24/10/2025 • Discover the four forces shaping the future of automation – from deglobalisation and demographic change to decarbonisation and digitalisation
The Industrial Internet of Things (IIOT) transformation will bring about a dramatic change in how factories are automated, affecting everyone in the manufacturing and engineering industries. In our latest blog, SEW-EURODRIVE’s Chief Innovation Officer, Dr Hans Krattenmacher, is outlining the key challenges we face moving forward, including the four forces – the four Ds - shaping the future of factory automation.
The Industrial Internet of Things, or IIOT, transformation in the manufacturing industry involves the integration of technologies within factories to create connected, data-driven production environments.
These integrations, involving technologies such as robotics, digital twins, and smart sensors, lead to increased efficiencies across the production line, alongside greater visibility, and enhanced decision making across the entire supply chain.
The global business environment has shifted dramatically in the past two decades, and globalisation, the process of increasing interconnectedness between places and people across the world, no longer operates as it once did.
Deglobalisation is the shift to a less connected world, where the interdependence between countries is reduced. This shift has been driven by the need for supply chain resilience, amid economic and political events across the world affecting production and supply.
Recent years have seen manufacturers face unprecedented supply shortages, and here at SEW-EURODRIVE, it was unlike anything we’ve seen in our almost 100-year history. Although we invested heavily in stocking critical components, especially in electronics, the supply chain crisis lasted far longer than expected.
For many manufacturers, this was a preview of a new era of supply chain volatility driven by geopolitical tension and economic uncertainty, at SEW we were able to take it in our stride. Our decentralised, entrepreneurial structure positions us better than most competitors - we can produce or at least assemble in China for China, America for America, UK for UK and so on.
This flexibility allows us to operate in both globalised and de-globalised markets, leveraging our worldwide connections with globally operating companies, whilst focusing on regional supply chains for stability.
The demographic of manufacturing workforces globally is changing drastically. While older, experienced workers retire, fewer young people are entering the industry, leaving large, often very specialised, skills gaps.
Depending in which region of the world you are up 35- 50% of the current manufacturing workforce is expected to retire within the next decade here at SEW-EURODRIVE - but we aren’t fearful.
Our automation strategy, including the design of our MOVI-C® automation system, is shaped by the reality of this demographic change - in the future, we’ll need fewer people to manage greater complexity.
New systems must therefore be designed to make that possible, and that’s where MOVI-C® comes in. Built to be flexible and scalable, MOVI-C® reduces complexity by offering a platform for everything, from planning and engineering, to control, inverters, and drives.
A single plug-and-play capable system, MOVI-C® removes the need for operators to have advanced technical knowledge of multiple systems, increasing efficiency and productivity, and reducing the skills gap as older workers retire.
Decarbonisation won’t be an unfamiliar concept to many - the shift towards greener production has been influencing the world of manufacturing for the past few years.
Europe has limited natural resources, making the need for a circular economy not just environmentally responsible, but strategically necessary. As we move further into the future, the countries and companies that master resource efficiency will gain competitive advantage.
Resource efficiency is the practice of using natural resources, like energy, alongside other materials, like metals or plastics, more effectively to limit waste and environmental impact, whilst maximising output. At production level, this involves considering the whole product lifecycle – welcoming initiatives such as recycling across the supply chain.
At SEW-EURODRIVE, we’re actively designing products with longer lifecycles, which are easier to reuse, recycle, and maintain. Our ECO2 drives, for example, are built from uncoated aluminium to support a more circular design approach.
As natural resources become scarcer and more expensive, the desire for competitiveness, not just sustainability, will drive adoption of greener practices.
Digitalisation, the process of using digital technologies to change how businesses operate, is the fourth major force shaping the manufacturing industry.
Digitalisation succeeds when it makes life easier. From CDs replacing vinyl to contactless payments replacing cash, people adopt digital solutions that save time, reduce effort, and increase comfort, even at the cost of other values like data privacy.
However, not all digitalisation works. Over-engineered, “smart”, tools that complicate basic tasks quickly fail. In the manufacturing industry, digitalisation must deliver measurable operational benefits, not just new features.
Digitalisation, at its core, is a productivity strategy. In consumer life it delivers convenience; in industry, it delivers efficiency. It does more in less time, at a lower cost, and with fewer people.
For this reason, digitalisation in the manufacturing sector is inevitable – it directly drives competitiveness.
Despite this, research from Leading Digital shows that machinery manufacturing remains among the least digitally mature industries, with manufacturers struggling to let go of hardware-driven legacy systems.
Industry 4.0 might’ve improved flexibility, but recent supply chain crises exposed major weaknesses in production visibility, with limited transparency, poor materials data, and slow rescheduling during shortages. These issues stem from factories designed around the assumption of constant material availability.
If the manufacturing industry wants to reap the benefits of digitalisation, then the next step beyond Industry 4.0 is software-defined factories. This is where layout, control, and optimisation are software-driven from the outset, enabling real-time simulation, rapid reconfiguration, and higher productivity.
Alongside this comes software-defined automation, which enhances human effectiveness by simplifying tasks and shortening deployment time - particularly useful when skilled labour shortages are growing.
This process requires close collaboration between Operational Technology (OT) and Information Technology (IT) teams. While the traditional automation pyramid separates these disciplines, going forward we’ll need to see seamless integration, with IT taking a greater role in factories, while OT will focus on real-time motion control.
Going hand-in-hand with software-defined automation, AI is the ultimate productivity multiplier. The “cordless screwdriver” for data, it can boost efficiency and unlock new capabilities previously out of reach.
The next stage will be AI agents that autonomously design and implement process improvements in fully digital factories. This is already emerging in China and will spread globally. Across the manufacturing industry, all companies must be ready to compete at this level.
Ready to get started with the future of factory automation? Get in touch with our team.