UNIT 1 - MEANING AND NATURE
OF INDUSTRY 4.0
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FIRST INDUSTRIAL REVOLUTION (INDUSTRY 1.0) - LATE
18TH CENTURY (~1760–1840)
Key Innovation: Mechanization, Steam Power, Water Power
• The First Industrial Revolution began in Great Britain in the late 18th
century.
• Introduction of steam engines and mechanized production in industries
like textiles and iron manufacturing.
• Shift from handmade goods to machine-based production using water
and steam power.
• Major inventions: Steam engine (James Watt), Spinning Jenny, Power
Loom.
• Impact: Increased efficiency, mass production, urbanization, and the rise of
factory systems.
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SECOND INDUSTRIAL REVOLUTION (INDUSTRY 2.0) -
LATE 19TH CENTURY (~1870–1914)
Key Innovation: Mass Production, Electricity, Assembly Lines
• Driven by the widespread use of electricity, steel, and petroleum.
• Introduction of the assembly line (pioneered by Henry Ford in automobile
manufacturing).
• Development of railways, telegraphs, and internal combustion engines.
• Increased productivity, transportation, and communication.
• Industries like steel, chemicals, and automobiles flourished.
• Rise of large corporations and globalization of businesses.
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THIRD INDUSTRIAL REVOLUTION (INDUSTRY 3.0) - LATE
20TH CENTURY (~1950–2000)
Key Innovation: Automation, Computers, Electronics
• Introduction of computers, automation, and robotics into manufacturing.
• Rise of programmable logic controllers (PLCs) and the first automated
production lines.
• Growth of the internet and digital communication.
• Shift from mechanical systems to electronic and IT-driven production.
• Enabled customization, lean manufacturing, and efficiency
improvements.
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FOURTH INDUSTRIAL REVOLUTION (INDUSTRY 4.0) -
PRESENT & FUTURE (~2000–ONGOING)
Key Innovation: Smart Manufacturing, AI, IoT, Big Data
• Cyber-physical systems, Artificial Intelligence (AI), Internet of Things
(IoT), and Cloud Computing drive modern manufacturing.
• Smart factories with real-time data monitoring, automation, and machine
learning.
• 3D printing, blockchain, robotics, and augmented reality revolutionize
supply chains.
• Personalized and on-demand production with predictive analytics.
• Increased interconnectivity and data-driven decision-making.
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Industry 4.0, which refers to the fourth industrial revolution, is the cyber-
physical transformation of manufacturing.
The name is inspired by Germany’s Industries 4.0, a government initiative to
promote connected manufacturing and a digital convergence between industry,
businesses and other processes.
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Industry 4.0 is powered by the Industrial Internet of Things (IIoT) and cyber-
physical systems – smart, autonomous systems that use computer-based algorithms
to monitor and control physical things like machinery, robots, and vehicles.
Industry 4.0 is revolutionizing the way companies manufacture, improve and distribute
their products.
Manufacturers are integrating new technologies, including Internet of Things (IoT),
cloud computing and analytics, and AI and machine learning into their production
facilities and throughout their operations.
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INDUSTRY 4.0
We are living at the beginning of a new technological revolution around Industry 4.0
technologies such as artificial intelligence (AI), robotics, and the Internet of
Things (IoT).
Industry 4.0 refers to the “smart” and connected production systems
designed to sense, predict, and interact with the physical world, so as to
make decisions that support production in real-time.
Developing countries need to diversify their production towards more
technologically advanced sectors.
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WHAT IS INDUSTRY 4.0?
Industry 4.0 refers to the “smart” and connected production systems that are designed
to sense, predict, and interact with the physical world, so as to make decisions that
support production in real-time.
In manufacturing, it can increase productivity, energy efficiency, and sustainability. It
increases productivity by reducing downtime and maintenance costs.
For example, in a case study of a multinational in the plastics sector, Industry 4.0, using
energy sensors reduced the power consumption in one of its plants by around 40%,
which saved over $200,000 a year in energy. However, only a few countries develop and
trade Industry 4.0 technologies.
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FROM STEAM TO SENSOR: HISTORICAL
CONTEXT FOR INDUSTRY 4.0
First Industrial Revolution- Starting in the late 18th century in Britain, the first
industrial revolution helped enable mass production by using water and steam power
instead of purely human and animal power. Finished goods were built with machines
rather than painstakingly produced by hand.
Second Industrial Revolution- A century later, the second industrial revolution
introduced assembly lines and the use of oil, gas and electric power. These new
power sources, along with more advanced communications via telephone and
telegraph, brought mass production and some degree of automation to
manufacturing processes.
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Third Industrial Revolution- The third industrial revolution, which began in the
middle of the 20th century, added computers, advanced telecommunications and data
analysis to manufacturing processes. The digitization of factories began by embedding
programmable logic controllers (PLCs) into machinery to help automate some
processes and collect and share data.
