What is industry 4.0?

Industry 4.0 technologies revolutionize the automation, monitoring, and analysis of supply chains through smart technology.

Industry 4.0 overview

Industry 4.0 has reinvented how businesses design, manufacture, and distribute their products. Technologies such as Industrial Internet of Things (IIoT), cloud connectivity, AI, and machine learning are now deeply woven into the manufacturing process. This unified and integrated approach to manufacturing results in products, factories, and assets that are connected and intelligent.

 

Today’s Industry 4.0 initiatives also look to develop symbiotic and rewarding collaborations between people and technology. When the accuracy and speed of 4.0 tools comes together with the creativity, talent, and innovation of your people, you get a win/win for both your workforce and your bottom line. Your manufacturing operations become more efficient and productive, and your teams are relieved of a lot of mundane and repetitive tasks – giving them the opportunity to collaborate with smart technologies and better equip themselves for the evolving technological landscape and the AI-powered future of work.

The general definition of Industry 4.0 is the rise of digital industrial technology … Industry 4.0 transformations allow us to work alongside machines in new, highly productive ways.

– Daniel Burrus

Industry 4.0 definition

Industry 4.0 can be defined as the integration of intelligent digital technologies into manufacturing and industrial processes. It encompasses a set of technologies that include industrial IoT networks, AI, Big Data, robotics, and automation. Industry 4.0 allows for smart manufacturing and the creation of intelligent factories. It aims to enhance productivity, efficiency, and flexibility while enabling more intelligent decision-making and customization in manufacturing and supply chain operations.

 

And any definition of Industry 4.0 would also have to include its origin from the term Fourth Industrial Revolution. Since the 1800s, we have experienced three industrial revolutions. They were called “revolutions” because the innovation that drove them didn’t just slightly improve productivity and efficiency – it completely revolutionized how goods were produced and how work was done. We are now in the Fourth Industrial Revolution, aka Industry 4.0.

 

First industrial revolution

By the early 1800s, the First Industrial Revolution was underway. The invention of the steam engine reduced industrial reliance on animal and human labor, ushering in a new age of manufacturing and precision engineering.

 

Second industrial revolution

A century later, the growing use of petroleum and electric power meant that machinery could be leaner and less cumbersome. The Second Industrial Revolution was driven by the assembly line and mass production processes, many of which are still in use today.

 

Third industrial revolution

Around the middle of the 20th century, computers hit the scene. The Third Industrial Revolution saw the early development of factory automation and robotics. This era also saw the first use of computerized business systems that were built to manage and analyze data.

 

Fourth industrial revolution

Today, manufacturing is increasingly powered by information. Vast amounts of data come from across the business and around the world, in real time, around the clock. AI is at the heart of the Fourth Industrial Revolution, allowing manufacturers to not only gather all that data but use it – to analyze, predict, understand, and report. Industry 4.0 is not characterized by a single technology. It is defined by the seamless integration of a number of systems, tools, and innovations.

Industry 4.0 technologies

Industry 4.0 is built on nine technology pillars. These innovations bridge the physical and digital worlds and make smart and autonomous systems possible. Businesses and supply chains already use some of these advanced technologies, but the full potential of Industry 4.0 comes to life when they’re used together.

