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What is Industry 4.0?

Updated: Nov 26, 2023

This the 1st post in a 3 part series covering the topics of:

  1. What is Industry 4.0?

  2. Why is it important?

  3. Where to start?

What, so what & now what

There is a reflective model that is used sometimes to help frame a discussion or event known as "what, so what & now what" (Click Here to learn more). We used it at Whirlpool throughout my career when we caught our discussions drifting "too far "in the weeds" during a staff meeting. It is a wonderful habit to practice in order to make discussions more productive and actionable.

Source: Medium

Industry 4.0, watch out for the jargon and hype

I feel like the "what, so what, now what" framework could be helpful to many organizations who are tuning in to conversations about Industry 4.0 taking place at conferences and in webinars, magazine articles, podcasts, etc. I feel strongly that speakers, presenters, authors or other "thought leaders" do their audience a huge disservice when they start their remarks by referencing Industry 4.0 as "just a buzz word" and/or suggesting that it is synonymous with Smart Manufacturing, Digital Transformation, the Industrial Internet of Things or other terms.

These terms are certainly related, but different. The real disservice is not that a presenter or author has a misunderstanding of the terms they are referencing, it is that they fail to provide any definition at all as context for their comments. Apart from the pure misunderstanding of the topic, we also have to be conscious of the commercial bias implicit in many presentations from industry solution providers of all types. It seems that everyone has a solution for "Industry 4.0". As they say, when the only tool you have is a hammer, every problem is a nail.

My Industry 4.0 Journey

I traveled to the Hannover Messe Fair in Germany in 2016. This is one of the world’s largest industrial trade fairs, held on the fairground in Hanover, Germany and essentially, the birthplace of Industry 4.0 back in 2011. Typically, there are about 6,500 exhibitors and 250,000 visitors. I recall that is seemed the size of several McCormick Centers (Chicago) spread out over a dozen or more enormous halls. I had blisters on my feet after the first day, but became awestruck by the technologies, principles, solutions, and overall potential for Industry 4.0 to be a game changer for manufacturers on a global scale.

Back to the Origins

It is generally accepted that the concept of the Fourth Industrial Revolution was first introduced in Germany around 2011. Klaus Schwab, executive chairman of the World Economic Forum (WEF), introduced the phrase to a wider audience in a 2015 article. "Mastering the Fourth Industrial Revolution" was the 2016 theme of the World Economic Forum Annual Meeting. Click here to learn more about the origins of the Fourth Industrial Revolution.

image provided by Forbes

The distinguishing characteristic of the 4th Industrial Revolution are Cyber-Physical Systems. Cyber-Physical Systems are created through the integration of sensing, computation, control and networking into physical objects and infrastructure, connecting them to the Internet and to each other.

The Nine Pillars of Technology

in 2015, The Boston Consulting Group published "Industry 4.0: The Future of Productivity and Growth in Manufacturing Industries". This article explained how nine advances in technology that form the foundation for Industry 4.0 are already used in manufacturing, but with Industry 4.0, they will transform production: isolated, optimized cells will come together as a fully integrated, automated, and optimized production flow, leading to greater efficiencies and changing traditional production relationships among suppliers, producers, and customers—as well as between human and machine.

6 Design Principles

In 2016 Mario Hermann, Tobias Pentek, and Boris Otto identified six design principles for the implementation of Cyber-physical Systems. The 6 design principles describe the functional requirements of a data-driven system architecture. These requirements emphasize the art of what is possible today with the 9 pillars of technology, The 6 design principles are a large part of the "so what" related to Industry. 4.0. Click Here to read more about the 6 design principles.

Unpacking Industry 4.0

When I apply the "what, so what, now what" framework to Industry 4.0, it reads a little bit like the famous nursery rhyme "The house that Jack built". My apologies for readers too young to be familiar with this classic!

  • I40 or I4.0 are abbreviations for Industry 4.0.

    • Industry 4.0 is a reference for the 4th Industrial Revolution.

      • The 4th Industrial Revolution is the new paradigm or time period we live in currently which is characterized by Cyber-physical Systems.

        • Cyber-physical Systems are enabled by IT (Information Technology)/OT (Operating Technology) Convergence and are implemented according to Design Principles within a system architecture.

          • IT/OT Convergence represents the integration of sensing, computation, control and networking into physical objects and infrastructure, connecting them to the Internet and to each other.

          • Design Principles define the implementation objectives companies should take into account when designing their system architecture.

Related, but different terms

  • Digital Transformation - The process of adoption and implementation of digital technology by an organization in order to create new or modify existing products, services and operations. Digital Transformation is generally considered to more broadly address the entire business model of an organization. (Read more)

  • Smart Manufacturing - Smart Manufacturing is the information-driven, event-driven, efficient and collaborative orchestration of business, physical and digital processes within plants, factories and across the entire value chain. Consider Smart Manufacturing as the destinatiion for your Industry 4.0 Journey (Read more)

  • Industrial Internet of Things - The industrial Internet of Things (IoT) is a network of physical devices, machines and other objects that use sensors and software to collect data and exchange it over the internet, enabling remote monitoring and control. IIoT is one of the 9 pillars of technology that is enabling the 4th Industrial Revolution (Read more)

So What?

Now that we have focused on "what Industry 4.0 is" in this post, the follow up post will address why it is important ... or So What? Spoiler Alert, ... it's all about becoming a Data-Driven Organization!

Additional Resources

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