What is Industry 4.0 & How does it Work?

What is Industry 4.0?

Industry 4.0 is the next step in the evolution of manufacturing, based on the idea that machines should be able to communicate with each other and work together to create new products and services. Also known as the fourth industrial revolution, Industry 4.0 solutions are already changing the way we live and work forever—and making a huge impact on the world economy. Industry 4.0 is the application of technology to digitally transform how industrial companies operate. These technologies include the industrial IoT, automation and robotics, predictive maintenance, simulation, additive manufacturing, and IoT analytics. Industry 4.0 is driven by a need to boost efficiency, become more agile to respond to market unpredictability, improve quality, and to enable new business models.

The term was coined by Klaus Schwab, founder and executive chairman of the World Economic Forum. Our manufacturing solutions today have advanced far past where the industrial revolution got its start—and companies like yours are reaping the benefits of digital transformation initiatives today from this evolution.

How are industry 4.0 technologies changing manufacturing?

Industry 4.0 technologies are revolutionizing manufacturing by automating processes, connecting devices through IoT for real-time monitoring, and harnessing big data for analytics-driven decision-making. Additive manufacturing enables agile and customized production, while digital twins optimize processes virtually. Cybersecurity measures safeguard against threats, and human-machine collaboration enhances productivity. Together, these advancements streamline operations, improve efficiency, and foster innovation, reshaping manufacturing into smart, data-driven ecosystems.

Evolution of Industry 4.0

First Industrial Revolution

Marked by a transition from hand production and animal power to machines utilizing steam and water power, the First Industrial Revolution started in 1760. The first adoptees of this revolution were the textile manufacturing, iron, agriculture, and mining industries.

Second Industrial Revolution

The Technological Revolution started a century later in 1871, introducing the installation of extensive railroad and telegraph networks. These advancements allowed factories to develop the modern production line, bringing mass production and some degree of automation to the manufacturing process.

Third Industrial Revolution

By the late 20th century, the Digital Revolution started. After the end of the second world war, computers, advanced telecommunications, and data analysis were developed. In the factory, digitization began by embedding programmable logic controllers (PLCs) into equipment to automate processes and begin data collection.

Fourth Industrial Revolution

In 2011 the German government used the term “Industrie 4.0” to describe a manufacturing digitization project. It quickly evolved to become a set of recommendations for implementing technology, jumpstarting digital transformation at scale.

Scale Industry 4.0

Benefits of Industry 4.0

Increased productivity and efficiency

Industry 4.0 boosts productivity and efficiency through automation, streamlining processes, and reducing manual labor. Data analytics optimize resource allocation and production schedules, while predictive maintenance minimizes downtime. Supply chain integration enhances coordination, and customizable manufacturing adapts to changing demands swiftly, maximizing output with minimal waste.

Higher quality and output

Industry 4.0 enhances quality and output through automation, minimizing errors and improving consistency. Data analytics optimize processes, identifying areas for improvement and reducing defects. IoT sensors enable real-time monitoring, ensuring product quality, while flexible manufacturing allows for customization, meeting diverse customer demands efficiently.

Improved safety

Industry 4.0 enhances safety through predictive maintenance, remote monitoring, and reducing human exposure to hazardous environments. Augmented reality and IoT aids in training, data analytics identify risks, and supply chain visibility ensures safety standards throughout processes, fostering safer workplaces.

Improved collaboration

Industry 4.0 fosters collaboration through digital platforms, enabling seamless communication across supply chains. IoT facilitates real-time data sharing, optimizing coordination between stakeholders. Virtual collaboration tools enhance remote teamwork, while AI-driven analytics provide insights for informed decision-making, promoting agile and efficient collaboration in dynamic environments.

Operational cost reductions

Industry 4.0 technologies reduce operational costs from labor, field service, materials, and compliance, and overhead and power profitable service and manufacturing organizations.

Smart manufacturing use cases

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Plant benchmarking

Improve data collection and analysis across plants, equipment, lines, and more. Get a clearer picture of performance and make more meaningful improvements.

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Increase workforce productivity

Adopt technology to empower your most valuable asset: the frontline employees on your factory floor. Supercharge your digital workforce for massive efficiency gains.

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Improve OEE

Digital manufacturing can discover previously unmeasured KPIs to find—and solve—hidden inefficiencies. Minimize avoidable CAPEX, prevent downtime, and accelerate changeover.

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Extend digital thread into the factory

Begin manufacturing in parallel with engineering and remain updated with access and visibility to the latest design changes. Accelerate production and reduce non-quality costs via a seamless digital thread.

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What technologies are driving Industry 4.0?

Industrial IoT

Empower your teams with real-time insights and visibility into people, product, equipment, and performance data with Industrial IoT. See how industrial connectivity can transform your factory operations and help deliver double-digit impact.

AI and machine learning

Detect failure signals, make critical service decisions, and prevent unplanned downtime with industrial artificial intelligence. Read how AI and machine learning can help build better predictive models.

Digital twin

Digital twins are emerging as the best way for enterprises to transform the way they make sense of data and compound value from digital transformation initiatives. Learn why this is a strategic imperative for digital transformation.

Computer-aided design

Improve how your engineering team designs for manufacturability to help reduce operational costs of production. Design, develop, and document innovative products with parametric modeling, generative design, and simulation and analysis tools.

Augmented reality

Explore how industrial augmented reality solutions can help you improve workforce efficiency and safety. Enhance your training, onboarding, and upskilling programs with augmented work instructions, expert knowledge capture and transfer, and more.

Product lifecycle management

Ensure teams have up-to-date product data that's delivered securely, in context, and managed with data governance and traceability processes. With better product data, teams can reduce time to market, increase productivity, and reduce costs.

