Have you ever heard of the concept of vertical integration in Industry 4.0? This structuring of data collection and utilization is fundamental for the companies of the future.
So, if you already intend to consolidate your system within the parameters of Industry 4.0, see what this technological model means and how it can lead the business to an innovative way of predicting and adapting to new demands. Check it out in the post!
What is vertical integration in industry?
When we talk about data integration in industry, there are two ways to structure IT and include technological processes in all aspects of a company.
The first of these is horizontal integration, which relates to the IT area’s ability to track, automate, and unite processes across an entire production chain, from dealing with suppliers to the customer. This is generally a linear monitoring mechanism that ensures efficiency in each stage of manufacturing.
However, having a well-defined line with quality production does not always guarantee business success. This tracking must also have a hierarchy associated with business intelligence that monitors, collects data, and transforms it into real action plans for process improvement.
This is called vertical integration. It is this second structuring method that enables chain information sharing from the shop floor to company executives.
In other words, while horizontal integration is a line, vertical integration is a pyramid that collects production data and filters it into reports and systems that can provide a much more refined understanding of bottlenecks and opportunities to improve industrial performance.
To achieve this full integration, it is up to the IT department to create a hierarchical structure across different levels capable of collecting and gathering information from various sources into a single system. These levels are:
- Field level: the automation of shop floor control using sensors and actuators;
- Control level: the responsibility of a Programmable Logic Controller (PLC), which condenses, regulates, and controls all automation at the field level;
- Production level: the point where general production data and results supervision are collected;
- Operation level: where information on production planning, quality management, and equipment efficiency resides;
- Enterprise planning level: the system will integrate the management of all previous levels to provide executives with a comprehensive and objective overview of the current business status as well as the paths they need to follow.
As you can see, this is a layered structure, hence the name vertical integration. In short, this model’s function is to make all data part of a single, comprehensible, and simplified system — from the simplest operating states in an auxiliary machine to the most complex business strategies.
What is the role of vertical integration in Industry 4.0?
And why should your IT team care about this implementation? Both horizontal and vertical integration are very important in the industry of the future, but the latter is especially necessary when a company seeks an overview of its productivity status and relies on data utilization for new business strategies.
Below, see why you should invest!
Increased productivity
Innovative manufacturing practices generate up to a 52% average increase in productivity. After all, analyzing data on such a broad scope allows IT professionals and other directors to find ways to better leverage their resources and redesign their production processes in order to produce more and better without needing to expand their infrastructure.
Cost reduction
Similarly, it is possible to cut costs by eliminating waste and automating tasks along the entire production line. These adjustment opportunities can be identified with the help of a robust integrated system and proactive IT.
Greater control over final delivery
One of the major challenges in industry generally is maintaining a stable quality standard at the end of the production line. Monitoring this process horizontally is very important, but through the vertical processing of this data, IT provides directors with more accurate information on production efficiency, as well as the tools necessary to make changes that truly make a difference.
Flexibility to meet new demands
We talk extensively about this integration as a way to provide more production control because this is crucial in Industry 4.0. Public demand requires faster adaptations, and business leaders need information that supports new ideas and points the way forward ahead of the competition.
The answers to these questions will be found in the collected data. Without integration from the bottom up, it is impossible to account for all the variables in this equation.
Incorporating IT into business strategies
Vertical integration is a sign that Industry 4.0 is ready to place IT at the center of new business strategies. Technological solutions are increasingly common as a response to market changes, and only the IT manager who maintains structure and organization in their system is able to assume this role.
Information security
If data is increasingly valuable to the company, it also becomes a target for criminals. With so much information being generated and exchanged in Industry 4.0 (M2M communication, automated monitoring, report tracking by operators, etc.), it is impossible to ensure its protection without integrating all this control into a single environment!
Support for new investments
Finally, with all this information regarding productivity, quality, and security, it becomes much easier to forecast and prepare for the future.
Vertical integration is a bridge between strategy and execution. When your system is fully ready to monitor the entire industry, your growth paths will be much more clearly defined. It is the beginning of a new era where even the simplest data can turn into insights for complete overhauls.
How to seek technology solutions for this integration?
And of course, it is impossible to achieve this level of integration and automation without investing in the technology sector. Therefore, your role now is to understand this importance and convey the idea to other directors so that everyone works together toward this objective.
This means acquiring or contracting more infrastructure, seeking tools, software, and systems that fit your production. Furthermore, if possible, it is also a great idea to rely on specialized partners to identify the best solutions and implement them successfully.
Vertical integration is not just one of the pillars of Industry 4.0; it is the foundation that will structure all business intelligence. And if you are ready to be the origin of this change, also read our article on the skills of the Industry 4.0 Professional.
