Industry 4.0: What it is and Where it’s Going

people working in technology.

Have you encountered the term “Industry 4.0?” Many have not, yet it signals what is potentially a seismic shift in industry, and one not without its challenges. The concept of Industry 4.0, or the fourth Industrial Revolution, has been around for roughly a decade, yet as of 2020 one study showed that less than half of all business leaders had a solid understanding of the term.

What is Industry 4.0?

As noted, the “4.0” part of the term references what’s generally considered to be the fourth Industrial Revolution. The first Industrial Revolution, of course, began in the late 18th century as manual means of production gave way to water and then steam power.

A century or so later, gas, electric and oil power began to supplant steam, ushering in the second Industrial Revolution. Then in the mid-20th century, the third incarnation saw the addition of computers and telecommunications, and even some basic forms of automation, to industrial processes.

Now comes Industry 4.0, a result of the advent of smart technologies including AI, VR, robotics, 3D printing and connected systems.

The Technology of Industry 4.0

While specific applications will vary widely from industry to industry and even from organization to organization, the pillars of technology driving Industry 4.0 include:

The Internet of Things (IoT): IoT devices are as common as your Smart TV, but in industry the IoT encompasses machines of all kinds that can communicate with each other and provide a continuous flow of data via the cloud. This allows for better data analysis and potentially improved automation processes.

Cloud and edge computing: Cloud technology makes any organization, industrial or not, more efficient by streamlining the collection and integration of data. Edge computing draws its name from data analysis processes conducted “on the edge;” essentially, the analysis of the data happens closer to the source of the data, allowing for more timely decision making and reducing security risks.

AI and machine learning: Anyone who’s dabbled with ChatGPT can begin to see the potential for AI and machine learning. In industry, the benefits can include improved automation processes, forewarning of pending machine breakdowns and vastly improved insights into business processes.

Robotics: The use of robots in manufacturing, for one example, is nothing new. The robotics of Industry 4.0 take this to another level with innovations such as drivers forklifts and other automated guided vehicles (AGVs).

VR and XR: Virtual reality and extended reality aren’t just for gamers. Companies of all stripes are using VR and XR to improve collaboration, boost creativity and take employee training processes to a new level.

If all that sounds like it doesn’t have much to do with the machinery and smokestacks we associate with the term “industry,” consider the advent of the digital twin. Made possible by a combination of the above technologies, digital twins are virtual replicas of anything from a single machine to an entire production line or supply chain. The digital twin can be manipulated to experiment and discover new efficiencies without affecting the operation of the original. Greater productivity, reduced downtime and more efficient supply chains are all potential outcomes.

Challenges of Industry 4.0

In a time when finding adequate numbers of workers has been a hurdle for many organizations, the shift to Industry 4.0 adds a new degree of difficulty by requiring different skill sets in many cases. Technological aptitude will be a requirement for a growing number of positions.

The flip side of that concern is whether increased automation and machine learning will reduce the number of humans required. Job displacement is likely to be a reality in certain industries.

Every machine in the IoT and every new nexus of the shared data is also a potential new point of entry for a data breach. Data privacy and security will continue to grow in importance as Industry 4.0 forges ahead.

Finally, the various technologies driving Industry 4.0 obviously aren’t free. The costs associated with acquisition and implementation are significant, and many organizations will need more convincing of the value proposition. In some ways this is already happening as the supply chain issues of the last few years have led some companies to seek greater efficiencies by deploying some or all of these technologies.