Fourth Industrial Revolution- We are now in the fourth industrial revolution, also
referred to as Industry 4.0. Characterized by increasing automation and the
employment of smart machines and smart factories, informed data helps to produce
goods more efficiently and productively across the value chain. Flexibility is improved
so that manufacturers can better meet customer demands using mass customization—
ultimately seeking to achieve efficiency with, in many cases, a lot size of one. By
collecting more data from the factory floor and combining that with other enterprise
operational data, a smart factory can achieve information transparency and better
decisions.
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INDUSTRY 4.0 AND IOT
One of the major technological trends of the last decade has been the adoption of IoT
technologies. IoT essentially refers to the ability to connect non-traditional computing
devices to the internet or to private networks.
Although the term is often used broadly, IoT often refers to smart, connected, consumer
devices.
However, manufacturers have also adopted the concept and have begun deploying large
numbers of connected smart sensors in manufacturing centers. The use of such sensors
is often referred to as Industrial IoT (IIoT).
IIoT is a key enabler of Industry 4.0, but Industry 4.0 also commonly uses other
connected technologies such as smart machines and cyber-physical systems. All of these
systems work together to achieve levels of automation that weren’t previously possible.
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APPLICATIONS OF INDUSTRY 4.0
Examples of Industry 4.0 related technologies that are becoming more prominent on
factory floors include:
1. The Internet of Things
2. The Industrial Internet of Things (IIoT)
3. Smart Manufacturing
4. Connected Manufacturing
5. Smart Factories
6. Cloud Computing
7. Cognitive Computing
8. Artificial Intelligence
9. Cyber-physical Systems
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INDUSTRY 4.0 TECHNOLOGIES
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Big Data and AI analytics: In Industry 4.0, Big Data is collected from a wide range of
sources, from factory equipment and Internet of Things (IoT) devices, to ERP
and CRM systems, to weather and traffic apps. Analytics powered by artificial
intelligence (AI) and machine learning are applied to the data in real time – and insights
are leveraged to improve decision-making and automation in every area of supply chain
management: supply chain planning, logistics management, manufacturing, R&D and
engineering, enterprise asset management (EAM), and procurement.
Horizontal and vertical integration: The backbone of Industry 4.0 is horizontal
and vertical integration. With horizontal integration, processes are tightly integrated at
the “field level” – on the production floor, across multiple production facilities, and
across the entire supply chain. With vertical integration, all the layers of an organisation
are tied together – and data flows freely from the shop floor to the top floor and back
down again. In other words, production is tightly integrated with business processes like
R&D, quality assurance, sales and marketing, and other departments – and data and
knowledge silos are a thing of the past.
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Cloud computing: Cloud computing is the “great enabler” of Industry 4.0 and digital
transformation. Today’s cloud technology goes way beyond speed, scalability, storage, and
cost efficiencies. It provides the foundation for most advanced technologies – from AI
and machine learning to the Internet of Things – and gives businesses the means to
innovate. The data that fuels Industry 4.0 technologies resides in the cloud, and the
cyber-physical systems at the core of Industry 4.0 use the cloud to communicate and
coordinate.
Augmented reality (AR): Augmented reality, which overlays digital content on a real
environment, is a core concept of Industry 4.0. With an AR system, employees use
smart glasses or mobile devices to visualise real-time IoT data, digitised parts, repair or
assembly instructions, training content, and more when looking at a physical thing – like
a piece of equipment or a product. AR is still emerging but has major implications for
maintenance, service, and quality assurance as well as technician training and safety.
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Industrial Internet of Things (IIoT): The Internet of Things (IoT) – more
specifically, the Industrial Internet of Things – is so central to Industry 4.0 that the two
terms are often used interchangeably. Most physical things in Industry 4.0 – devices,
robots, machinery, equipment, products – use sensors and RFID tags to provide real-
time data about their condition, performance, or location. This technology lets
companies run smoother supply chains, rapidly design and modify products, prevent
equipment downtime, stay on top of consumer preferences, track products and
inventory, and much more.
Additive manufacturing/3D printing: Additive manufacturing, or 3D printing, is
another key technology driving Industry 4.0. 3D printing was initially used to as a rapid
prototyping tool but now offers a broader range of applications, from mass
customization to distributed manufacturing. With 3D printing, for example, parts and
products can be stored as design files in virtual inventories and printed on demand at
the point of need – reducing both transportation distances and costs.
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Autonomous robots: With Industry 4.0, a new generation of autonomous robots is
emerging. Programmed to perform tasks with minimal human intervention, autonomous
robots vary greatly in size and function, from inventory scanning drones to autonomous
mobile robots for pick and place operations. Equipped with cutting-edge software, AI,
sensors, and machine vision, these robots are capable of performing difficult and delicate
tasks – and can recognize, analyze, and act on information they receive from their
surroundings.
