Today, electronics design, manufacturing, assembly, and distribution is one of the world’s largest industries, and it continues to expand rapidly with the advent of technologies that are being adopted by consumers in their everyday lives — from wearables and other portable devices to smartphones, autonomous vehicles, and more.
But the electronics industry itself can benefit from the innovations it’s fueling. By combining physical manufacturing operations with big data, artificial intelligence, and machine learning, along with other technologies that support real-time automation and information gathering, electronics companies have turned recent progress into what’s now being referred to as the industrial internet of things (IIoT), or Industry 4.0 for short.
Industry 4.0 can help electronics and semiconductor companies develop new technologies and products, as well as transform their production capabilities so they can be more flexible and responsive to dynamic market forces. Smarter manufacturing can also increase productivity, reduce costs, and even open the door to new business models.
Smarter, connected factories are fueled by insights
We have entered the Fourth Industrial Revolution — hence, the Industry 4.0 moniker. It builds on the tail end of its predecessor, which saw computers and electronic technologies added to the manufacturing industry, which, in turn, led to more software and automation.
Industry 4.0 further expands on these developments by adding more connectivity, which has been enabled by faster, more secure networking. The additional interconnectivity available through the IoT, coupled with access to real-time data, provides manufacturers with a more holistic view of their operations that stretches out to every end of the supply chain, including their customers, partners, and suppliers. This, in turn, enhances collaboration among all stakeholders and provides a greater level of business intelligence that can be used to optimize production and better manage the business to improve the bottom line for existing products. It also creates the ability to more rapidly respond to new opportunities.
For electronics and semiconductor companies, Industry 4.0 means leveraging technologies that they themselves may be producing so they can modernize their own processes to increase productivity and reduce costs. The combination of new manufacturing techniques and technologies, including 3D printing and the IIoT, has the potential to bring transformative improvements so that electronics companies of all kinds can be innovative, responsive, and cost-efficient in a dynamic and competitive global market.
Industry 4.0 will (and must) have a measurable impact on electronics companies, be it large multi-nationals or startups, including original equipment manufacturers (OEMs), electronics manufacturing service (EMS) providers, original design manufacturers (ODMs), supply chain and distribution players, and, ultimately, the end customer. Electronics companies will not only transform their own facilities into smart factories to expand production or manufacture new products but also build new business models as they embark upon their own digital transformation.
Feedback loops support a state of constant improvement
If electronics companies are to remain competitive and innovative, they need transparency and full insight into their own operating models, as well as their suppliers and distributors. Industry 4.0 can help them build that holistic view with the right technology blocks as well as the necessary data to inform business processes and decisions that are critical for effective digital transformation.
For electronics companies embracing Industry 4.0, it’s an opportunity to thread information across their entire supply from initial design to the final customer. A continuous flow of information that represents real-world products and processes enables people and machines to create a feedback loop that improves each stage of the design, manufacturing, and distribution life cycle. This loop must also bring in partners and suppliers who can help contribute key technology blocks to meet specific objectives such as improving manufacturing equipment, gathering real-time information from the factory floor, product design, and product verification and testing.
Technology blocks not only include hardware such as sensors and IIoT devices but also software, AI, and machine learning that can take collected data and turn it into insight that can transform operations, optimize product manufacturing, and accelerate time to market. All these blocks can form larger systems that help electronics manufacturers realize the benefits of Industry 4.0.
A critical challenge for electronics companies is that they vary widely depending on the volume and types of products they manufacture, as well as who they sell to and how their products get distributed. Some may produce high volumes of a popular consumer device or a component that goes into many different types of devices, while others may be very niche players serving distinct needs in a sector such as energy, aerospace, or medical. This means it can be difficult to apply processes and systems from their peers because each OEM, EMS provider, and ODM have their unique characteristics that must be taken into account, as do partners such as distributors and logistics providers.
Broadly, however, there are key systems that every electronics manufacturer can look at, bearing in mind their volumes, mix of products, and specializations. For example, a company that serves aerospace customers with a wide variety of speciality products but in low volume would benefit greatly from replacing a traditional assembly line with a process-oriented, workshop-based production system. Each workshop would handle specific production processes for any of the products that needed it rather than have an assembly line for each different product. This approach maximizes equipment use, which improves the return on investment — a factor that is especially important when taking into account that equipment was likely a significant capital expense.
For this workshop approach to be effective, an electronics manufacturer would need production scheduling optimization systems to balance all the workloads, which, in turn, helps to reduce changeover times and idle equipment. This is where technology such as AI comes into play — instead of people doing traditional production scheduling, AI can be used to strike the best balance between changeover times and equipment capacity, performance, and maintenance.
This workshop approach wouldn’t work for a high-volume manufacturer with a limited mix of products, however. Instead, it would benefit more from systems that optimize performance of traditional assembly lines, automate equipment, and enable predictive maintenance, all of which could leverage AI and machine learning using data collected from the factory floor vis-à-vis IoT sensors and equipment logs.
A solution for the foreseeable future
Regardless of what end of the spectrum an electronics manufacturer falls into, or even somewhere in the middle, this digital transformation is not a one-time endeavor. Embracing Industry 4.0 is also about adopting a mindset of constantly learning how to further optimize manufacturing as well as supply chain management and product distribution.
And it can’t be done alone, either. The contributions of partners, suppliers, and equipment makers are also success factors for an electronics manufacturer’s digital transformation. They need to seek out machine suppliers that have the hardware and software that support the necessary feedback loops for Industry 4.0, including product-to-machine communication, machine-to-machine communication, and equipment automation. These loops are essential to fostering the constant information gathering and learning that supports digital transformation.
The efficiencies gained by Industry 4.0 also put electronics manufacturers in a position where they’re able to be more agile and flexible to respond to new opportunities. A company that normally only produces high volumes of a few products could potentially customize some of those products to meet specific customer demands, while a low-volume manufacturer could more easily ramp up to address new market opportunities.
What’s important to remember is that Industry 4.0 isn’t just about adding technologies to the factory floor — it’s about leveraging the data that already resides across the entire supply to optimize individual processes in a manner that contributes to the greater whole.
Additionally, a one-size-fits-all solution doesn’t exist. While machine suppliers and other partners may be able to share lessons learned from other customers, an electronics manufacturer must be guided by their business model, the needs of the customers, and longer-term goals to create their own digital transformation path.