Industry 4.0 refers to the fourth industrial revolution, in which digital technologies are integrated with manufacturing processes. Some of the key technologies of this current industrial era include artificial intelligence, automation, internet-of-things networks, big data and robotics — all of which allow for real-time decision making and smarter factory operations.
Industry 4.0 Definition
Industry 4.0 is a term for the fourth industrial revolution, an era characterized by the integration of intelligent digital technology and industrial manufacturing.
What Is Industry 4.0?
Industry 4.0 refers to the current industrial era, where advanced digital technologies have converged with physical machines. In this “fourth industrial” revolution, factories are intelligent and interconnected. Sensors pick up extensive amounts of data that’s instantaneously collected, stored in the cloud, shared across networks and analyzed. Self-monitoring machines are in constant communication with one another, updating information as it comes in and creating data-driven actionable insights — with little to no human intervention.
“Anything that we think of now as ‘smart’ that helps run factories more efficiently with systems that can talk to each other and exchange data and information [plays a role in Industry 4.0],” Andy Sherman, general manager at custom manufacturing company Fictiv, told Built In.
This transition doesn't just improve upon current methods, but changes the way companies create and distribute products entirely while allowing them to rapidly adapt to volatile market demands.
“Achieving greater productivity, efficiency and agility with machines that can learn from data and iterate live outputs on the factory floor is the focus of Industry 4.0,” Sherman said.
Industries Before 4.0
Industry 4.0 is the fourth and latest installment of historic industrial change. With each revolution, we reinvent how to make and distribute products as we move further away from an agrarian society to one centered on urban-oriented industry. And the term “revolution” is not to be taken lightly. Upon their debut, these inventions — steam, electricity and computers — were timely innovations that fundamentally changed how we worked as well as the production of goods for good.
First Industrial Revolution
The invention of the steam engine in the late-17th century shifted production methods from human and animal-powered manual labor to steam-driven machines. Originating in Britain, this transition gave rise to mass manufacturing, and marked the start of the first industrial revolution as it sprawled across Europe and the United States. As textiles, coal and iron production boomed, factories and cities proliferated among a burgeoning middle class.
Second Industrial Revolution
With the invention of the combustion engine about a century later, electricity sparked the second industrial revolution. Many groundbreaking inventions — the lightbulb, telephone, phonograph, radio, television, car and airplane — all came about during this period, nicknamed the Technological Revolution. Extensive railroad and telegraph networks allowed for faster transfer of people and ideas. The first glimpse of automation can be traced back to this time period, with the advent of the modern assembly line as we know it today.
Third Industrial Revolution
Computers gave way to the third industrial revolution, dubbed the Digital Revolution, of the mid-20th century. It’s characterized by a shift away from analog electronic and mechanical devices to digital tools, and eventually the widespread use of internet-based communications. Programmable logic controllers turned factories digital, excelling automation to a new level with machines, like robots and computerized enterprise systems, that know how to collect, share and analyze data.
Examples of Industry 4.0 Technology
What defines one industrial revolution from the next are the disruptive technologies and developments that come with it. Industry 4.0 is defined by connectivity, enabled by the following contemporaries.
Internet of Things (IoT)
IoT technology refers to a network of digitally interconnected physical devices, ranging from household appliances to industrial-grade machines, that communicate and exchange data through the Internet. It’s central to smart factories, where in-network machines use sensors, RFID tags and IP addresses to connect with other web-enabled devices in order to collect and share massive volumes of valuable data. Using specialized software, this information is updated and analyzed in real-time, driving operational efficiency, predictive maintenance and overall performance in manufacturing systems.
Cloud Computing
Cloud computing is the scalable infrastructure that supports the cyber-physical nature of Industry 4.0. These distributed systems offer a central platform where all of the data is unified and stored while seamlessly facilitating real-time coordination between supply chains, production and distribution channels. A staple of digital transformation, they also reduce startup costs and improve data accessibility for businesses of all sizes.
