Often considered one of the most traditional areas of business, the manufacturing sector is outstripping every other industry in the adoption of cutting-edge technologies such as big data and the internet of things.

"There's a convergence of technology between the internet of things and the world of manufacturing," says John Nesi, vice-president of market development at Rockwell Automation, which partners with companies like Cisco to provide this new approach to manufacturing systems.

That convergence has been dubbed Manufacturing 4.0, adopted as the title of an event last week in Meath that brought together a range of industry experts and representatives from Ireland’s skilled manufacturing sector.

This spans businesses as diverse as pharmaceuticals, microprocessors, medical devices, food and drinks, and electronics.

“At Cisco, we estimate the internet of things will have over $19 trillion in impact over the next 10 years.

"Almost every industry will be involved, but manufacturing is leading it," says Maciej Kranz, vice-president of the corporate technology group at Cisco.

The value of the internet of things market for manufacturing is predicted to grow from $472 billion last year to $913 billion by 2018, far ahead of retail at $326 billion, or banking, expected to reach a comparatively modest $154 billion in 2018, according to Sanjay Ravi, Microsoft's worldwide managing director for discrete manufacturing.

Conservative industry

“Traditionally, manufacturing has been a very conservative industry, but over the last two to three years, with the technologies of the internet of things, they’ve been able to unleash a new level of productivity,” he says.

A key reason is that the sector comes tops in terms of the amount of data it generates.

Somewhere between 10 to 30 billion manufacturing devices are already networked and churning out data, he says. These include temperature, occupancy, and humidity sensors, cameras, vehicle tracking devices, load and flow meters, production line equipment and much more.

By contrast, retail – often mistakenly believed to be the top data-producing sector – relies mostly on consumers online to generate data through web purchases or other interactions.

As storage costs have plummeted, manufacturers can hang on to more of that data and start to exploit it, using analytical software and machine learning – intelligent algorithms that can process vast swathes of data for insights.

"There's loads of data being created," says Christoph Hartmann, business expert in manufacturing with analytics company SAS.

“The question is, how do you get that into what we call a data lake, integrate it, and ensure you have quality information? This is where analytics come into play.”

Data use

But manufacturers need to have a target goal in mind so they are not gathering data simply for the sake of gathering data. A tyre manufacturer might want to look at temperature and pressure data created during the manufacturing process to determine how they influence tyre quality, he says: “Analytics are about finding correlations, and seeing what are the driving factors.”

Manufacturers can also use SAS analytics to analyse elements outside the manufacturing process, such as online sentiment. He says that recently, when computer-maker Lenovo was preparing to manufacture a new notebook model, sentiment analysis picked up ongoing forum discussions among gamers concerned the company intended to replace the keyboard.

Because gamers were a target market for the device, Lenovo decided, during the active production process, to leave the keyboard as it had been, Hartmann says, which left consumers better satisfied.

“This is what analytics should bring to the table.”

SAS has been in the business software and analytics market for more than 35 years, traditionally focused on banking and insurance, but the booming interest in data analytics for manufacturing is creating a challenging new market for the company, he says.

“Manufacturing is the growth market for the future. It will be another cornerstone of [SAS’s] business to come.”

Efficiency is another of the top benefits for manufacturers, as shop floor processes and machinery get networked.

Already, technicians can monitor systems, perform diagnostics and do some repairs remotely, even across continents, Nesi says.

Lift manufacturer ThyssenKrupp has begun to offer predictive and preemptive maintenance by networking and constantly monitoring lifts, Ravi says. A lift can automatically signal when it needs to be serviced, or a part needs replacement, which improves uptime.

In another major change, products are communicating back to manufacturers after they are sold, providing a wealth of insight that can help companies develop better products but which also gives manufacturers a direct link to consumers.

“The internet of things is just another way of saying everything we produce is going to be a transmitter of some sort,” Nesi says.

Retooled relationship

For example, diagnostic or entertainment systems in automobiles can be configured to pass data back to the auto manufacturer, creating a new relationship between car buyer and car maker, says Ravi.

Traditionally, auto dealers would have been the point of contact for consumers.

Manufacturers are also discovering new business models. Rather than simply selling their products, some companies have begun to offer manufacturing as a service.

For example, Rolls Royce now sells “engine hours”, Ravi says, in which it offers aeroplane engines on “hours of service” arrangements.

The airline doesn’t actually own the engine, but instead has the full service provision of one.

As a sector, manufacturing is facing plenty of challenges, too. There’s a global move to reverse the past trend towards offshoring labour to lower-cost economies, mainly because networked factories mean highly skilled labour is more important than cheap labour.

But the current generation is not going into the technical and computing fields to gain the knowledge needed to run the smart factories of the future, Nesi notes.

Skills gap

More needs to be done to address this looming skills gap and also make manufacturing more attractive, speakers at the event said.

On the other hand, Ireland's strong manufacturing base positions it well for a significant role in a Manufacturing 4.0 world, says Gareth Hanley of Hanley Automation.

“Ireland has a 30-year history of advanced manufacturing” and is now starting to become an exporter of manufacturing and IT services, he notes.

That view was echoed by Taoiseach Enda Kenny, who addressed the event.

“We’re very well-placed to create jobs in the higher-end manufacturing sectors,” he told the audience.

“We would do well to think long and hard where this will go.”

Manufacturing 4.0 has been identified as an area for special focus in a proposed national advanced manufacturing centre and the Government would be reviewing how to give support and develop the right environment for the sector, he said.