Industrie 4.0: The Fourth Industrial Revolution

The design principles of Industry 4.0 such as interoperability, virtualization, decentralization, real-time capabilities, a service-oriented approach, and modularity all play a key role in the radically changing architectures of the various industrial solutions as we know them. We see businesses struggling to pivot at a time when being agile and fleet of foot is not just for the multi nationals but for all organisations that need to connect to and stay relevant with a mobile customer base. Getting to grips with digital business transformation is now an imperative, not a luxury and time is running out.

What is Industrie 4.0?

The definition of Industrie 4.0 as proposed in 2011 was lengthy. In a paper, entitled “Industrie 4.0 – Smart Manufacturing for the Future”, GTAI (Germany Trade and Invest) looked at the questions what smart industry is (a synonym of Industry 4.0) and what Industrie 4.0 means.
An extract: Smart industry or “INDUSTRIE 4.0” refers to the technological evolution from embedded systems to cyber-physical systems…INDUSTRIE 4.0 represents the coming fourth industrial revolution on the way to an Internet of Things, Data and Services. Decentralized intelligence helps create intelligent object networking and independent process management, with the interaction of the real and virtual worlds representing a crucial new aspect of the manufacturing and production process”.

If we take the above-mentioned German Plattform Industrie 4.0 as the official reference for all things Industry 4.0, an official definition, per the platform, goes as follows: “Industrie 4.0 refers to the intelligent networking of machines and processes for industry with the help of information and communication technology”.

Industry 4.0 is the digital transformation of manufacturing/production and related industries and value creation processes.

Industry 4.0 is used interchangeably with the fourth industrial revolution and represents a new stage in the organization and control of the industrial value chain.

Cyber-physical systems form the basis of Industry 4.0 (e.g., ‘smart machines’). They use modern control systems, have embedded software systems, and dispose of an Internet address to connect and be addressed via IoT (the Internet of Things). This way, products and means of production get networked and can ‘communicate’, enabling new ways of production, value creation, and real-time optimization. Cyber-physical systems create the capabilities needed for smart factories. These are the same capabilities we know from the Industrial Internet of Things like remote monitoring or track and trace, to mention two.

Industry 4.0 is often used interchangeably with the notion of the fourth industrial revolution. It is characterized by, among others, 1) even more automation than in the third industrial revolution, 2) the bridging of the physical and digital world through cyber-physical systems, enabled by Industrial IoT, 3) a shift from a central industrial control system to one where smart products define the production steps, 4) closed-loop data models and control systems and 4) personalization/customization of products. The goal is to enable autonomous decision-making processes, monitor assets and processes in real-time, and enable equally real-time connected value creation networks through early involvement of stakeholders, and vertical and horizontal integration.

Industry 4.0 design principles

Industry 4.0 is often defined in six so-called design principles, essentially serving as part of the Industry 4.0 vision and to make the guidelines clearer for companies who want to understand, identify and implement Industry 4.0 projects.

These Industry 4.0 design principles are 1) Interoperability (now and then also referred to as interconnection or simply connectivity), 2) information transparency (also virtualization or virtual entities), 3) decentralization (also decentralized/autonomous decisions or autonomy), 4) real-time capability, 5) technical assistance and service orientation (with Human-Machine Interaction) and 6) modularity.

In essence, the technologies making Industry 4.0 possible leverage existing data and ample additional data sources, including data from connected assets to gain efficiencies on multiple levels, transform existing manufacturing processes, create end-to-end information streams across the value chain and realize new services and business models.

Enabling more direct models of personalized production, servicing, as well as customer/consumer interaction (including gaining real-time data from actual product usage) and cutting the inefficiencies, irrelevance and costs of intermediaries in a digital supply chain model, where possible, are some goals of Industry 4.0 in this customer-centric sense of increasingly demanding customers who value speed, (cost) efficiencies and value-added innovative services.

In the end, it remains business – with the innovative twist of innovation and transformation of business models and processes: increase profit, decrease costs, enhance customer experience, optimize customer lifetime value and where possible customer loyalty, sell more, and innovate to grow and remain relevant.

A key role is indeed played by the Internet of Things or IoT, in the scope of Industry 4.0 Industrial IoT with its many IoT stack components, from IoT platforms to Industrial IoT gateways, devices and much more.

Yet, it’s not just IoT of course: cloud computing (and cloud platforms), big data (advanced data analytics, data lakes, edge intelligence) with (related) artificial intelligence, data analysis, storage and compute power at the edge of networks (edge computing), mobile, data communication/network technologies, changes on the level of, among others, HMI and SCADA, manufacturing execution systems, enterprise resource planning (ERP, becoming i-ERP), programmable logic controllers (PLC), sensors and actuators, MEMS and transducers (sensors again) and innovative data exchange models all play a key role.

Additionally, the same technologies, such as Robotic Process Automation (RPA), AI (AI engines, machine learning), the meeting of both and so forth that pop up in close to all software areas such as enterprise information management, business process management and applications in the sourcing market are of course showing in IoT-enabled industrial/manufacturing applications and IoT manufacturing platforms as well.

On the technological front it’s important to look at the technologies underneath terms such as IoT but also to look at how it all connects, especially as on this technology level (where data and how you leverage, protect, exchange, enrich and even monetize it is at the centre as you can see in the above list) the keyword is integration as well: from the integration of IT and OT to the integration of IoT and AI; big data, IoT and AI; blockchain and IoT.

The blurring of borders on the level of hierarchies and solutions

Just as the borders between the various technologies and the various levels of our traditional automation pyramid are blurring, so are the data, communication, and system silos.

With the move to the cloud, the increasing importance of IoT and the need to connect systems with the proper newer technologies which we see in Industry 4.0 and in the third platform and its innovation accelerators, the solutions landscape is changing in the ongoing integration of IT and OT. It comes with many challenges, on the level of value creation, connected data and security, to name a few.

In the end, it could be just about staying competitive

There is an increasing number of organizations and countries where Industry 4.0 is becoming adopted. Examples include the UK (Industry 4.0 and the work around 4IR, short for 4th industrial revolution by the EEF), Japan (where there is, as mentioned already a collaboration with Japan’s Robot Revolution Initiative), China (where the Industry 4.0 outline is at the basis of ‘Made in China 2025’) and the numerous EU initiatives.  Essentially all of them are leveraging the Industry 4.0 concept, regardless of their many different names.

The key takeaway is that in Britain the impact of post Brexit business disruption is becoming clear: industry is not ready to go paperless with ‘intelligent borders’ and that will negatively impact the ability to maintain existing commerce between the Continent and the UK. With other disruptions that are now beginning to create headwinds for most economies, the transition to Industrie 4.0 must accelerate. There will be bumps as business leaders get a grip on how existing business models need to be disrupted to be sustainable and at Codacity we stand ready to assist from use case formation to execution. If you do not disrupt, then prepare to be disrupted.

Codacity are experts in disruptive technologies and particularly IoT use cases. It’s not just about intelligent fridge-freezers.  Codacity Informatica Group have the experience you need to guide you through the process of identifying your next digital business disruption. In the age of ongoing business disruption and adapting to a dynamic market environment, addressing the silos in your organisation and understanding how to reorganise your business for sustainable growth is necessary.