Simulation/digital twins: A digital twin is a virtual simulation of a real-world machine,
product, process, or system based on IoT sensor data. This core component of Industry
4.0 allows businesses to better understand, analyze, and improve the performance and
maintenance of industrial systems and products. An asset operator, for example, can use
a digital twin to identify a specific malfunctioning part, predict potential issues, and
improve uptime.
Cyber Security: With the increased connectivity and use of Big Data in Industry 4.0,
effective cyber security is paramount. By implementing a Zero Trust architecture and
technologies like machine learning and block chain, companies can automate threat
detection, prevention, and response – and minimize the risk of data breaches and
production delays across their networks.
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BENEFITS OF INDUSTRY 4.0
1. Intelligent products- Develop connected, self-aware products that are capable
of sharing information about their health, location, usage level, storage conditions,
and more. The data these smart products share can help you improve everything
from product quality and customer service to logistics and R&D. They can also
anticipate service needs, receive remote upgrades, and open the door to new,
service-based business models.
2. Intelligent factories- Run smart factories – highly digitised, largely autonomous
facilities that take full advantage of advanced technologies like Big Data, artificial
intelligence, robotics, analytics, and the IoT. Also called Factory 4.0, these plants
are self-correcting, employ smart manufacturing 4.0 processes, and make it
possible to deliver customised products cost efficiently and at scale.
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3. Intelligent assets- Almost every physical asset deployed today has built-in sensors –
which, when connected to the IoT and analytics, are game changers for enterprise
asset management. With intelligent assets, technicians can monitor asset performance
in real time, anticipate and prevent downtime, employ dynamic and predictive
maintenance, take advantage of digital twins, and tightly integrate assets and business
processes.
4. Empowered people- No matter how autonomous your systems get, you will always
need people. Empower them with technologies like AI and access to live sensor data
– so they know what’s happening on the shop floor and are ready to make quick
decisions and handle issues as they spring up. Wearable devices and augmented reality
apps can also help them solve problems, monitor their health, and keep them safe.
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CHALLENGES OF ADOPTING INDUSTRY 4.0
TECHNOLOGIES
At the current stage of Industry 4.0 development, there are certain challenges that
business leaders should be aware of before they begin implementing solutions. The
top-cited challenges were:
1. Lack of unified leadership that makes integration and cross-unit coordination
difficult
2. Difficulty selecting third-party vendors for hosting and operationalizing company
data
3. Lack of courage to launch the digitalization plan
4. Lack of in-house talent to support the integration of advanced technologies and
solutions
5. Difficulties integrating data from various sources to enable connectivity
6. Lack of knowledge about Industry 4.0, vendors, and IT outsourcing partners
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BENEFITS COMPANIES ARE EXPERIENCING
1. Radical improvements in productivity and automation: Businesses are
making data-driven decisions across their operations, improving forecast accuracy,
supporting on-time delivery, and building profit-optimized plans.
2. Resiliency and agility no matter what the market or economy
bring: Companies are shaping the future digital supply chain based on state-of-the-
art planning.
3. Confidence to explore new business models and seize opportunities
quickly: Thanks to Industry 4.0 solutions, businesses are reducing costs, improving
market efficiency, and connecting supply chains by sea, land, and air.
4. Green and sustainable solutions without sacrificing
profitability: Customers are becoming more efficient and cost-effective by going
digital – while meeting their environmental objectives without compromising on
other business goals, such as profitability and scalability.
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HOW DO YOU IMPLEMENT INDUSTRY 4.0
RELATED TECHNOLOGIES?
Understand Your Starting Position- This means
reviewing your present state of maturity and reviewing areas
of improvement for your team. Laying the foundations for
successful adoption will make the implementation process
smoother.
Prioritize Industry 3.0- In order to implement Industry
4.0 concepts, Industry 3.0 principles must be in place. Most
companies aren’t ready to implement Industry 4.0 solutions
because they are yet to implement Industry 3.0. 23
Define a Strategy- Having a plan is a necessity before adopting Industry 4.0
solutions. Define your level of target maturity, lay out a detailed implementation
plan, and assess the potential roadblocks in order to achieve your objectives.
Start Small- This applies to both Industry 3.0 and Industry 4.0. Avoid rushing
into Industry 4.0 or you could face one of the many challenges highlighted above,
such as a lack of unified leadership or in-house talent. Pick one challenge at a
time and show your organization how you resolved it using Industry 4.0
solutions. This will gain support within the business, and once the first objective
is achieved you can move onto the second pain point.
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Create a Friendly Ecosystem- If your organization isn’t ready
to embrace the concept Industry 4.0, you won’t be successful.
