How Industry 4.0 Is Impacting Globalization

One of the earliest flights between two countries took place on Jan. 7, 1785, when Jean-Pierre Blanchard and John Jeffries crossed the English Channel by hot air balloon. It wasn't until more than a century later that a heavier-than-air object repeated the journey. At the start of the 20^th century, developments in aviation technology took off, and the first airline to operate international flights was launched in 1917. Since then, the ability to travel and transport goods internationally has dramatically altered the way companies do business.

Globalization

Technological developments, both in and outside of factories, have impacted the manufacturing industry's globalization — the process by which businesses and other organizations develop international influence or start operating internationally. Ever since the first industrial revolution, industrialization has impacted international business. In particular, advances in transportation and telecommunications have had a huge impact. With increasing trade and communication, more and more companies are extending their reach across land and sea.

In fact, the modern manufacturing supply chain is centered around globalization. Every day, goods are moved across the globe on shipping lines, freight forwarders and by air. Business activities, including outsourcing of logistics, facilities management, professional services and maintenance, can all be international processes.

Industry 4.0

With every major industrial and technological change, the characteristics of globalization have been altered. In 2011, the term Industry 4.0 was introduced by the German government and Siemens. Industry 4.0 shifts manufacturing away from analog and mechanical technologies and toward all things digital.

As information technology and operational technology converge, companies are beginning to find new ways to connect. Data collected from suppliers, customers and the enterprise can be aligned with detailed production information, which means processes can be fine-tuned in real-time. The digital and physical worlds have become irrevocably linked, with machines, systems and people able to exchange information and automatically adjust. Industry 4.0 is not only revolutionizing manufacturing processes but also having a powerful impact on the model of globalization, by changing the workforce and increasing the ease of access to services.

Blurring the Boundaries

In the dawn of Industry 4.0, companies are using more complex, worldwide supply chains and data networks in their operations. Physical connectivity is being replaced with an increasing number of digital links — many of which are stored in the cloud. Greater international collaboration is more possible than ever before. Using cloud-based software, any staff member in any geographical location can contribute to a design. This function is being increasingly offered in computer-aided design (CAD) software, making design a more collaborative process.

However, globalization is not just improving the design process. Businesses can get the most out of their talent pool or international supplier network using digital connectivity, as expertise can be offered remotely and in real time. In many international companies, suppliers or personnel work in small clusters to increase the flow of ideas, which can be spread more widely using the cloud. Cheap data storage and transfer will increase the decentralization and flexibility for businesses. This may result in the international company of the future not needing a significant physical presence across the globe but operating from just a few clusters.

International Competition

Increased connectivity means that organizations must now be competitive on a global scale and cannot rely on their physical location to win business. This will require companies focusing on meeting ever-changing consumer demands. Keeping manufacturing and production flexible and incorporating automated technologies can cut production times and allow organizations to respond quicker, increasing competitive advantage.

Logistics has come a long way since the first flight across the channel. Industry 4.0 has revolutionized business operations both inside and outside the factory, increasing the links between international organizations and driving the process of globalization forward.

About the Author

Jonathan Wilkins is the marketing director for EU Automation, an obsolete industrial parts supplier. Contact Jonathan via email at jonathan.wilkins@euautomation.com.