If you fly over the Midwest, you may miss out on the excitement of a Big Ten college football game or catching trophy walleye in Lake Erie.
You may also miss out on one of the most exciting technological advances in the country – happening smack dab in the middle of Troy, Michigan.
Benzinga spoke with Tom Kelly, chief operating officer of Automation Alley, an organization dedicated to helping small and medium sized manufacturers reshore jobs and manufacturing and compete with foreign entities – all through a unique German platform called Industry 4.0.
Benzinga: What exactly is Industry 4.0?
Tom Kelly: Industry 4.0 is the fourth industrial revolution, after mechanization, mass production, and computers and automation. In a nutshell, it is the marriage of the physical world with the digital world. What it means is the ability to model, replicate, simulate and visualize the physical plant.
With Industry 4.0, lots of good things start to happen. You can, for example, simulate changes to the production cycle effortlessly. You can simulate changes to the development of a product safely.
How does Industry 4.0 function from a practical sense?
You can simulate all kinds of things in a virtual world. It’s called “digital twinning,” something General Electric is betting its business on.
With digital twinning you can create several dramatic efficiencies, all at once, then overlay big data and run analytics very quickly to optimize the results. You can get lost in that virtual space in a completely safe manner.
How is Industry 4.0 disruptive?
First, 4.0 is a big elephant. The promise is that it can make dramatic efficiencies in the production cycle and allow manufacturers to make very good decisions about to manage their plants going forward.
In a real way, Industry 4.0 allows companies to interact with the physical world in a way that lets them become much smarter about what they are doing.
Tom KellyTom Kelly
Who exactly does 4.0 disrupt?
At the macro level it’s extremely disruptive to labor-intensive markets. Twenty years ago the manufacturing exodus started to China which has a low-cost labor pool. Now Mexico is in that same category.
With Industry 4.0, labor becomes less of the equation and is replaced by innovation. With innovation we can start reshoring manufacturing because a robot in Michigan or Ohio is the same as a robot in China – just closer.
If I don’t have to ship the parts to China and ship them back, and I have 10 people here versus 100 laborers in China, I can compete. That’s incredibly disruptive and in a positive way. We are excited and bullish about the future of manufacturing in America because this competitive advantage is not easily replicated.
Twenty years ago it was, to borrow from Ross Perot, a sucking sound as jobs and manufacturing left the U.S. Now if China has the ability to innovate and the U.S. has the ability to innovate, I like our odds.
How does Automation Alley fit into the picture?
Industry 4.0 is not widely adopted or understood. Automation Alley has nearly 1,000 member businesses and organizations. Almost 80% of them are small and medium sized businesses.
We understand that the large corporations of the world have enough capital and resources and enough brains to take care of themselves. Our role is to get the message out to the small and medium sized business industry to not be afraid but to learn to harness the power of the future to remain relevant in the new world that’s coming.
So, is Automation Alley more of a consortium for small and medium business?
Yes. Exactly. We’re not going to move the needle for the big guys but when you get away from the largest companies the ability to adapt drops off like a cliff. It has to do with what smaller companies can afford and how they can keep up with rapid changes.
A consortium can keep its eye on the ball, which we do through our committee structure. We have committees focused on modeling and simulation, on cyber security and on manufacturing.
The idea is to get all of these committees driving to the same singularity – to interrelate to change industry.
How did Automation Alley come into being?
Automation Alley started in 1999 under the leadership of Oakland County, Michigan executive, L. Brooks Patterson and the organization’s first executive director, Ken Rogers.
At the time it was recognized that there was a lot of technology in southeast Michigan but most people saw the Detroit area as nothing more than a dirty old rustbelt auto town.
We are now the largest technology organization in Michigan. We began with a mission to try to get the word out. Seventeen years later, we’re still trying.
This article is exclusive to Nasdaq.com.