Industry 4.0 technologies

  1. Big Data and AI analytics: In an Industry 4.0 landscape, Big Data is collected from a wide range of sources. Of course, this includes capturing data from assets, equipment, and IoT-enabled devices. Data sources also extend outside the factory floor, into other areas of the business and the world. They can include everything from customer reviews and market trends that inform R&D and design, to weather and traffic apps that help ensure smoother logistics. Analytics powered by AI and machine learning are applied to the data in real time – and insights are leveraged to improve decision-making and automation in every area of manufacturing and supply chain management.
  2. Horizontal and vertical integration: An essential framework of Industry 4.0 is horizontal and vertical integration. With horizontal integration, processes are tightly integrated at the “field level” – on the production floor, across multiple production facilities, and across the entire supply chain. With vertical integration, all the layers of an organization are tied together – and data flows freely from the shop floor to the top floor and back down again. In other words, production is tightly integrated with business processes like R&D, quality assurance, sales and marketing, and other departments –reducing data and knowledge silos and streamlining operations.
  3. Cloud computing: Cloud computing is the “great enabler” of Industry 4.0 and digital transformation. Today’s cloud technology provides the foundation for most advanced technologies – from AI and machine learning to IoT integration – and gives businesses the means to innovate. The data that fuels Industry 4.0 technologies resides in the cloud, and the cyber-physical systems at the core of Industry 4.0 use the cloud to communicate and coordinate in real time.
  4. Augmented reality (AR): Augmented reality typically overlays digital content on to a real environment. With an AR system, employees use smart glasses or mobile devices to visualize real-time IoT data, digitalized parts, repair or assembly instructions, training content, and more – all while looking at a physical thing like a piece of equipment or a product. AR is still emerging but has major implications for maintenance, service, and quality assurance, as well as technician training and safety.
  5. Industrial Internet of Things (IIoT): The Internet of Things (IoT) – more specifically, the Industrial Internet of Things – is so central to Industry 4.0 that the two terms are often used interchangeably. Most physical things in Industry 4.0 – devices, robots, machinery, equipment, products – use sensors and RFID tags to provide real-time data about their condition, performance, or location. This technology lets companies run smoother supply chains, rapidly design and modify products, prevent equipment downtime, stay on top of consumer preferences, track products and inventory, and much more.
  6. Additive manufacturing/3D printing: Additive manufacturing, or 3D printing was initially used as a rapid prototyping tool but now offers a broader range of applications, from mass customization to distributed manufacturing. With 3D printing, parts and products can be stored as design files in virtual inventories and printed on demand at the point of need – reducing both costs and the need for off-site/off-shore manufacturing. Every year, the extent of 3D printing grows more varied, increasingly including base filaments such as metals, high-performance polymers, ceramics, and even biomaterials.
  7. Autonomous robots: With Industry 4.0, a new generation of autonomous robots is emerging. Programmed to perform tasks with minimal human intervention, autonomous robots vary greatly in size and function, from inventory scanning drones to autonomous mobile robots for pick and place operations. Equipped with cutting-edge software, AI, sensors, and machine vision, these robots are capable of performing difficult and delicate tasks – and can recognize, analyze, and act on information they receive from their surroundings.
  8. Simulation/digital twins: A digital twin is a virtual simulation of a real-world machine, product, process, or system based on IoT sensor data. This core component of Industry 4.0 allows businesses to better understand, analyze, and improve the performance and maintenance of industrial systems and products. An asset operator, for example, can use a digital twin to identify a specific malfunctioning part, predict potential issues, and improve uptime.
  9. Cybersecurity: With the increased connectivity and use of Big Data in Industry 4.0, effective cybersecurity is paramount. By implementing a Zero Trust architecture and technologies like machine learning and blockchain, companies can automate threat detection, prevention, and response – and minimize the risk of data breaches and production delays across their networks.

Manufacturing 4.0 solutions in action

The digital transformation associated with Industry 4.0 brings about both cultural and operational evolution. By unifying and connecting people, data, and assets, you create an almost limitless range of potential optimizations. Below are a few examples of how Industry 4.0 solutions are improving efficiency, visibility, and sustainability in manufacturing and supply chains.

  • Collaborative Design Platforms: Industry 4.0 supports the creation of collaborative design platforms where R&D teams, product designers, and stakeholders from across your organization can access and contribute to design data and insights. This open approach fosters cross-functional collaboration, idea sharing and knowledge exchange, leading to more informed design decisions and the faster development of innovative, customer-centric products.

  • Predictive maintenance: By integrating IoT sensors and data analytics, manufacturing businesses can monitor equipment health in real-time. Predictive maintenance algorithms identify potential failures before they occur, allowing you to implement proactive processes which can reduce downtime by up to 50%, and extend asset lifespan as much as 40%.

  • Supply chain optimization: Industry 4.0 supports end-to-end visibility across your global supply chain. With real-time data from suppliers, inventory levels, production schedules, customer demand, internal teams, and much more, you can optimize logistics, balance supply and demand, improve order fulfillment, and enhance your overall supply chain and manufacturing efficiency.

  • Agile manufacturing: AI and advanced analytics allow you to gather and analyze real-time customer insights and feedback from sources like social media, online reviews, and customer support interactions. Your R&D teams and product designers can leverage this data to identify consumer preferences, pain points, and emerging trends. By incorporating this feedback into the design process, your teams can quickly develop products that better align with market demands, improving satisfaction and loyalty, and driving innovation.

  • Quality Control and Defect Detection: Leveraging IoT devices and machine learning algorithms, you’ll be able to collect real-time data from all your production lines. By continuously monitoring the manufacturing and production process, you can detect anomalies, identify quality issues, and take corrective actions quickly, making sure you’re always on top of product quality.

  • Circular Economy Practices: Industry 4.0 supports the implementation of circular economies, focusing on reducing waste and maximizing the reuse, refurbishment, and recycling of materials. By utilizing Big Data analytics and IoT networks, you can track product lifecycles, implement reverse logistics for product returns, and optimize the recovery of valuable resources. What’s more, AI-powered advanced analytics can also help your product designers to develop products – right from the drawing board – that are built to be more sustainable, waste fewer resources, and be more easily recycled or repurposed.

