What is Industry 4.0? – Basics explained

Industry 4.0 is on everyone's lips, we explain why it is an important topic for every company

The next industrial revolution is also called Industry 4.0. It is often mentioned in articles and news and discussed in many companies. What it actually means and which areas it covers, we explain to you here in this article.

First came steam. With steam came the first mechanical machines that could do the work of many people. Then came electricity along with assembly line production that led to mass production. The 3rd Industrial Revolution was all about computers and the first robots that replaced humans at work and automated production lines. Now we come to the so-called Industry 4.0.

The 4th Industrial Revolution is all about computers, machines, robots and specifically the way they work together. Self-learning algorithms, machine learning, artificial intelligence (AI) and how production largely regulates itself on its own or with little input from humans.

You could also think of Industry 4.0 as the development of “smart factories,” or intelligent factories that can act and produce on their own. Here, computer systems take over the monitoring and control of production as well as the associated processes. Through Internet of Things (IoT), sensors and control devices are integrated to make this interface work.

5 factors for successful Industry 4.0

  • Decentralized decision making
    Physical and virtual systems that partly make their own simple or more complex decisions and function as autonomously as possible.
  • Big Data
    In order to be able to make these decisions, data will be crucial. Big Data is only a collective term for the mass collection of data in order to evaluate it for decisions.
  • Interoperability
    The connection of machines, people, computers and sensors to exchange information and data with each other as well as the common communication.
  • Technical support
    On the one hand it is about the support of humans to solve problems or to give decision support. On the other hand, it is about assisting in performing tasks that are too dangerous or impossible for humans.
  • Information transparency
    Data from sensors and virtual images of our world, should enable a deeper understanding and help us to better understand the world with information.

According to experts, other technologies such as 3D printing, blockchain and many others will play a role in making machines produce more efficiently or manage data securely.

Dangers and fears from Industry 4.0

All these changes also bring problems in certain areas. Lack of resources, little understanding and the fear of losing one’s job are just some of the problems that we are highlighting here:

  • Data security is one of the biggest problems. The more data that is collected and virtually mapped, the greater the impact of data loss or theft. Data security becomes particularly critical when it comes to critical company secrets or special production processes, and then it is of course more critical if these can be accessed by means of a virtual image.
  • The loss of jobs is of course also often mentioned. This is not only about but also about highly paid jobs.
  • The reduced insight into the processes and the feeling of losing control can be a possible barrier.
  • Building and maintaining a reliable and also stable system can be difficult.
    Fear of production losses due to technical problems lead to additional resistance
  • High investment costs and redistribution of stakeholders
  • No experience and also a lack of qualified personnel

Despite all the problems and obstacles that Industry 4.0 faces, the benefits will clearly overcome the concerns and hurdles. Especially in very dangerous work environments where the health and safety of the workers is at risk, these systems will quickly find favor. Through better functioning supply chains, reliable productivity and above all great cost savings, many industries and companies will follow this path. Especially because of these great advantages, companies can even gain market leadership if they can be the first to exploit the potential.

More government initiatives on Industry 4.0

Various regions and governments have already launched major initiatives there. In particular, fast-growing countries like India and China are already making great strides in integrating new technologies, and the potential there is even greater. In the USA, the city of Cincinatti has announced that it wants to establish itself as an “Industry 4.0 demonstration city”. In the same way, the German government has been initiating the Industry 4.0 platform for some time and in Switzerland the Industrie2025 platform has already been established.

In general, most managers already know that the question of “Will Industry 4.0 come?” is no longer . Many sectors and industries should focus specifically on the question “When and how do we implement it?

CEO & Founder of MoreThanDigital. Serial entrepreneur since he successfully founded his first companies at the age of 13. He has always questioned the "status quo" and is committed to innovation, disruption and new ideas. As International keynote speaker, consultant for companies and governments & states, lecturer and published digital transformation expert, Benjamin tries to advance the topics of digitalization, digital transformation and innovation internationally.

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