What is Industry 4.0 and What Place Does Small Business Have in It?

Industry 4.0, also known as the fourth industrial revolution, is transforming the business industry. Advanced technologies such as virtual reality (VR), data storage and analysis, artificial intelligence (AI), and network communication are providing better insight and data visibility across the entire supply chain, offering a more productive and smarter manufacturing process. This is creating new opportunities and efficient ways of producing goods and services, allowing companies to enhance the customer experience.

While adapting to this digital shift may be challenging for some small and medium-sized enterprises (SMEs), especially ones hesitant about its advantages, it is still necessary in order for them to thrive and compete at both a local and global level. If SMEs continue their traditional production activities, they will most likely face the risk of disappearing. Thus, small businesses must take advantage of these technologies to boost productivity and profits, predict cash flows, receive updates on inventory, make smarter decisions, and more.

However, many SMEs are currently not prepared to implement Industry 4.0 technologies and concepts. In fact, many early adopters of advanced technologies like data analytics, digital twins, AI, and augmented reality (AR) have been mainly large businesses. According to Tom Kelly, the CEO of Automation Alley, “small- and midsized manufacturers are well aware of the term Industry 4.0. However, the disconnect is they’re not very good at understanding how to use those technologies. Owners of small companies tend to have a ‘let’s roll up our sleeves and get it down’ type of personality. Deploying Industry 4.0 involves overlaying a digital mindset on a physical business, which is causing tremendous cultural distraction. Many small manufacturers are not prepared to culturally embrace what has to occur today to be competitive in the global landscape of tomorrow.”

Thus, thorough research is a must, and SMEs will only achieve Industry 4.0 by following SME-customized application tactics and fully understanding SME-adapted solutions. If not, there will not be much progress or successful results despite various efforts.

Luckily, learning new organizational skills and production processes and implementing them can be easier for SMEs because of their relatively smaller production scales. On the other hand, large companies might experience more difficulties since changing organizational culture will be much more challenging. Thus, SMEs must take this opportunity and try to adapt as quickly as possible to achieve a large competitive advantage.

Sweet Tips from Ally:

1. Research ways SMEs can quickly adjust to technological changes.
2. Figure out which advanced technologies will benefit your business the most.
3. Take advantage of your business size to get ahead of the game.