Artificial Intelligence and Machine Learning
Artificial intelligence (machine learning specifically) enables machines to problem solve, make decisions and learn from past performance rather than explicit programming. Simulating human-level intelligence is how massive volumes of data turn into actionable insights, smart automation and predictive analysis in Industry 4.0.
Edge Computing
Edge computing processes data locally, at the source where it is created. This minimizes latency associated with sending data to distant cloud servers and enables real-time decision making. It’s essential for scenarios like detecting safety or quality issues, where immediate action is needed, and enhances security by reducing the risks of transmitting sensitive information across widely distributed networks.
Cybersecurity
As manufacturing companies integrate smart devices, automation and big data, the risk of cyber threats increases by default. To secure their digital infrastructure, companies may turn to an assortment of cybersecurity measures that are designed to protect both IT and operational technology networks from malicious attacks. Using things like Zero Trust architecture and AI-powered threat detection, cybersecurity can prevent disruptions caused by malware or unauthorized access and ensure the reliability of production processes.
Digital Twins
Digital twins are virtual replicas of real-world objects or systems. They’re created by collecting live data from IoT sensors and are used in manufacturing to simulate and test certain processes, monitor equipment performance and improve workflows. Aside from boosting productivity and reducing downtime, they can also inspire innovative product designs.
Robotics
Industrial robots, often equipped with AI, perform complex tasks autonomously. Built with advanced software, sensors and computer vision, these robots, which range from inventory scanning drones to cobots and autonomous mobile units for pick-and-place operations, can handle complex and delicate operations by recognizing and responding to their environment — such as their human co-workers — as it happens around them.
Big Data
Big data processes the vast volumes of information generated by networked IoT devices and other connected devices. This practice uncover the valuable insights, patterns and trends that inform data-driven decisions. By leveraging live data from connected devices and sensors, companies are equipped with actionable insights pertaining to things like predictive maintenance, supply chain management, product development and risk assessment.
Additive Manufacturing
Additive manufacturing, commonly referred to as 3D printing, creates objects from digital models layer by layer. Using materials such as plastics, metals or ceramics, 3D printing is a game-changer for on-demand production by enabling rapid prototyping, customization and complex designs at a level that was previously impossible through traditional manufacturing methods. This technology allows manufacturers to quickly iterate new designs and produce as-needed parts in house.
Augmented Reality
Augmented reality overlays digital information onto real-world objects using specially designed glasses or smartphones. It’s designed to enhance a users’ perception and interaction with their environment. Just by glancing at an object or product, an employee would be able to visualize real-time IoT data, digitized parts, repair or assembly instructions or training content as it pops up through smart glasses lenses.
Benefits of Industry 4.0
Embedding intelligent tech into physical manufacturing machines comes with a number of advantages:
Increased Efficiency and Productivity
AI-driven automation and assorted smart technologies allow companies to produce more with the same or fewer resources. Manual and repetitive tasks are passed off to mindless machines, freeing up human capital for higher-value activities, like creative projects or high-stakes negotiations. For productivity gains, it’s a win-win.
More Visibility and Control
Real-time monitoring of manufacturing processes provides greater transparency across operations. This vantage point helps companies identify bottlenecks quickly and optimize performance for reduced downtime and a higher level of decision-making.
“Digital transformation can help industrial organizations consider the broader business picture of their markets and operations, while effectively clearing the hurdles between where they are now and where they want to be,” said Dustin Johnson, chief technology officer at industrial analytics software company Seeq Corporation.
Applications like AI and big data analytics enable companies to quickly adapt to evolving demands and volatile market conditions, offering a level of predictability that helps organizations to respond effectively and stay operational through less-than-ideal circumstances.
Better Products and Services
Industry 4.0 leverages advanced tech, like AI, IoT and big data analytics behind its drive to improve product quality, safety and customer experiences. Nearly all changes are sourced from data-driven decisions based on collected information that’s constantly updated and unified across the cloud in real-time. Because of this, companies are better equipped to deliver consistency and quality across automated production, featuring superior products with fewer defects, as well as responsive customer service.
