Automated FutureProduction Optimization

Industry 4.0 or Data Equals Productivity

A story of how data became the tool in our quest for productivity, what Industry 4.0 can offer and why it is beneficial for both small and big manufacturers. 

For the big part of the human history a vast majority of world’s production output came from farms and was limited by the fixed size of the land. The world was a zero-sum game.  In order to increase wealth one would gain resources at the expense of the other through conquer or theft. As a result, economic inequality was extreme.

Things changed in the middle of the 18th century – the time when the First Industrial Revolution began. It replaced agriculture with industry. Mass extraction of coal and the invention of steam engine created a new type of energy that accelerated the exchange of raw materials, goods and human labor. More goods were produced across sectors, more jobs were created and more wealth was generated. The world became a positive-sum game. It became clear: energy drives productivity; productivity creates more value. The humanity’s quest for new sources of energy and productivity increases began.

One century later, the Second Industrial Revolution brought other new sources of energy: electricity, gas and oil. The invention of the combustion engine provided the desired productivity boost. Manufacturing hit mass production scale. Large factories with extensive research facilities and capital funds emerged. The invention of the telegraph and the telephone enabled faster exchange of information. The invention of the automobile and the plane revolutionized transportation of materials, products and people.

In the 20th century, the Third Industrial Revolution witnessed a number of new developments: the new and superior type of energy (the nuclear energy), the rise of telecommunications, the invention of a computer, a programmable logic controller (PLC) and a robot. The use of electronics and information technology in manufacturing laid the foundations of production automation and unleashed a new set opportunities for increased productivity.

Today, the Fourth Industrial Revolution is underway. Unlike its predecessors, it is not concerned so much with the search of new source of energy to achieve productivity increases. It is based on a new technological phenomenon – digitization – which enables us to create a virtual world from which we control the physical world, blurring the boundaries between the two.

In the context of manufacturing, this new development is known as Industry 4.0. It is characterized by a set of technologies enabling the smart factory, such as:

  • cyber-physical systems;
  • Big Data and analytics;
  • Industrial Internet of Things (IIoT);
  • advanced industrial robotics;
  • 3D printing;
  • new forms of human-machine interaction (e.g. touch interfaces, Augmented Reality).

Smart factories are also characterized by these design principles:

  • Interoperability: the network of machines, devices, sensors and people communicate and collaborate among each other through the IIoT in real time.
  • Virtualization: through the collection of sensor data, a virtual copy of the physical environment is created enabling simulation of processes.
  • Decentralization: cyber-physical systems make decisions and perform tasks autonomously.
  • Real-time decision-making: with data collected and analysed in real time, process failures and changes are addressed immediately.
  • Modularity design: a modular production system allows for quick system adaption to changing production requirements.

In this day and age, data is what drives productivity increases. At its core, Industry 4.0 is about data. It provides manufacturers with a more efficient way to improve production outcomes (e.g. speed, production cost, quality, quantity and so on), address process failures and downtime, eliminate material and energy waste, implement changes and reinvent the production process and the product design.

Industry 4.0 offers a broad range of applications. They largely depend on the concrete goals of the manufacturers but among the most common are:

  • predictive maintenance;
  • anomaly detection;
  • real-time decision-making;
  • product-centric manufacturing;
  • efficient manufacturing of customized products;
  • sustainable use of materials and energy;
  • inventory planning based on production;
  • efficient coordination of work;
  • and more.

These are opportunities that both big and small manufacturers can benefit from. With technology offered through Industry 4.0, mass manufacturers are able to increase efficiency and flexibility of their production process, while smaller manufacturers can compete on production cost and product quality with bigger players.

Not only is Industry 4.0 the next step in our quest for productivity but it is also a tool for inclusive innovation. Ever since the beginning of industrialization, the humanity has been using technology to create more wealth and drive progress. As more wealth has been generated over time, newer more accessible technologies emerged and spread, more companies were built around them and the competition increased. In today’s competitive marketplace, competition drives innovation. And with a new set technology tools that are more accessible than ever, both big and small manufacturers got a shot at innovation of new better products.


We would love to read your thoughts and ideas on Industry 4.0 in the comment section below.

For more content on production automation, click here.

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