Factories of the Future


If there’s one thing global competition has taught us, it’s that our attitudes towards technology can mean the difference between success and failure. Industry 4.0, the ‘Fourth Industrial Revolution’, is still in the early days of adoption, but the changes it promises are profound. Over the next decade, forward-thinking businesses will embrace change and transform themselves, through connectivity, data, automation, and an increasingly sophisticated workforce.

The result of these changes will be the ‘Smart Factory’; highly integrated, agile, lean, and driven by demand. In emerging economies, it will provide employment and a rising standard of living. In economies that currently dominate the industrial landscape, Industry 4.0 will be a catalyst for innovation, competitiveness and productivity, contributing to material wealth within socially- and environmentally-sustainable parameters.

Of course, there will be more than one type of future factory. In general, however, the trend is towards smaller, cleaner, leaner, more modularised and flexible facilities that can deliver high-quality, affordable products to a constantly changing marketplace.

The Internet of Things

According to technology, research firm Gartner, Inc., there will be over 20-billion devices on the Internet of Things by 2020, at which time more than half of new business processes and systems will incorporate some element of IoT. By 2025, according to analytics firm IHS, the number of connected devices used in manufacturing will represent 75 percent of all connected devices. Already, manufacturers are using IoT sensors to monitor production and operating processes, gather diagnostic data and function status reduce manufacturing defects and track after-sale performance.

On the shop floor of the future, sensors and software will operate continuously, predicting and preventing equipment failures, optimising processes and maximising productivity. A continuous, real-time flow of data will provide information and actionable insights that make production processes increasingly visible, predictable and controllable.

The Smart Factory will have Smart Assets – objects connected to the IoT, possessed of their own monitoring and reporting capabilities. In a sense, the factory itself can be conceptualised as a ‘Thing’ in the IoT, partaking of, and contributing to, an ecosystem run on data.

The IoT will have obvious benefits along the supply chain, providing end-to-end visibility, real-time status information, traceability and more. ‘On-time, every time!’ will no longer be a dream, but a reality. Factories and supply chains of the future will extend beyond traditional ‘stages’, creating conduits of information that foster transparency and collaboration, among suppliers, retailers, customers, industry groups, government bodies and educational institutions.

Big Data

Like labour and capital, data is a vital part of industrial production. Big Data, driven by the Internet of Things, has become the whetstone of choice for honing competitive edge. Big Data Analytics makes predictions based on data sets that were previously too large and too difficult to make sense of. In most factories of the future, leveraging real-time data and sophisticated analytics will enable deeper insights and better decision making. Without Big Data, it seems unlikely that future factories, especially in volatile industries, will be agile enough to compete.

The Cloud

Of course, turning all that captured data into actionable information requires a scalable infrastructure that allows one to store, organise, integrate, and analyse that data, while keeping it private and secure. Over the last few years, Cloud computing has come into its own, lowering the economic entry barrier and providing exactly the infrastructure required for Industry 4.0. On the Cloud, Small- to Medium-sized Enterprises (SMEs), as well as organisations in emerging economies, enjoy the processing power, storage and security that once required large IT expenditures.

The Cloud, in effect, by providing an affordable, highly-scalable architecture, will allow smaller companies to take advantage of the entire software-suite of Industry 4.0.


Automation is nothing new – it’s been used across various industries, for numerous applications for decades. The process will continue apace, but augmented, now, by intelligence and data. In the future, material-handling systems will be routinely automated. On the shop floor, overhead gantry robots will perform welding tasks, or pick-and-place work-in-process inventory. Autonomous intelligent vehicles will no longer be rigidly programmed for predefined paths, but will manoeuvre adroitly, intelligence on board, around boxes, pallets and anklebones.

Non-Automated (But Highly-Skilled) Workers

One of the most visible changes to come with Industry 4.0 will be the education level of the factory’s human capital. Automation will inevitably take its toll on unskilled labour – repetitive tasks are more profitably done by machine. The replacement of human labour by machine has been a feature of every industrial revolution, but the economic growth created by manufacturing has created far more jobs than were taken away.

Besides, production floors of the future will need skilled personnel to work alongside machines. Enter the cobots, smaller, less expensive robots that work with humans. Cobots are already employed at many factories, doing pick and place, loading pallets, packaging, and taking the weight and risk off the backs and shoulders of valuable employees.

Smart Tools

No more data logs – no more manuals. With smart tools, connected to the IoT, operators are free to focus on their tasks. Smart tools, such as drills, wrenches and measuring devices, automatically adjust to the appropriate settings, then check and report on the tasks that workers perform. Adding intelligence and connectivity to tools provides quality assurance, speed, and improved efficiency.


When will Industry 4.0 arrive? Many of the innovations mentioned in this blog are already being used in factories around the globe. Given the pace of innovation, and the fierceness of competition, it’s probably wise for manufacturers to assume that the future is already here. For ERP customers, this next phase of business evolution promises challenges and enormous opportunities.

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