Industry 4.0 is knocking at your door: Is your ERP system ready?

Anish Kanaran

Disruptive technologies are shaping the future of manufacturing. In today’s fast moving global markets, manufacturers need to respond quickly to changing demands and maximize new market opportunities. The new and converging technologies will drive changes in how we do business and how we interact with customers and suppliers.

The fourth industrial revolution or Industry 4.0—has been gathering momentum in recent years and is set to be transformative in 2017. Industry 4.0 is the digitization of the manufacturing industry and a realization of the potential of the Internet of Things (IoT) combined with artificial intelligence and data science. Done right, Industry 4.0 will enable manufacturers to improve efficiencies whilst reducing costs.

Machines communicating with people—and other machines—are creating so much data that we have generated more in the past two years than in the previous 5,000 years of human history. It is now up to manufacturers to unlock this data. The information generated by the increase of connected devices and machines represents a significant opportunity. By determining how to best identify, capture and interpret this increased volume of data, it can help organizations understand their market and customers better, as well as gaining market share.

Industry 4.0 and the transition ahead

We are quickly entering an era of a new type of customer—a global customer who could be based anywhere in the world rather than in the countries that manufacturers have traditionally traded with. This new customer is more mobile, more aware, and more demanding.

In addition to the changing demographic of customers, new game-changing business models will cause continued disruption. Just take a look at what Uber has done to the taxi industry, Airbnb to the hotel industry, and Amazon to the retail sector. The frantic pace of change in every industry demands business owners to adopt new ways of thinking and execution.

There is a tremendous opportunity for manufacturers. However, it can only be realized by using information technologies alongside operational tech such as sensors, machine-to-machine communication, additive manufacturing, and robotics, etc.

Industry 4.0 challenges the way that manufacturing—at its very core a risk averse sector—functions with centralized and offline systems that are not inter-connected. We would further predict that their factories will soon evolve to become ‘smart’ with the capability to self-manage issues and internal processes.

Industry 4.0 will marry the world of production and networking in a connected environment. The ERP system will become the backbone to the network–connecting smart machines, logistics systems, production facilities, sensors and devices as products and machines communicate with each other, exchanging commands as products move through the production line.

To prepare for Industry 4.0, ERP vendors are moving away from pre-built interfaces and formulas to develop highly connected systems that conduct operations at the production line level, whilst giving business decision makers the real-time data they require. Certainly, the boundaries between production and management must disappear, and the next generation of ERP solutions will fully integrate with manufacturing execution systems (MES) to form a unified unit. As a result, it will be possible to track and document the transformation of raw materials through to finished goods.

ERP solutions that feature intuitive dashboards, and comfortably suit all screen sizes, will be key to businesses embracing the Industry 4.0 ethos of updating and sharing information in the mobile-working world. These solutions will also have the necessary mobile infrastructure in place to ensure real-time data synchronisation. Furthermore, Industry 4.0 compatible ERP systems will feature capabilities that help external partners, suppliers and customers become part of the business process.

Taking a critical look at the existing IT environment in your business is the first step towards understanding how ready—or unprepared—you are for Industry 4.0. It is clear that for manufacturers, growth in an Industry 4.0 environment will be intrinsically linked with a business’s ERP system. Those with next generation ERP solutions in place will be in a better position to meet the fast-paced and connected requirements of this new age of intelligent manufacturing.

The author is Channel Director, Middle East, Africa & India, Epicor Software.