  • Carbon Footprint Monitoring and Optimization: Industry 4.0 technologies facilitate the collection and analysis of real-time data on energy consumption, transportation emissions, and other factors contributing to a company's carbon footprint. By accurately measuring and monitoring emissions, you can identify areas for improvement, implement energy-efficient measures, and develop strategies to reduce your overall carbon footprint, helping you to meet your increasingly ambitious sustainability goals.

Industry 4.0 benefits summarized

Industry 4.0 represents more than simply a technology upgrade. By knocking down silos and connecting teams and operations across your manufacturing landscape, you begin to establish a more transparent and holistic way of doing business – that can eventually extend across all areas of your organization.

 

Operational efficiency is enhanced with improved resource allocation, reduced downtime, and better productivity. This efficiency extends to sustainability initiatives where analytics and smart automations can help you further optimize and streamline energy use, reduce waste, and even design and innovate products that are more sustainable throughout their lifecycle.

 

The fact that industry 4.0 solutions and tools let you collect, analyze, and interpret vast amounts of data in real-time – means that you can get actionable insights really quickly, giving you the power to make decisions with confidence and accuracy. This applies to customers as well, because their demands and expectations are also changing at lightning speed. So, real-time data analytics can help you adapt quickly to personalize products, and provide tailored solutions on demand.

 

We live in competitive and volatile times. Industry 4.0 tools and strategies help improve not only efficiency and productivity, but the ability to see around corners and gain a meaningful competitive advantage.

Frequently asked questions about Industry 4.0

Before you can determine a route, you need to know your starting point. A good first step is to audit and analyze existing processes, assets, and business systems. This will tell you where you are, help establish priorities, and even identify quick wins. Industry 4.0 solutions will result in significant benefit and impact across every area of your business. It is more than just an IT upgrade, so you should also ensure that you have executive buy-in and engagement.

The simple answer is yes. IoT gateway devices can often be retrofitted to older machinery. These devices empower IoT sensors to transmit performance data. In some cases, video cameras and heat sensors can be also be fitted and connected to provide a more robust picture. The age and function of the machinery will determine the best solution – and an audit and analysis can help determine the long-term value of retrofitting versus replacing legacy assets.

A robust  ERP system is the “brains” behind an Industry 4.0 technology stack. The ERP of the past largely ran office-based processes whereas today an intelligent ERP system is the hub for connected processes across manufacturing, logistics, engineering, and many other areas of the business. Part of your digital transformation will be to determine if your existing ERP system is equal to the task. 

Legacy ERP systems running on outdated, disk-based databases are being pushed to the limits of what they can do. The ability to leverage the data you receive from connected factories, assets, products, and people will be dependent upon the capabilities of your ERP. Is it intelligent? Does it offer embedded technologies like AI, machine learning, and analytics? How fast is its database? If you are running an older system, it might be time to upgrade in order to take advantage of Industry 4.0.

Which technologies you start with will depend on which processes are the most critical to your core business model – and which areas of your company stand to benefit the most from transformation. When getting started, companies often focus on one core technology at a time. By their design, Industry 4.0 solutions deliver a lot of robust Big Data and insights that can help you accurately assess their ROI and benefits.  This makes it increasingly smooth to integrate subsequent areas of the business.

Unlike many major foundational changes, digital transformation can be undertaken incrementally, without significant disruption to the business. Starting with a robust ERP system and digital transformation roadmap, many Industry 4.0 solutions can be rolled out almost immediately. 

Change is hard. We get that. When companies switched to computers from typewriters, it was met with resistance by a workforce that felt overwhelmed by their complexity. But unlike those early technological transformations, Industry 4.0 solutions actually reduce complexity for the user, rather than add to it. Workflows are streamlined, manual and repetitive tasks are automated, and the interfaces are more intuitive.  Furthermore, many 4.0 technologies facilitate training, such as AR wearables and mobile-optimized experiences. 

If 2020 has taught us anything, it’s that we can’t always see what’s coming. And while we can’t predict the future, we can take steps to ensure that we’re more resilient and better prepared for it.  The best in-memory ERP systems are scalable and support unlimited workloads, and Industry 4.0 technologies are developed specifically to ramp up to support future growth and adapt to unexpected change.

Some of the most fundamental elements of Industry 4.0 software solutions are built-in scalability and the capacity for agility and resilience. If your business or production model has to radically change to meet market demands, your Industry 4.0 systems will give you the insights and confidence you need to adapt and implement change quickly across.

There is no question that the fourth industrial revolution will change the workforce. But it’s not repetitive labor that leads to innovation – it’s ideas and creative thinking. A digitally augmented workforce is freed up to use their heads instead of just their muscles. In 1980, there were only a few thousand computer programmers in the whole world. Today there are over 20 million. While many physical tasks will be taken over by robots, many more tasks will be created to run a digitally enhanced business.

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