Faster Time-to-Market
Reduced human error and analytics-driven operational efficiency create faster production cycles and fast-paced innovation, allowing companies to debut new products and services to market more rapidly. Designing a prototype with the help of a digital twin or augmented reality simulations, then 3D printing its many iterations, for example, dramatically cuts back the product development lifecycle from weeks or months to a matter of hours.
Cost Savings
Workflow automation and process management reduce operational costs through improving efficiency and reducing manual interventions. This leads to smarter resource allocation and lower production costs. Additionally, real-time data analytics and predictive maintenance help minimize downtime and prevent costly equipment failures, further cutting operational expenses.
Challenges Facing Industry 4.0
Despite its advantages, every revolution comes with its fair share of setbacks. Below are some of the obstacles hindering Industry 4.0.
High Initial Costs
Industry 4.0 requires substantial investment in IoT systems, software and specialized machinery. These upfront expenses can be particularly difficult for small and mid-sized businesses to afford, acting as a barrier that slows their adoption of smart manufacturing and digital transformation.
Integrating With Legacy Systems
Many manufacturers still rely on older equipment that lacks modern connectivity. Retrofitting or replacing these systems with ones that are compatible with smart technology can be complex and costly. Even if a company chooses to revamp its machines, workflow disturbances during the transition are highly likely, adding to the overall cost.
“We often work with customers who have a ‘robot graveyard’ of all the robots they no longer use,” said Kim Losey, CEO at robotics-as-a-service provider Rapid Robotics. “The reality is that implementing new systems takes a great deal of time and causes significant disruption to operations, whether we like to admit it or not.”
Workforce Skills Gap
The shift to Industry 4.0 demands a workforce skilled in fields like digital systems, automation and data analysis — all of which continue to evolve. Researchers have already identified a global shortage of qualified personnel, like engineers, data scientists and operators, with digital expertise up-to-par with today’s tech that hampers widespread adoption. In the United States, it’s estimated that manufacturing will have 2.1 million unfilled jobs by 2030, according to Deloitte.
Cybersecurity Risks
By simply logging onto the internet, industrial equipment and systems become exposed to cyberattacks. And with every IoT device comes multiple entry points for bad actors to exploit. Protecting against these threats is a critical challenge, since the isolating equipment of yesteryear is no longer viable, and requires advanced security measures that rely on constant updates.
Will There Be an Industry 5.0?
Yes; and it’s already happening. In fact, experts say that both Industry 4.0 and 5.0 are coevolving side-by-side. Industry 4.0 is all about interconnectivity between machines, and its successor focuses on how humans and machines collaborate.
While the two eras share much of the same tech (and timeline), the next phase puts people first. Industry 5.0 “brings humans back into the loop,” positioning technologies in a way that actually enhances human creativity, skills, decision-making and overall wellbeing, Sherman explained. It’s interested in redefining the relationship between humans and technology as one that can complement — not compete — with one another.
“A couple of the key ideas we’re seeing take shape are improving worker conditions and ensuring that technology supplements human jobs rather than replacing them,” Losey said.
Prioritizing the human experience within the production processes looks like cobots, or robots that work alongside humans in a way that augments the capabilities of their flesh-and-blood co-workers, and smart wearables.
“With the speed at which these technologies are evolving,” Losey added, “they’re poised to remain relevant for years to come.”
Frequently Asked Questions
What is the Industry 4.0 concept?
Industry 4.0 is all about digital transformation of the manufacturing sector as intelligent technologies are embedded into physical machines. It’s also known as the fourth industrial revolution.
When did Industry 4.0 start?
The term ‘Industry 4.0’ originated from a 2011 German government initiative that aimed to digitize manufacturing via interconnected machines, however it did not become a widespread concept until 2016, when it was adopted by the World Economic Forum.
Are we in Industry 4.0 or 5.0?
Both, actually. Industry 4.0 and 5.0 are coevolving alongside one another as they are shaped by the same technologies, but with different purposes. The former deals with the digitization and connectivity of manufacturing, while the latter takes a people-centric approach that explores how machines can complement the human condition.