Create a manufacturing ecosystem wherein the physical and digital
elements of your business communicate to establish a friendly
landing pad for efficient integration.
Improve Internal Processes- It is smart to focus on end-to-
end process improvements to promote collaboration. This could
mean investing in education and training, promoting process
automation, and exploring hardware and software that could help
streamline your business. This will help you overcome the main
challenges cited by other businesses who struggled integrating
Industry 4.0 concepts and provide employees with insight into
why you are introducing new technology.
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HOW WOULD INDUSTRY 4.0 IMPACT
INEQUALITIES?
Technological change affects inequality through jobs, wages and profits. In the case of
Industry 4.0, new technology mainly increases productivity.
As companies become more productive, they are also more competitive and more
likely to hire more higher-skilled workers in better jobs. Countries in which firms adopt
Industry 4.0 could expect a higher increase in productivity and competitiveness, and
wages.
At the same time, Industry 4.0 also brings some specific challenges. For example, many
studies predict a large share of jobs lost in the economy due to AI and automation.
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HARNESSING INDUSTRY 4.0 FOR INCLUSIVE
DEVELOPMENT
Developing countries would not be able to broadly deploy Industry 4.0 if they have
weak manufacturing. They need to diversify their production towards more
technologically advanced sectors.
The state has a crucial role in promoting potential sectors, strengthening innovation
systems, building coherence between STI (science, technology and information)
policies and other social and economic ones, and ensuring a participatory approach in
this process.
Governments should also promote affordable, high-quality access to the Internet and
build digital skills in the business sector, including SMEs.
They should also create the conditions required to deploy Industry 4.0 in manufacturing.
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To foster the adoption of Industry 4.0, governments should raise the awareness of
the private sector, promote investments and facilitate financing for the deployment
of Industry 4.0.
Policy-makers in developing countries should also be attuned to changes in trade
patterns and global value chains and how they would affect their workforce.
Workers who cannot be trained or retrained and lose their jobs should rely on
stronger mechanisms of social protection.
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THE CRITICAL ROLE OF INTERNATIONAL
COLLABORATION
The international community should come together to help countries harness this
new technological wave. The risk is to perpetuate the gaps seen in previous
technological revolutions.
In this regard, five critical areas are:
1. Sharing knowledge and information and conducting research;
2. Helping design policies, strategies and implement initiatives;
3. Helping build capacity of all actors of the national innovation system on Industry 4.0;
4. Promoting technology transfer through new innovative partnership approaches,
addressing market, innovation systems and capabilities failures;
5. Helping to set legal frameworks, guidelines, norms and standards.
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INDUSTRY 4.0: 7 REAL-WORLD EXAMPLES OF
DIGITAL MANUFACTURING IN ACTION
This convergence has been made possible thanks to the emergence of digital
solutions and advanced technologies, which are often associated with Industry 4.0.
These include:
1. Industrial Internet of Things
2. Big Data
3. Cloud computing
4. Additive manufacturing (AM)
5. Advanced robotics
6. Augmented and virtual reality (AR/VR)
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1. Industrial Internet of Things- For example, IIoT can be used is to
prevent the overstocking or under stocking of inventory. One way to
achieve this is to use shelf-fitted sensors and weighing devices to broadcast
inventory information to your warehouse management system. (BJC
HealthCare adopts IIoT for inventory and supply chain
management)
2. Big Data and Analytics-by taking previously isolated data sets, collecting
and analyzing them, companies are now able to find new ways to optimize
the processes that have the greatest effect on yield. (Big Data decision-
making at Bosch Automotive factory in China)
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3. Cloud computing- Cloud computing offers a platform for users to store and
process vast amounts of data on remote servers. It enables organizations to use
computer resources without having to develop a computing
infrastructure on premise. (Volkswagen creates Automotive Cloud)
4. Advanced Robotics- With recent advancements in technology, a new
generation of advanced robotics is emerging, capable of performing difficult
and delicate tasks. (Fetch Robotics help DHL improve warehouse
operations)
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5. Additive Manufacturing- It enables parts to be stored as design files in
virtual inventories, so that they can be produced on-demand and closer
to the point of need — a model known as distributed manufacturing.
(Fast Radius’ digital additive manufacturing solutions to enable
new business models)
6. Digital Twins- This enables the digital twin to predict potential issues
so that preemptive measures can be taken. For example, an operator can use
a digital twin to identify why a part is malfunctioning or to predict the
lifetime of a product. This continuous simulation helps to improve designs of
products as well as to ensure equipment uptime.
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7. Augmented reality- In the context of
manufacturing, AR could enable workers to speed
up the assembly process and improve
decision-making. For example, AR glasses could
be used to project data, such as layouts, assembly
guidelines, sites of possible malfunction, or a serial
number of components, on the real part, facilitating
faster and easier work procedures. (AR increases
productivity at GE)
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