In our first instalment of “Digital Revolution of Industrial Real Estate” we discussed some of the Key Drivers of Industry 4.0 and what it means for investors. In this part, we’ll look at how data, computing and connectivity will improve operational efficiencies and cut down the time between production and delivery of end-products.
Industrial Internet of Things (IIoT)
The Industrial Internet of Things uses communications between smart machines to monitor and perform remote operations on high-value assets in real time. This allows better efficiency and improved autonomous Just-In-Time manufacturing.
IIoT will guide predictive maintenance so equipment does not go offline. In addition, systems seamlessly adjust to match demand, thus optimizing their use of raw materials and reducing overall cost. These reductions in downtime and process improvement leads to creation of new business models and innovation in turn.
The impact of these trends on Real Estate means factories will require office and lab-like spaces. Uninterrupted power will also be required, in addition to high speed internet connectivity. This leads the need of significant redundancy infrastructure.
Data Driven Manufacturing Boosts Productivity
Data driven manufacturing refers to the widespread deployment of low-cost sensors and their connection to the internet to apply big data analytics in the next generation manufacturing process. The benefits are enormous, with significant cost savings, improved productivity, a faster time to market, and the potential for new types of after-sales service hailed as just some of the advantages of data driven manufacturing.
The impact on the industrial market is the increase of productivity, as production down time is lowered with active preventative maintenance. There are also cost savings due to better identification of redundancies and production bottle necks. Efficiency increases as processes can be refined and improved through data derived from the production line.
In terms of real estate – dedicated space will be required for servers and mini data centres, equipped with the necessary cooling platforms to support these systems. In the future, office and lab like spaces will also be required to support data scientist in the factories.
Autonomous Vehicles to speed up Last Mile Deliveries
Autonomous Vehicles or self-driving vehicles can navigate themselves to a pre-determined destination. Self-driving vehicles/trucks are likely to materialise in the near future.
Although most of us think of self-driving taxis and cars, the real impact of these would be on the industrial market, with the automation of freight trucks that can operate on short notice anytime and anywhere, making deliveries on demand. Software trucks have also displayed the ability to drive faster, and closer to each other to shield themselves from wind resistance thus completing their trips faster and more efficiently. This also increases safety and significantly reduces the burden on human drivers.
These trucks will greatly benefit factories located on highways, as they are only able to operate safely on highways. They may also drive greater demand for last mile delivery facilities with a diverse set of loading bays to receive automated truck convoys.
Data Centres at a fraction of the cost
Micro Data Centres are compact, self-contained data centre architecture. They contain all components that a traditional data centre is made up of including in-built security systems, flood and fire protection, and cooling systems. They generally provide lower latency as compared with traditional data centres, and provide greater reliability as data is not processed at only one site. The increasing use of IIoT is also likely to increase the appeal of Micro data centres.
The flexibility and lower operating and setup costs for micro data centres may spur manufacturing firms to set up in-house facilities. With real time data processing capabilities, the framework for IIoT is set.
Micro data centres are very power and connectivity reliant, and will require feature redundancies such as on-site cooling and security. Infrastructure of a smaller scale can rely on offshore cloud services should regulations permit.
ASRS Warehouses Saves Space
Warehouses featuring automated storage and retrieval systems (ASRS) are the hype these days. These warehouses depend on autonomous robots to haul heavy packages to improve the packing and shipping efficiency, generating significant productivity gains in the process.
Warehouse operators are increasingly recognizing the advantages of operating ASRS Warehouses and have progressively started to deploy ASRS capabilities in their warehouses to remain relevant.
ASRS warehouses are setting new standards for warehouse operators as clients expect faster and more accurate turnaround times. Robots are also more cost efficient than human workers and allow operators to hedge against rising labour costs. These robots also allow operators to manage labour shortages during peak holiday seasons.
The impact of this is the reduction of the human element, thus requiring less amenities such as parking due to reduced human workforce. ASRS platforms also require flat flooring in order to manage the warehouse robots.
By Dennis Yeo, Managing Director, Industrial and Logistics, APAC, CBRE.