Effects of Industry 4.0 in Asia’s automation markets

Industry 4.0 refers to a new level of organization and control of the entire value chain across the life cycle of products. Seen as the fourth industrial revolution, Industry 4.0 seeks to merge physical and virtual worlds. This marks a significant change in the level of complexity from the third industrial revolution, where electronics and information technology were used to automate production. A brain child of the German Government, Industry 4.0 is currently widely used across the manufacturing industry in Europe, especially Germany. It is being selectively deployed across industries in the United States but as a region, Asia-Pacific has some way to go before Industry 4.0 makes an impact in the production line. Its prominence cannot be over emphasized in a world where each customer has a different preference or requirement. The increasing use of information and communication technologies (ICT) in the manufacturing sector has meant that there is not a clear distinction between virtual and real world.

 

Industry 4.0 in Asia Pacific- A Long Way to Go

 

As Industry 4.0 integrates most parts of the value chain, its implementation will influence all elements in the production. One of the keys to successfully transitioning into an Industry 4.0 environment is to ensure a robust IT infrastructure. Unfortunately, most countries in the Asia-Pacific region are not in a position to guarantee IT infrastructure that can support the digital transformation to Industry 4.0. Many countries have discrete elements of IT systems in place, but not at a level that helps them effectively use Industry 4.0. Clearly, the objective must not be to introduce or superimpose technologies on the existing set up. This is because the priorities set by business segments toward implementing such systems and introducing changes will be different. From a networking perspective, it will involve coordinating activities from procurement, logistics, marketing, and services. The following are the stages identified for effective digitalization. Automation suppliers are able to install and use them across a wide variety of industries.

Impact on the Automation Market

From an automation standpoint, critical industries in Asia-Pacific are the oil and gas, power, water and wastewater, food and beverage and mining and metals industries. There are major changes being planned in the electronics industry across the region as well. Foxconn has planned to introduce robots in its factory floor in China. Robots are seen as the perfect solution to reduce human intervention, as such companies have been criticized for the harsh working conditions for workers. Clearly the benefits are manifold: production stability and safer working conditions for workers are among the biggest drivers. There is uncertainty in terms of the level of interest shown by companies and investments are hard to obtain but with a strong electronics industry and shortage of skills, Singapore could be a major beneficiary when it comes to using robots. The average payback time for robots is also a key determinant. Savings is the key because production errors can prove expensive in the electronics industry.

 

While the adoption rates for high-end technology is low when compared to Europe or the United States, Southeast Asia is witnessing traction in the region for automation. The current trend witnessed is that large manufacturers are shifting base units to the Asian continent, particularly Indonesia, Thailand, and Malaysia where the next wave of growth is expected. However, this in itself is not a major driver that will help determine growth in the region.

 

Automation vendors are well aware of the weakening political and economic situation in many regions across Asia-Pacific. Government initiatives and investments are expected to help emerging markets gain a grip on theautomation market. This implies that a complete factory concept will take time to be adopted in these growing economies and that change will be slow.

 

Changes in Product and System Design

Industry 4.0 requires automation systems to be able to think and work autonomously. In other words, it assumes that automation systems that are currently being used in manufacturing can be customized to such an extent that the systems will be able to perform most of the tasks that currently require human intervention on their own. While the human element is still important, Industry 4.0 marks a shift from rigid, centralized factory control systems to decentralized intelligence. Moreover, the output from machines can differ from today’s scenario as it is difficult to predict customer’s requirements. This will mean factories and machines will have to be differently organized than they are today, as manufacturers have to respond quickly to customer needs and this can influence the design of automation system itself. Companies such as Festo are coming up with innovative concepts for theautomation of modular production units with little need for reconfiguration. However, these are more likely to be tested in the more developed regions of Europe and the United States before being implemented in emerging regions in Asia-Pacific.

 

Cybersecurity

With the growing use of complex systems and networks, one thing that is certain is that there will be security risks at multiple levels. The manufacturing industry recognizes the risk of data theft, malware, and hackers as data proliferate and become more accessible over the network. This means that networking and connectivity inautomation also become crucial in ensuring the safety of systems. This is possible only by enabling a clear understanding of different disciplines (IT, instrumentation, electrical, and manufacturing engineering). There will have to be significant changes in the software development as well because of the security element in theautomation systems. However, as much of the research and development happens in the headquarters (which is mostly located in Europe or the United States) for automation vendors, it is not likely to have a significant impact on Asia-Pacific automation industry. As energy use and smart manufacturing work in tandem in Industry 4.0, its adoption in critical industries will require engineers and operators who can work with advanced data systems and robots. Currently, most of the countries in Asia-Pacific are lacking such skills.

 

Low Wage not a Driver

While it is known that Southeast Asia and emerging economies in the region are currently benefitting due to their low wage margins, Industry 4.0 can make production so efficient and streamlined that companies will begin to see less value in moving their production plants to countries such as China, India, and Thailand.

 

The ultimate objective for such manufacturers and their governments is to retain manufacturing within their borders. However, opportunities for Asia-Pacific manifest in the form of changing dynamics in many countries. As Asia-Pacific is a region that offers immense potential for automation, green initiatives and clean technologies in manufacturing can be made priorities there. Such requirements will also play a role in the design and use ofautomation systems. Although China and Japan are currently the largest users of robotics, manufacturing plants of the future will use advanced robotics for production. One of the important elements enabling robotics is the sensors which communicate with other sensors through wireless sensor networks. All this means that for Industry 4.0 to be viable, it has to yield significant cost savings that will justify the huge investments required.

 

Beyond the Factory Floor – Automation Holds a Promising Future for Industry 4.0

A major criterion for success of Industry 4.0 is the availability of labour to support technologically advanced initiatives. In the present scenario, most Asia-Pacific economies, with the exception of Japan, are not in a position to embrace Industry 4.0 due to infrastructural and economic demands. It is the progressive adoption of new technologies that will lead to the development of a fully connected plant-floor. Given that the infrastructure for conventional industrialization is modest in most parts of Asia-Pacific, the region can choose other paths besides the conventional infrastructure and industry path to industrialization.

 

In conclusion, it can be said that Asia-Pacific holds promise for such advanced technology given that it offers greenfield opportunities and the potential to use radical yet innovative production techniques but as a technology, Industry 4.0 is still in infancy and will require collaboration between various stakeholders with automation being one of the keys to success. For this to happen, automation and networking vendors must adopt an integrated approach, taking into account technologies, the engineers and operators, and education in equal measure.