What is Industry 4.0?

Everyone is talking about Industry 4.0. But what exactly does that term mean? And what came before it?

Industry 4.0 refers to the fourth industrial revolution. After mechanisation (Industry 1.0), mass production (Industry 2.0) and automation (Industry 3.0), now the “internet of things and services” is becoming an integral part of manufacturing. Industry 4.0 technologies have the potential to create extraordinary growth opportunities and competitive advantages for Germany as a business location. Experts forecast that businesses will be able to increase their productivity by about 30 percent using Industry 4.0

Social machines

Intelligent machines share information with one another much like people do in online social networks. They can organise themselves on their own and work together to coordinate processes and deadlines. This makes production more flexible and efficient. In addition, these machines communicate directly with all of the IT systems in the company. This enables an uninterrupted flow of information to areas such as sales or development.

Global facilities

The production arena is not the only place where machines share data with one another. A company’s machines are also connected to supplier and customer systems. This enables them to react independently to any changes that occur. If a supplier cannot deliver, the technology analyses capacity utilisation and costs at alternative suppliers in real time and automatically places an order with them.

In smart factories people still play a critical role in the production process. As augmented operators, they control and monitor production sequences in the production network. IT-based assistance systems such as data glasses can virtually extend an augmented operator’s view of a real factory (through augmented reality). Such assistance systems can also be adjusted to the individual abilities and needs of staff members, and they offer the potential to extend the time that older people stay in the workforce.

Smart products

Every smart product holds data about operating conditions and product statuses. This data is stored on things like tiny RFID chips, and it provides a virtual copy of each smart product. Such information is collected, updated and evaluated throughout the life of the product as needed, from the first stage of production to actual customer use and all the way to recycling. Before production even begins, a product knows its purchaser and order information, its current status and the production stages needed to turn it into a finished product. It can do things like tell machines what shape it needs to have or whether it is supposed to be painted red or blue. Customers can be part of the process and get much more personalised products, while production costs stay the same or even drop.  

Virtual production

In addition to the real production arena, smart factories will have a digital twin with all of the same products and resources. This digital copy allows for virtual simulations of all production processes. These display alternative production sequences and potential for optimising production lines. The system also allows engineers to remotely control and monitor production in real time. Although we already have virtual copies of real factories today, they are not yet linked in real time – that is, changes to the virtual copy do not lead directly to changes in the real factory and vice versa.

Smart services

Industry 4.0 is not limited to factories. After all, intelligent products do more than actively control their own production process; once being delivered to a customer, they serve as a platform for new business models. In the future, there will be billions of intelligent products that are connected to the internet throughout their useful life, and they will save huge quantities of data (big data) about their own operating conditions and product statuses in the cloud. All that data they have collected can be used to optimise products. What’s more, smart algorithms can link existing data to new information (smart data). They provide a foundation for offering customers personalised, data-based services (smart services) in addition to the physical product. For instance, operators of diagnostic devices can collect and analyse data about all of the devices being operated in the area they are responsible for and use it to generate new services, such as possible diagnoses. Compared to today’s business models, the underlying foundation of data will be exponentially better.

Industry 4.0: when the product controls production (source: ZVEI)