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What is Industry 4.0?

Updated: 6 days ago

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. How to get started?

What is Industry 4.0?

" Each in his own opinion,

Exceeding stiff and strong.

Though each was partly in the right,

And all were in the wrong! "

In John Godfrey Saxe’s famous poem ‘’The Blind Men and the Elephant’’, six blind come across an elephant for the first time in their lives and try to conceptualize it by touching it. a different part of the elephant, leading to complete disagreement on what an elephant is. The story illustrates how humans tend to take their partial experiences as a whole truth, and their individual perspectives as the one and only version of reality.

Blind men describing an elephant
Source: Medium

Watch out for jargon, hype and ignorance

I listen in on many conversations about Industry 4.0 that take place inside organizations, at industry conferences, during webinars and podcasts, and in published magazine articles, 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 "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 are also different. The real disservice is not that a presenter or author has a different understanding than me or anyone else of the terms being used. The disservice is that they fail to provide any definition at all, as context for their remarks. Apart from any pure misunderstanding of the topic, the listener also must be on guard for the potential commercial bias implicit in many presentations, especially if delivered by an industry solution provider. 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.

Hammer and a nail

My personal Industry 4.0 Journey

I traveled to the Hannover Trade 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 Places (Chicago) spread out over a dozen or more enormous halls. I had blisters on my feet after the first day. It was worth it! I was immediately awestruck by the technologies, ideas, solutions, and overall potential for Industry 4.0 to be a game changer for the manufacturers who I work with on a daily basis.

Industry 4.0 ... 3 Perspectives

I recommend that readers focus on 3 basic perspectives of the 4th Industrial Revolution (aka Industry 4.0) for a basic grounding on the topic:

  1. The Historical Perspective

  2. The Pillars of Technology

  3. The Design Principles

Historical Perspective

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", which was the 2016 theme of the World Economic Forum Annual Meeting. Click here to learn more about the origins of the Fourth Industrial Revolution.

4th Industrial Revolution
image provided by Forbes

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

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.

While there certainly have been new technologies that have emerged over the last ten years, they generally fit within these pillars and I consider this framework from BCG to be very prescient given pace of change and the timeframe when it was published.

Nine pillars of technology

Six Design Principles

In 2016 Mario Hermann, Tobias Pentek, and Boris Otto identified six design principles for the implementation of Cyber-physical Systems. The six design principles describe the functional requirements of a data-driven system architecture. These requirements emphasize the art of what is possible today with the nine pillars of technology, In essence, the Design Principles are the "rosetta stone" or decoder ring for translating the core technologies into the solutions and use cases which some refer to as Smart Manufacturing. Click here to read the original paper publish on the topic. Colin Koh also authored a nice summary in this article published at

  1. Interoperability

  2. Information Transparency

  3. Autonomous Operations

  4. Real-time capability

  5. Service orientation

  6. Modularity

Unpacking Industry 4.0

I40 is an abbreviation for Industry 4.0.

Industry 4.0 is a reference to the 4th Industrial Revolution.

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

Cyber-physical Systems are enabled by convergence across 9 Pillars of information and operating Technology

Cyber-physical Systems enable new solutions for operating efficiency and new business opportunities through the Six Design Principles of a Data-driven System Architecture.

Related, but different

  • Digital Transformation - According to IBM, Digital Transformation is a strategic initiative that incorporates digital technology across all areas of an organization. It evaluates and modernizes an organization’s processes, products, operations and technology stack to enable continual, rapid, customer-driven innovation. Digital Transformation is generally considered to more broadly address the entire business model of an organization relative to Smart Manufacturing or Industry 4.0. (Read more)

  • Smart Manufacturing - The term Smart Manufacturing is somewhat US centric and has a modern history dating back to 2015 with the California Network for Manufacturing Innovation (CNMI), a forerunner to what is now CESMII. CESMII defines Smart Manufacturing as the information-driven, event-driven, efficient and collaborative orchestration of business, physical and digital processes within plants, factories and across the entire value chain. Read more from CESMII about Smart Manufacturing. Smart Manufacturing is also the preferred terminology used by the National Institute for Standards and Technology (NIST) - see their website here. I suggest considering Smart Manufacturing as a destination for your journey through the 4th Industrial Revolution.

  • 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 nine pillars of technology that enable Cyber-physical Systems within the 4th Industrial Revolution. IIoT technology is also a critical enabler to Smart Manufacturing and Digital Transformation. (Read more)

So What?

Now that we have focused on "what Industry 4.0 is" in this post, the next up post will address why it is important?

Spoiler Alert, ... it's all about becoming a Data-Driven Organization!

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