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Moving into Industry 4.0 without breaking the bank

How do I move to Industry 4.0 without Breaking the Bank?

Industry 4.0 – ‘the fourth Industrial Revolution’ – gives us an opportunity to increase efficiency and flexibility, improve productivity and reduce costs through the application of Smart Technologies. This is achieved by introducing intelligence to our automated systems through adding or embedding electronics systems to manage the production process without human intervention and to inform our wider decision making.

In his keynote at the 2014 NEXT Conference, Dirk Salma, Director of Business Development at Bosch Software said, “It’s not only the things that we manufacture that become more and more intelligent and connected, but it’s also that the manufacturing process itself that can really leverage these technologies and concepts in Industry 4.0.”

Industry 4.0 or Smart Factory?

Fundamentally, these terms are interchangeable; Industry 4.0’s roots are in Europe and Smart Factories in the USA. You can also add the terms Industrial Internet of Things (IoT or IIoT) and Digital Transformation to the mix; these terms all embrace the move beyond automation to intelligence in our systems, whether in a mass production assembly line or a more flexible production process.

Is Industry 4.0 only for Manufacturing?

Not at all. One of the drivers for using the term Industry 4.0 rather than Smart Factories is that these technologies are not simply for use in Manufacturing, but in a wider range of use cases such as Smart Warehouses, Smart Logistics, Smart Buildings, etc. These include offices, airports, hospitals, or Critical National Infrastructure such as oil and gas terminals, electricity substations and power plants.

The 9 Pillars of Industry 4.0

Defining the set of Industry 4.0 technologies, the 9 Pillars of Industry 4.0 really function as a boilerplate for what can be used to achieve your Industry 4.0/Smart Factory goals; especially given these objectives will continue to change and evolve as you move along this path. Also do not forget that some of these pillars may not apply to your industry or use case, for example you are unlikely to dive into the world of Big Data in the initial stages of your Digital Transformation.

The task then is not to frame a process around achieving these 9 Pillars but to use them as an indicator of the tools available to you on the Smart Factory journey.

Augmented Reality

This adds a visual layer on to the real world; enabling you to show a customer what a product would look like in situ without a physical copy of it.

Additive Manufacturing and 3D Printing

So, what is Additive Manufacturing in Industry 4.0? Much of manufacturing has been to take material away to deliver a finished product. Additive Manufacturing uses 3D Printing to build a product layer upon layer, delivering a concept straight from Design Tool to finished goods.

Industrial Internet of Things (IIoT)

More devices have the capability to connect through your network and deliver useful data; in fact, many of your Machine Tools may already have this available without you using this, or even being aware of it. Add in an array of sensors to these machines and the production environment and these Industry 4.0 technologies will give you insights to optimise processes and machine utilisation – including predictive rather than preventive maintenance and tool life, wider and faster awareness of any issues, insights into behaviours (both human and machine), and the flexibility for both centralised and de-centralised analysis and decision making.

Big Data and Data Analytics

Building on the Internet of Things, Big Data uses the vast array of data available to you, some of which will be real-time data, and some may be from third parties and the public domain, to gain even wider insights by ‘mining’ this data to discover patterns and allow manipulation to enable real time decision making and use Machine Learning to predict likely outcomes.

Cloud Computing

The Cloud gives you an opportunity to share data as never before, not only across sites and entire countries in your own operation but with both customers and suppliers. This sharing really adds to the efficiency and usefulness of your Enterprise Resource Planning (ERP) platform, enabling real time inventory management at both yours and your suppliers’ facilities, while increasing customer engagement and hopefully customer satisfaction, too.


Simulation gives you the opportunity to innovate, plan and forecast, using real-time, real-world data gathered from your machines and sensors to build a virtual world combining assets, products and humans – a Digital Twin.

There are as many definitions of a Digital Twin as there are people trying to define what one is, but at their core they will use real data you are using on a day-to-day basis to build a model of appropriate sophistication to allow operators to optimise machine setup and usage. This includes helping designers and developers to trial production techniques and as a way for management to ‘war game’ situations that may occur to individual assets, cells, or indeed a complete industrial site.

Autonomous Systems

In Manufacturing and Assembly, this commonly means the use of Robots; specifically for gathering information about its processes and environment to make decisions for itself thus freeing up your human operators for alternative tasks.

Horizontal and Vertical Integration

A successful Digital Transformation to Industry 4.0 will lead to increased communications possibilities across departments, and indeed with your suppliers and customers. This will facilitate a considerable increase in the effectiveness of your Enterprise Resource Planning (ERP) system. An ERP is often the bane of people’s lives, especially if it is seen as an imposition or an impediment, rather than a fantastic opportunity to increase efficiency and effectiveness.

Cyber Security in Industry 4.0

Any system needs to balance effectiveness and ease of working against security. The opportunities that are presented to you in Industry 4.0 and Smart Factories have many shared threats due to the opening of systems across your company, and with suppliers and customers. You must therefore guard against third-party threats – these will not even target these systems but instead use vulnerabilities in these systems to exploit wider and deeper systems within your business as a whole

Retrofitting for Industry 4.0 / Smart Factory

Fundamentally, the decision to enter a Digital Transformation into Industry 4.0 is a people issue rather than a technology one. There will be scepticism and even resistance in many layers and areas of your business and so early success in any long-term plan will be a real boost for the project as a whole.

You may find that several of the machines and processes you use already have data connectivity that you are not using or are not even aware of. Enabling this can prove to be the first ‘easy win’ in your Industry 4.0 journey – the germ of a Smart Factory with existing datasets will show the potential with little outlay.

Complement these existing insights with some key sensor data, through easy-to-use dashboards and reporting, and you will again see early examples of the benefits of Digital Transformation. You may only be scratching the surface of those Nine Pillars of Industry 4.0 – focusing on the Industrial Internet of Things, some Data Analytics and Cloud Computing – but using these as a stepping stone will give tangible results of the transformation process.


There is real substance behind the concepts of Industry 4.0 and Smart Factories; they are not just academic or theoretical terms that have no relevance to you and the future of your business. Digital Transformation is not just an event – it is a ‘lightbulb moment’ that sets you on an inexorable path – but a process that springs from a collective conviction and drive for continuous improvement that delivers better products and services to your customers in a more transparent and efficient way.

Using the system(s) you already have in place as a basis you can develop pilot schemes to implement these technologies in just one or two areas. Primarily, you must bring colleagues along with you every step of the way. Do not be afraid to reach out for external support on both the people and the technology aspects of your Transformation project and be prepared to fail along the way – failure will be a great guide to success overall.


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