers that can supply personalized goods are significant—“personalization leaders” experience a 5 to 15 percent increase in revenue and a 10 to 30 percent increase in marketing ROI. 

But personalization can be costly. Customizing products means more parts, more complexity, and more mistakes. Or does it?

Visual product configuration makes configuring and personalizing complex products fast, easy, and accurate. Non-technical sales reps and end-customers can interact with 3D images on-screen to design highly technical products to their exact specifications. Product rules built into the software’s back-end prevent mistakes, engineering inefficiencies, and production issues.

7. Streamline Collaboration Between Sales, Engineering, and Manufacturing Teams With CAD and Design Automation

Engineering bottlenecks are another reason manufacturers steer clear of supplying customizable goods. Using Fourth Industrial Revolution technologies like AI and augmented reality to configure and sell products faster than ever before is a good thing. But without corresponding improvements in engineering efficiency, enhanced sales productivity only causes strain and delays downstream.

CAD and design automation solve this problem by automating the most time-consuming and repetitive engineering tasks. A visual CPQ solution like Epicor CPQ auto-generates CAD files, technical drawings, BOMs, CNC cut sheets, and more. The entire end-to-end process is streamlined, from initial sales interaction to finished product, driving efficiency at every stage.

If You’re Ready to Modernize and Thrive With Industry 4.0, We Can Help.

Digital transformation is driving the introduction of Fourth Industrial Revolution technologies within manufacturing, but the transformation itself isn’t about technology. Instead, it’s about using technology to deliver the products and experiences that your customers actively seek.

We’ve covered a few specific ways this can happen, from augmented CPQ processes to AI-driven efficiency in the sales cycle and supply chain. No matter what your plan for the future, make sure it centers on enhancing customer experiences.