Overall productivity growth has dropped since the 1970s. There are a number of factors at play, but a lot of it has to do with the fact that our taste as consumers has changed. We want smarter products with microelectronics, semiconductors and embedded software.
But as products get smarter, their complexity increases. A modern Android operating system has 12 million lines of code, for example. And modern car has more than 100 computers on board that control every aspect of a car’s dynamics and a driver’s comfort. Products become even more complex if we include the ability to configure almost infinite combinations of colors, styles, accessories, engines, performance enhancements and interior designs.
Current manufacturing technology is struggling to keep up. It’s as though productivity, flexibility and quality are three mutually exclusive options that manufacturers have to decide between. The more the market expects a product to be individualized and of high quality, the more productivity suffers.
In 2011, the German government realized its manufacturing base would hit a brick wall if this continued. So, the government launched the Industrie 4.0 initiative precisely to find a solution to that large challenge.
It wanted to apply the same digital technologies revolutionizing the business world to manufacturing and offer bespoke tailoring of complex products at greater efficiency than mass production. The German government wasn’t interested in making incremental improvements. It was looking to make a fundamental paradigm shift in the way manufacturing worked: a fourth Industrial Revolution.
The new paradigm Germany had in mind involved moving from fixed lines to completely flexible factories. Products and machines communicate. Robots and humans work side by side. The intelligence of how products should be made are in the products themselves.