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Everything you need to know about Industry 4.0

22 Jun 2018
Industry 4.0 is an often-heard term. But what does it truly entail, and what can or should you do with it?

What is Industry 4.0?

Briefly put, Industry 4.0 responds to automation and data exchange trends by creating smart factories in which machines are connected and read out. It consists of several elements: cyber-physical production systems, the Internet of Things (IoT), cloud computing, and cognitive computing (systems that can take over human thinking processes in whole or in part). In these smart factories, information is linked to products. Every machine and process is able to communicate with every other application, device, and machine. With such interoperability in a company’s actions and processes, the types of errors, expenses, and delays experienced today will decrease in ways beyond our imagination. And no human intervention will be required to achieve this goal.


Although 76% of manufacturers currently work on a smart factory initiative, either at an early or more advanced stage, only 14% of companies are satisfied with the level of success (Source: Capgemini). Clearly, there’s still a lot to learn about Industry 4.0, especially when it comes to the question: What is the right way to go about it?

What is the goal and why should you care?

Industry 4.0 is interesting for several reasons. First, it allows you to gain thorough insight into a factory’s actual goings on, so processes can be optimized more quickly. Also, it is easier to share information with other chain partners, increasing the interconnections within the chain. Furthermore, having machines respond to each other and work together significantly reduces downtime. And finally, with Industry 4.0, machines are able to notice products that haven’t been manufactured correctly, after which they can either fix these or pull them from production.

What are the benefits of Industry 4.0?

Implementing Industry 4.0 is an ambitious and time-consuming endeavor. So why would companies get started with it in the first place? Below, we’ve listed the benefits.
  1. Reduced operational costs
    Field devices can communicate with each other, making important efficiency-related improvements. For example, labor planning will be improved and inventory will be reduced.
  2. Lower maintenance costs
    Predictive Maintenance will be improved when machines measure more and their intelligence is increased through algorithms. As a result, maintenance costs will drop and downtime will be reduced.
  3. Better decision-making
    Which products should you manufacture? How do you manage your departmental teams? Make faster and more well-informed decisions with Industry 4.0.
  4. Constant improvement
    Safety-, productivity-, and quality-related processes are currently improved manually. Industry 4.0 introduces algorithms which calculate the necessary information automatically, providing suggestions on process improvements on an ongoing basis.

What else is important to know?

If you are serious about Industry 4.0, it’s crucial to acknowledge the role of IT. Don’t consider it to be an on-the-side element of your company. You need to take it into account during every step you take.


Moreover, ensure that your employees receive proper training – not only to operate the new machines, but also to handle and process the new data. Make sure that they are data-savvy enough to understand the new basic principle: Certain data are inextricably linked to certain machines or products. To achieve this, it’s important to show them the benefits. This will motivate them to strive towards smarter factories, too.


In summary, you can take the following steps to get started with Industry 4.0: Ensure that all machines are IoT-enabled, put skilled data analysts and smart algorithms to work, make the outcomes available to everyone within your organization (and, possibly, to your chain partners) and determine the action you need to take for certain values and/or define KPIs that you can measure using the data.

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