Cloud computing

Hybrid cloud is a core element that helps create efficiencies and drive competitive differentiation. Embracing this computing approach helps drive computer power while improving security and resiliency.

Edge computing

Edge computing has the advantages of minimizing transmission costs and response times.

Cybersecurity

Cybersecurity is bolstered with robust encryption, AI-driven threat detection, and proactive measures to safeguard networked systems and sensitive data.

Additive manufacturing

Enhance additive manufacturing through AI-driven design optimization, real-time monitoring, and supply chain integration, expediting production and fostering innovation in materials and processes.

Manufacturing 4.0 solutions

Predictive Maintenance

Manufacturing 4.0 utilizes predictive maintenance to anticipate equipment failures before they occur. By integrating IoT sensors, AI algorithms, and data analytics, it monitors machinery in real time, detecting anomalies and predicting maintenance needs. This proactive approach minimizes downtime, reduces maintenance costs, and optimizes equipment performance, ultimately enhancing productivity and prolonging asset lifespan.

Collaborative Product Design

Manufacturing 4.0 enhances collaborative product design with real-time cloud-based collaboration, VR/AR simulations, and AI-driven design optimization, ensuring efficient teamwork, innovation, and high-quality product development.

Agile Manufacturing

Manufacturing 4.0 drives agile manufacturing with IoT monitoring, real-time analytics, and flexible production processes, ensuring quick responses to market changes and optimized resource utilization.

Supply Chain Optimization

Manufacturing 4.0 optimizes the supply chain through real-time data sharing, IoT-enabled tracking, and AI-driven analytics. It enhances visibility, streamlines logistics, and improves inventory management, reducing lead times and costs.

Industry 4.0 solutions at PTC

Digital performance management

ThingWorx Digital Performance Management helps identify, prioritize, act on, and monitor problem-solving opportunities for the greatest potential P&L impact.

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Connected work cell

ThingWorx Connected Work Cell streamlines how information is delivered to frontline workers by aggregating critical data from multiple data silos into a simplified visual application.

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Asset monitoring and utilization

ThingWorx Asset monitoring and utilization help manufacturers connect to existing assets, remotely monitor them in real time, generate alerts based on abnormal conditions, and deliver critical insights with data trending and analysis tools.

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Future of Industry 4.0

The future of Industry 4.0 promises deeper integration of digital technologies like AI, IoT, and robotics, revolutionizing manufacturing with intelligent, autonomous systems. Advancements in data analytics will drive predictive maintenance and resource optimization, while collaborative robots and virtual reality enhance workforce capabilities. Supply chains will become more agile and transparent through blockchain and IoT. Industry 4.0 will continue to redefine production processes, fostering innovation, sustainability, and competitiveness in the global marketplace.

Welcome to the Lean Manufacturer Podcast Series!

During the discussions, our expert guests share their unique perspectives on the Industrial Internet of Things (IIoT) and delve into critical aspects of manufacturing. Throughout the series, we explore how the IIoT can revolutionize manufacturing efficiency and deliver substantial value to your organization.

Listen to episodes on Apple Podcasts, Spotify, or explore more here. You won’t want to miss this enlightening journey!

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FAQ

What industries are being transformed by Industry 4.0?

In industrial settings, Industry 4.0 is transforming manufacturing, automotive, aerospace, chemicals, oil and gas, mining, power generation, heavy machinery, construction, and logistics and supply chain industries through automation, IoT, AI, and data analytics for optimized processes, predictive maintenance, and enhanced safety and sustainability.

What are the characteristics of a smart factory?

A smart factory is characterized by automation, connectivity, and data-driven decision-making. It employs IoT devices, robotics, AI, and data analytics to optimize production processes, enhance efficiency, reduce downtime, ensure quality, and enable real-time monitoring and control of operations for agile and responsive manufacturing.

IT/OT Integration

Integrating information technology (IT) with operational technology (OT) streamlines data flow, improves decision-making, enhances efficiency, and enables predictive maintenance in industrial settings. It facilitates real-time monitoring, optimization of processes, and better resource allocation, leading to reduced downtime, increased productivity, and improved overall performance.

Custom Manufacturing

Industry 4.0-enabled custom manufacturing combines flexibility with efficiency. It leverages digital technologies like AI, IoT, and data analytics to optimize processes, reducing lead times and costs while meeting individual customer demands. Real-time data insights enable agile adjustments, ensuring quality and innovation, enhancing customer satisfaction, and maintaining competitiveness in dynamic markets.

Supply Chain

Industry 4.0 transforms supply chains by enhancing visibility, agility, and efficiency. IoT sensors and AI analytics enable real-time tracking and predictive maintenance, reducing downtime and inventory costs. Blockchain ensures transparent and secure transactions, while data-driven insights optimize logistics, inventory management, and demand forecasting, enabling faster responses to market changes and improving overall performance and customer satisfaction.

Top three transformative powers of Industry 4.0

Industry experts from PTC, McKinsey, and Rockwell Automation discuss the Industry 4.0 concepts enabling manufacturers to overcome new challenges.

E-book

Industry experts from PTC, McKinsey, and Rockwell Automation discuss the Industry 4.0 concepts enabling manufacturers to overcome new challenges.

Understanding the Industry 4.0 maturity index

Read Acatech’s in-depth research to learn how you can build your own Industry 4.0 plan for digital transformation.

Report

Read Acatech’s in-depth research to learn how you can build your own Industry 4.0 plan for digital transformation.

Charting the course of digital transformation

Overcome the challenges of digital transformation with insights on how to align financial outcomes, scale use cases, and manage change effectively.

Infographic

Overcome the challenges of digital transformation with insights on how to align financial outcomes, scale use cases, and manage change effectively.

What is Industry 4.0 & How Does it Work?