In manufacturing settings, data collection and analysis are often a time-consuming, challenging, and costly process. It also hinders the use of advanced machine learning and data-driven methods which require a substantial amount of offline training data to generate good results. It is particularly challenging for small manufacturers who do not share the resources of a large enterprise. Recently, with the introduction of the Internet of Things (IoT), data can be collected in an integrated manner across the factory in real-time, sent to the cloud for advanced analysis, and used to update the machine learning model sequentially. Nevertheless, small manufacturers face two obstacles in reaping the benefits of IoT: they may be unable to afford or generate enough data to operate a private cloud, and they may be hesitant to share their raw data with a public cloud. Federated learning (FL) is an emerging concept of collaborative learning that can help small-scale industries address these issues and learn from each other without sacrificing their privacy. It can bring together diverse and geographically dispersed manufacturers under the same analytics umbrella to create a win-win situation. However, the widespread adoption of FL across multiple manufacturing organizations remains a significant challenge. This study aims to review the challenges and future directions of applying federated learning in the manufacturing industry, with a specific emphasis on the perspectives of Industry 4.0 and 5.0.
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