Industrie 4.0, or Industry 4.0, was conceived in 2011 as a forward-looking project under the German Federal Government’s High-Tech Strategy, focusing on information and communication technology. It has been developed further to include production research and user industries. The strategy is to allow Germany to stay a globally competitive, high-wage economy. The term “Manufacturing 4.0” is extrapolated from the “Industry 4.0” strategy and they are often used interchangeably.

What does it mean?

The first industrial revolution was the mechanization of production using water and steam power. The second industrial revolution introduced mass production with the help of electric power. The third industrial revolution is the digital revolution. Now, Industry 4.0 refers to the fourth industrial revolution – the Internet of Things, Data, and Services, or more specifically, the Smart Factory.

The focus of “Smart Factories” is on intelligent production systems and processes and the realization of distributed and networked production sites. In the Internet of Things, IT is already at the heart of production systems. In Industry 4.0 and the Smart Factory, virtual and physical worlds will interact seamlessly as intelligent objects communicate and interact with each other. Machines, components, systems, and human beings autonomously exchange digital information, trigger actions, and control each other via the Internet protocol.

Why is this important?

Industry 4.0 connects embedded system production technologies and smart production processes to pave the way to a new technological age which will radically transform industry and production value chains and business models.

Just as a smart phone or mobile device is a convergence of many technologies, so too the smart factory will be a convergence of the virtual and the physical worlds through cyber-physical systems. The smart factory will provide significant real-time quality, time, resource, and cost advantages in comparison with classic production systems. There are five areas of particular change that would affect the way manufacturing companies do business:

  • Smart products themselves
  • Working practices in the smart factories that will produce them
  • Horizontal integration of business and manufacturing processes involving suppliers and customers
  • End-to-end lifecycle management of product information
  • Resolution of who now inside a business will be in charge of the whole process

As technology appears to move at the speed of light, you can expect that much of the concept of Industry 4.0 will come to fruition in the very near future. Being aware of the end goal and the competitive advantages helps companies strategize for this future.