The 4th industrial revolution (4IR) is in the process of transforming that basis of economic life: how we make things.

What’s driving the 4IR is what drove the first three industrial revolutions, technological innovation. But while steam, electricity and the shift to digital drove the first three, breakthroughs on the Internet of Things (IoT), automation, artificial intelligence, large data, and connectivity are driving the fourth.

Here are some specific ways business will drastically change as the 4th Industrial Revolution takes hold.

Product lifetime will rival manufacturing procedure in importance

As new versions of product provision surface, new procedures will complement the manufacturing process, stealing some of its relative importance from it.

Think about how the as-a-service economic model functions, and how it differs from the provision model that prevailed until recently. In the old model, manufacturers made products, which were sold to customers, and there the producer-customer relationship essentially ended. 

Producers had one opportunity to make their products work: during manufacture. After that, their products were out of their hands.

The as-a-service economic model that’s been emerging with the 4th Industrial Revolution offers another way. Once an enterprise purchases software or IoT-enabled smart lighting “as a service,” according to a subscription model, product lifetime becomes a crucial concern for the producer. 

After all, the producer still owns the product that it is licensing out to the customer. Renewals depend on that product’s continued viability.

But that’s understating the matter. In fact, renewals can depend on that product’s becoming even better. In the way that, for example, a “smart” product’s machine-learning capabilities get keener with use, or should. The manufacturer is on the hook for the whole product lifetime, to the benefit not just of the customer, but of innovation itself.

Planning Will Mesh with Action

Traditional business was a heavily bureaucratic affair. Logistics experts did all the planning as they ensured that supply chains delivered necessary materials, that complementary parts joined up with each other when they needed to, and so on.

Planning is still crucial to manufacturing, even during the 4th Industrial Revolution. What human enterprise can do without it? However, it’s a different sort of planning. The advent of big data and of AI applications that can crunch it fast, generating tactical and strategic insights, means that planning will increasingly be integrated into, and identical with, the production process itself. No longer will it represent a stage that ends before production even begins.

The speed and flexibility of the new manufacturing complex that exists at the intersection of data, AI, the IoT, and robotics will make potential situations in which, say, logistical chains are tweaked and improved before a human manager will even know that something was amiss in the first place.

Is a bottleneck in China slowing production in Bangladesh? Forget the plan, the new system will adjust the chain in real time. Is more sunlight than usual making it possible to use less electricity in a corporate office? An IoT-enabled “smart” lighting system will adapt to the new reality, without human beings needing to go back to the drawing board.

Lean Manufacturing Will Yield to Smart Manufacturing During the 4th Industrial Revolution

Lean manufacturing seeks to cut redundancy and waste throughout industrial processes. As might be expected, it relies heavily on employee buy-in and participation. Employees as well as managers need to dedicate themselves to identifying inefficiencies in their own work and suggesting fixes.

As the 4th Industrial Revolution transforms generation, lean manufacturing is yielding to smart manufacturing. The latter, defined as it is by a range of up-to-the-minute technologies, isn’t”lean” in the accustomed sense. Lean manufacturing is about removing superfluous melodies, and the tools that play them, from the orchestral score. Smart manufacturing is about composing more intricate melodies, for a greater number of more complex instruments.

And yet this”smart” complexity can create an orchestrated whole that’s more efficient than a lean setup. A “smart” factory that employs an IoT method to minutely trace where components and materials are along a supply chain can make”lean” methodologies like”just-in-time” provisioning work better than they did before.

Saving Money Will Make Less Sense than Creating New Revenue Streams

New tech will see the imperative to save money downgraded in importance. It will now be important to devise novel ways to make money. No, managers won’t embrace profligacy. But they will be alive to the possibilities of 4th Industrial Revolution technology, and they’ll be wise to cultivate those even as, or before, they cut inefficiencies.

To give one example, the IoT-enabled sensor technician embedded in, say, new turbines will pulse out valuable data testifying to the attrition rates of component parts, to how much electricity the machinery is using, and so on. 

That data opens up for a manufacturer the chance to branch out and provide profitable predictive maintenance services over time. Or it can sell broader consultative services pertaining to how to optimally exploit such machines during their lifetimes.

In another scenario, data testifying to how users are customizing or “hacking” gear for certain uses can give manufacturers ideas for new products to develop.

Information will Supplant Expertise as the Basis for Decision-Making

In a new industrial regime where real-time data exists in amounts that overwhelm the human capacity to process it, prediction and planning will become something similar to exact sciences. The days when an experienced manager would “eyeball” a machine to determine the magnitude of its wear and tear are over.

Now, a machine learning application will calculate down to the day when that machine is going to expire. That experienced manager, meanwhile, will be freed up to use his or her expertise in other areas.

These five aren’t the only changes that the 4th Industrial Revolution will bring to our production operations. But they are among the ones that are already making themselves felt as we set off along the path of a transformation that will have thrilling implications for our economic life.