The physical-digital-physical loop of Industry 4.0 | Industry Products | Deloitte Netherlands

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Industry 4.0: The physical-digital-physical loop

A look at current Industry 4.0 capabilities

To understand how companies invest in Industry 4.0 to enable digital transformations, Deloitte conducted a survey among top executives of the world’s largest companies. Besides a mix of enthusiasm and ambitious plans for the future, the survey revealed a series of disconnects between the companies’ plans and actions. In this article we explore the current state of digital transformations at the organizations.

April 8, 2019

Industry 4.0 defined

Business leaders often use the terms ‘digital transformation’ and ‘Industry 4.0’ intertwined. It could indeed be argued that these concepts go hand-in-hand. Deloitte describes Industry 4.0 as: “the integration of digital information from many different sources and locations to drive the physical act of doing business, in an ongoing cycle”. This flow occurs in an iterative series of three steps, known as the physical-digital-physical loop.

Industry 4.0: The physical-digital-physical loop

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The three stages of the physical-digital-physical loop

The first stage is from physical to digital. Information from the physical world is captured and transformed into a digital record. The next stage is the processing of the data. In this digital to digital stage, the raw data is analyzed to draw meaningful insights. In the third and final stage, the digital to physical stage, these insights stimulate action and change in the physical world. This loop results in a more flexible system that is capable of adapting to and learning from changes in the environment.

Many organizations are not yet fully realizing Industry 4.0

Deloitte’s survey gives insights into what drives organizations to digital transformations as well as how they are navigating the loop. The ability to fully harness all stages of the loop is crucial to the full realization of Industry 4.0. However, many organizations are not yet able to execute this fully to practice. They mainly struggle with the final stage: using the analyzed date to make decisions in the real world. 

How to fully leverage digital transformations?

The impact of digital transformation technologies will only continue to grow. It is important that organizations learn how to not only be able to create information, but also to be able to use this information to create insights and act on these insights. 

Are you curious how your organization can fully leverage Industry 4.0? Get your free copy of the physical-digital-physical loop paper, and discover the steps you can take.

You can get your copy via this link or via they button on top of the page. 

About the Industry 4.0 paradoxes

The fourth industrial revolution expands the possibilities of digital transformations and increases their importance to organizations. Industry 4.0 combines and connects digital and physical technologies to drive more flexible, responsive and interconnected enterprises. Although this revolution carries seemingly unlimited opportunities, a true digital transformation brings implications too. Think about the way it affects the organization’s strategy, talent, business models, and even the way the company is organized.  

To understand these implications, Deloitte conducted a global survey of 361 executives in 11 countries in the Americas, Asia, and Europe. The survey captures insights from respondents in aerospace and defense, automotive, chemicals and specialty materials, industrial manufacturing, metals and mining, oil and gas, and power and utilities. 

All survey respondents are director level or higher, representing organizations with revenue of $500 million or more, with more than half (57 percent) coming from organizations with more than $1 billion in revenue.

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