What is Industry 4.0?

You may be hearing a lot of buzz about Industry 4.0 and wondering what all the noise is about. The concept arose from a project commissioned by the German government in 2011 through 2013. The term, which is sometimes written Industrie 4.0, refers to the fourth wave of the Industrial Revolution.

Defining Industry 4.0

Industry 4.0 is a catchall term used to describe the confluence of several technologies that are causing major transformations in the manufacturing industry. Technologies leading to digital transformation include industrial automation and robotics; big data analytics; additive manufacturing; cloud computing; artificial intelligence; MES solutions; Nano technology; machine learning and digital twinning.

The Four Waves of The Industrial Revolution

Each iteration of the Industrial Revolution used technology to improve the efficiency and viability of manufacturing. And each wave represented a “break” in the manufacturing paradigm.

  • The first wave of the Industrial Revolution was the movement from a largely agrarian economy to a more industrialized society. This change was driven by the widespread adoption of the steam engine which was used to power machinery and equipment in factories.
  • The second wave was driven by the common availability of electricity, which helped to propel the move to mass production in factories by increasing productivity and efficiency and reducing costs and complexity.
  • The third wave was driven by the adoption of computerized systems such as ERP and new IT technologies that made large-scale production more manageable.
  • The fourth wave, Industry 4.0, continues the digital transformation begun in the third wave, but its technologies are so disruptive and growing so quickly that it represents a near complete recasting of manufacturing models. It differs from the third wave because of the speed of transformation, the scope and variety of transformational technologies maturing simultaneously, and the rapid changes in systems, procedures, and even products.

The Impact of Industry 4.0

Industry 4.0 is having an impact on almost every industry in every corner of the world. Powerful technology is everywhere, from the phones in our pockets to the appliances in our homes to the equipment that produces goods and services in our factories.


Connected devices that communicate about their status or service and maintenance requirements are everywhere. The Internet of Things now consists of many billions of connected devices, and every estimate of the future number of devices is quickly outpaced by reality.

Understanding the Internet of Things for manufacturing whitepaper.

Cloud Computing

The cloud has enabled companies to adopt technology faster than they would have if they had to acquire and install new hardware and technology in-house. Not only are business systems such as ERP available in the cloud, but Industry 4.0 infrastructure technologies such as IoT as a service and 3D printer farms for production are readily available.

Learn more about factory floor solutions in the cloud.

Additive Manufacturing

Additive manufacturing, the technical name for 3D printing, has reached the point where it is often competitive with traditional manufacturing for production quantities. New materials, including metals, biological materials, and food, have allowed the variety of products that can be 3D printed to burgeon, and printers have increased in size to the point where they can effectively print modular housing.

MRO and service part management have benefited from 3D printing, with many companies reducing or eliminating the traditional service parts inventory in favor of print-on-demand spares. In some cases, the machinery can notify the 3D printer automatically to begin production of the required part, reducing downtime. In addition, companies save money on inventory storage and simplify record keeping.

Industrial Automation and Robotics

Machinery and equipment now report production automatically to connected MES solutions, replenish materials as required, and notify production supervisors or maintenance teams when the process approaches predefined quality parameter thresholds.

Robots create parts with an unprecedented degree of consistency, and they can perform operations safely in hazardous environments or conditions that are impossible for human workers.

As a result, scrap and rework—and the associated costs—are reduced dramatically, making products produced in digital factories more affordable and of higher quality than traditionally manufactured goods.

OEE (Overall Equipment Effectiveness) is another new and exciting way to measure your industrial automation performance.

Learn more about the Myths and Mistakes surrounding OEE projects.

Artificial Intelligence and Machine Learning

Rote processes can be effectively managed by artificial intelligence, which processes routine transactions and kicks out exceptions for human interaction. The AI learns from human interaction, so the next time an exception occurs, it can process the transaction on its own. Human workers can focus on strategic aspects of the business, including new product ideas and improved customer services.

Big Data Analytics

While big data is not receiving as much attention as it did a few years ago, that is only because it has become so fundamental to the digital transformation of Industry 4.0. Connected equipment processes thousands—even millions—of transactions and data points during a single shift.

Traditional ERP data collection is not equipped to capture or manage that volume of data, nor does the underlying data model have the finite gradients necessary for scheduling equipment down to the hour or minute. Companies are using purpose-built applications such as APS and MES to plan production and capture activity in Industry 4.0 factories.

The sheer volume of this data would overwhelm traditional business system report writers and analytics, but a big data engine thrives on a high volume, fast-paced flow of data to generate the insight necessary to take fast action in an Industry 4.0 world.


An MES provides a user-friendly bridge between the complex technologies driving Industry 4.0 and the humans who must rely on the systems for insight.

An MES has an intuitive interface that allows factory floor personnel to easily interact with the system to provide real-time feedback, using touch pads, alerts, and real-time dashboards to keep the factory running at peak performance.

An MES delivers on the paperless ideal, and MES provides data for the calculation of important metrics such as OEE. Including a data historian and a SCADA system will increase the efficacy of MES in Industry 4.0 initiatives.

PWC research indicates that 33 percent of companies say they have already achieved an advanced level of automation qualifying as Industry 4.0. Fully 73 percent expect to achieve this ideal by 2020. It makes sense to start working toward digital transformation immediately, with a company and technologies that are ready to support the journey.

How are you doing with your factory floor performance? Schedule a call with Factivity to learn more.

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