ch13 industry 4.0

• Industry 4.0's provenance lies in the powerhouse of German manufacturing
• The conceptual idea of Industry 4.0 has been widely adopted by other industrial nations within the European Union, and further afield in China, India, and other Asian countries
• Industry 4.0 refers to the fourth industrial revolution, with the first three coming about through mechanization, electricity, and IT
• The fourth industrial revolution, Industry 4.0, will come about via the Internet of Things and the Internet of services becoming integrated with the manufacturing environment
• Benefits of previous revolutions in industry came about after the fact, whereas with the fourth revolution there is a chance to proactively guide the way it transforms our world
• The vision of Industry 4.0 is that in the future, industrial businesses will build global networks to connect their machinery, factories, and warehousing facilities as cyber-physical systems
• Cyber-physical systems will take the shape of smart factories, smart machines, smart storage facilities, and smart supply chains in Industry 4.0
• Industry 4.0 will deeply integrate with each stage in the horizontal value chain to provide tremendous improvements in the industrial process
• The smart factory will be at the center of Industry 4.0 vision, altering the way production is performed based on smart machines and smart products
• Products being assembled in smart factories will also have embedded intelligence to be identified and located at all times throughout the manufacturing process
• Smart products will know their own history and the future processes required to transform them into the complete product in Industry 4.0
• Smart products will provide alternative routing in the production process based on embedded knowledge of the industrial manufacturing process
• Vertical manufacturing processes in the value chain will be integrated with the embedded horizontal systems in Industry 4.0
• Smart factories will control the end-to-end management of the entire manufacturing process from supply chain through to services and lifecycle management in Industry 4.0
• Smart factories are ideal for small- and medium-sized enterprises due to the flexibility they provide in decision-making and dynamic process control
• Dynamic process control in smart factories enables better decision-making, last-minute design changes, addressing customer preferences, and accommodating individual custom orders
• Industry 4.0 will require the integration of Cyber-Physical Systems (CPS) in manufacturing and logistics while introducing the Internet of Things and services in the manufacturing process
• Benefits of Industry 4.0

  • New ways to create value
  • New business models
  • Downstream services for SMEs (small medium enterprises)
• Industry 4.0 is the fourth industrial revolution, focusing on organization and control over the entire value chain of product lifecycle to meet individualized customer requirements
• The basis for Industry 4.0 is the availability of all relevant information in real time by connecting all instances involved in the value chain
• Industry 4.0 involves the connection of people, things, and systems to create dynamic, self-organizing, real-time optimized value-added connections within and across companies
• Industry 4.0 depends on the digitization and integration of horizontal and vertical value chains, digitization of products and services, and innovated business models
• Industry 4.0 involves technologies and concepts of value-chain organizations, with CPS monitoring physical processes and creating virtual copies of the physical world
• Industry 4.0 enables CPS to communicate and cooperate with each other and humans in real time, offering internal and cross-organizational services via the IoS
• Industry 4.0 integrates horizontal and vertical channels, driving businesses and manufacturers to keep up with rapid changes driven by enabling technologies
• Industry 4.0 is a revised approach to manufacturing that utilizes the latest technological inventions and innovations, merging operational and information and communication technology
• Industry 4.0 deploys advancements in operational, communication, and information technology to increase automation and digitization in production processes, aiming to improve efficiencies and product quality
• Industry 4.0 aims for higher quality without compromising on price, leading to the development of smart factories for improved efficiencies and increased profits
• Automation in industry, rooted in the 80s, aimed for efficiency in manufacturing, resulting in the loss of many low-wage manual workers' jobs
• The rise of the machine and automation in industry caused concerns about the future of manufacturing and the impact on human jobs
• The desire for efficiency in manufacturing in the 80s resulted in the loss of many low-wage manual workers jobs
• The rise of the machine and the robot came about through computers, IT, and semi-intelligent robots replacing many workers
• The fourth industrial revolution is a transition to the digital transformation of the manufacturing industry, merging the physical and digital worlds, which does not necessarily mean downsizing
• Industry 4.0 has come about through several technological advances
• Technological advances contributing to Industry 4.0

  1. Rapid increase in data volumes, cloud storage, rental computing power, and ubiquitous network connectivity enabling analysis of operational data

  2. Advancement of analytics capabilities for successful product development and efficiency improvements

  3. Introduction of new forms of human and machine interactions

  4. Innovations in easing the transfer of digital data to something physically usable
• Industries find it imperative to keep up with the times, especially if they plan to remain competitive
• Main characteristics of Industry 4.0

  • Vertical integration of smart production systems
  • Horizontal integration through global value chain networks
  • Through-engineering across the entire value chain
  • Acceleration of manufacturing
• Vertical integration of smart production systems


  • Smart factories cannot work on a standalone basis and require networking of smart factories, smart products, and other smart production systems
• Horizontal integration through global value chain networks

  • Facilitation of networks that create and add value, including relationships between business partners and customers, and integration of new business models across countries and continents
• Through-engineering across the entire value chain

  • Tracing the complete lifecycle of the product from production to retirement, focusing on quality and customer satisfaction throughout the process