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Man viewing parts in augmented reality

What is augmented reality?

If you’ve ever used a street view service to get to know a neighborhood before you travel, or an interior decoration app to see what furniture looks like in your living room, you’ve already experienced augmented reality (AR). In entertainment, there are plenty of AR examples: filters that alter the appearance of a person in a photo, games that blend real and virtual spaces, and apps that place virtual characters within a physical environment. 


But what is AR for business? It’s technology that meets specific business needs in a number of surprising and innovative ways. It’s also one of the pillars of Industry 4.0, the fourth industrial revolution that’s transforming business just as previous revolutions have in centuries past. 


Augmented reality definition

Augmented reality is an interactive experience that enhances the real world with computer-generated perceptual information. Using software, apps, and hardware such as AR glasses, augmented reality overlays digital content onto real-life environments and objects. This enriches the user experience and turns one’s immediate surroundings into an interactive learning environment which is particularly valuable in manufacturing and Industry 4.0 processes. It allows industrial users to become “one” with the systems and machines they work with, and to optimize and augment technology and IoT networks with human ingenuity, observation, and creativity. 

How does augmented reality work?

Augmented Reality works by superimposing digital information onto real-world objects to create a 3D experience that allows users to interact with both the physical and digital worlds. But AR does not and cannot exist in a silo; its true value is in being part of a cloud-connected Industry 4.0 ecosystem that incorporates everything from big data to automated robots.


Here’s an overview of the augmented reality process:

  1. An AR-enabled device with a camera such as smart glasses, a tablet, or a smartphone parses a video feed to identify a physical object or the environment around the user, such as a piece of machinery or the layout of a warehouse. 
  2. A digital twin – a 3D digital replica of the object in the cloud – connects the real and virtual environments. It collects information from the physical object and digital
  3. The augmented reality device then downloads information about the object from the cloud. It superimposes digital information over the object using markers or trackers like GPS, accelerometers, orientation and barometric sensors, and more. This creates a part-real, part-digital 3D interface.  
  4. Thanks to real-time data flowing from products, the user can interact with the object or environment by moving around and sending commands to the cloud through a touchscreen, by voice, or with gestures. 

What is mixed reality, or augmented reality vs. virtual reality?

While the differences between augmented, virtual and mixed reality are subtle, each type of technology interacts differently with the real and virtual worlds.  



  • Virtual Reality: Virtual reality, or VR, removes people from the real world and fully immerses them in a virtual world using a head-mounted display or headset. In that virtual world of imagery and sounds, users can move around in all directions, manipulate objects, and more. VR is often used in healthcare, architecture, and education.  
  • Augmented Reality: AR enhances, or augments, the real world with digital information. While augmented reality apps work through mobile devices such as smartphones or tablets, in manufacturing and industrial settings where it benefits the user to have their hands free, glasses or headsets are the best gateways to the AR experience.  
  • Mixed Reality: MR blends imagination and reality so that users can both see and interact with the real world and the virtual environment simultaneously. Think of playing a virtual video game while drinking real coffee and offering an imaginary character some of your coffee in your game – you're mixing realities. 

Augmented reality provides users with an immersive, informational experience that can be hugely impactful in product development, as shown in this image. 

What is augmented reality used for in industry?

In industry, AR can be used for everything from asset identification to knowledge transfer in the field to training. By incorporating the physical with the virtual to augment the way people work, augmented reality gives workers more information and context about the product or machines they’re working on and the world around them.  


AR is commonly used in the following areas: 

  • Design and product development: Imagine being able to prototype virtual objects that designers and potential users can walk around and examine from every angle? Thanks to augmented reality, digital twins, and the IoT, product designers can bring products to life, test them, and adjust them before anything physical is ever built.  
  • Maintenance, operational control, and safety: With AR, workers can gain immediate information on any machine they’re interacting with. They can access the latest user manual or connect with an expert anywhere in the world to help them assess or repair an issue. This supports continuous production and non-disruptive performance.  
  • Employee and operator training and learning: Augmented reality allows employees to get trained on any machine or equipment “on demand,” turning their immediate surroundings into an ongoing learning platform. It can also provide environments and scenarios that allow employees to hone their skills while increasing productivity and safety.  
  • Quality control: Incorporating AR into quality control and assurance can help prevent defects during production, optimize the production process, and reduce time to market. For example, technicians wearing AR glasses can view a product and get information from IoT sensors embedded in the product components that generate information about each part and alert them to issues.  

Benefits of augmented reality in manufacturing

Many industries and manufacturers are adopting augmented reality because it drives operational efficiencies by reducing production downtime, identifying problems quickly, and keeping processes moving. 

Businesses that adopt augmented reality in manufacturing see an average productivity improvement of 32 percent. 

These are some of the key benefits AR provides in industrial and manufacturing environments: 



  1. Improved product development: Implementing AR during the design phase makes it possible for designers to respond to modern consumer demands for shorter product lifecycles and reduce costs associated with prototyping. 
  2. Simplified processes: Visualized workflows offering step-by-step instructions can support predictive troubleshooting while reducing mistakes that cause rework and speeding up complex assembly tasks for workers. 
  3. Streamlined warehouse management: AR can save time by managing inventory levels, guiding product picking, minimizing downtime by making it easier for technicians to diagnose and fix problems, and enhancing employee training. 
  4. Increased worker engagement: Because AR is a relatively new technology, the immersive quality of the 3D experience and the ability to learn by virtually doing is still novel for workers which boosts their engagement with the task at hand.
  5. Reduced risk: AR doesn’t just replace the work or function of real equipment and people; it also creates a safe, experiential learning environment that allows workers to practice tasks virtually without risk. This improves worker safety, inspection, training, and workflow. 

AR in manufacturing: Examples of augmented reality in action

Augmented reality is already being widely used in manufacturing in a variety of creative ways. 


Businesses are using AR-powered apps to offer step-by-step guides, documentation, manuals and more to help train new workers and upskill existing teams. This kind of hands-on training in digital environments can support or replace human trainers and make the workplace safer. And it’s all possible because AR offers easy access to information from anywhere in the world at any time with 3D models, step-by-step instructions, and opportunities for collaboration.  


Imagine creating a digital twin of your factory floor so that workers can do maintenance work more efficiently and remotely and optimize work on production lines. Digital twins can also be used to create mock-ups that show how a finished product will work, incorporate customer requests into designs, and help manage predictive maintenance. Industry 5.0-type integration with digital twin technology, where the digital twin acts as a clone of the physical object paired with IoT, makes this possible.


As a result of the Amazon Effect, today’s customers expect to receive their orders fast, and AR optimizing warehouse management and workflow with augmented reality can help make that happen. With an AR-powered warehouse app, employees can receive information about orders and instructions to fulfill each order most efficiently. The app also scans barcodes for them, saving time on manual barcode scanning. And once the order is complete, the inventory system is automatically updated.  

Smart manufacturing implementation: Next steps

According to Gartner, “smart manufacturing requires synchronizing activities for capability building, capability enablement and empowering people.” AR technology does just that, as part of a collection of 4.0 technologies that work together to achieve truly optimized industries and enterprises. 



Your industry 4.0 digital transformation journey can begin from wherever you are today. Every move toward a more connected, AI- and ML-powered operational infrastructure is one step in the direction of digital transformation that combines the power and efficiency of advanced technologies with the ingenuity and creativity of humans. 


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