Industry 4.0 and manufacturing ecosystems

Manufacturers face changes on multiple fronts. Advanced manufacturing—in the form of additive manufacturing, advanced materials, smart, automated machines, and other technologies—is ushering in a new age of physical production. At the same time, increased connectivity and ever more sophisticated data-gathering and analytics capabilities enabled by the Internet of Things (IoT) have led to a shift toward an information-based economy. With the IoT, data, in addition to physical objects, are a source of value—and connectivity makes it possible to build smarter supply chains, manufacturing processes, and even end-to-end ecosystems.

The definition for Industry 4.0 was first introduced in 2011 at the Hannover Messe trade fair, and was the subject of an Industry 4.0 working group established by the German federal government. Germany Trade and Invest (GTAI) defines Industry 4.0 as:

A paradigm shift . . . made possible by technological advances which constitute a reversal of conventional production process logic. Simply put, this means that industrial production machinery no longer simply “processes” the product, but that the product communicates with the machinery to tell it exactly what to do.  

GTAI further adds that Industry 4.0 represents “the technological evolution from embedded systems to cyber-physical systems,” an approach that “connects embedded production technologies and smart production processes.”  In other words, Industry 4.0 is a state in which manufacturing systems and the objects they create are not simply connected, drawing physical information into the digital realm, but also communicate, analyze, and use that information to drive further intelligent action back in the physical world to execute a physical-to-digital-to-physical transition.

As the integration of information technology and operations technology evolves, manufacturers will need to assess not only where they are but where they wish to be—decisions that will dictate the types of information they will need to gather, analyze, and act upon. By integrating the information identified through the Information Value Loop, where the focus lies along the manufacturing value chain, organizations can understand which types of information will be most relevant to them as they seek to transform either their business operations, or growth, or both.

Effective use of information can in turn impact key business objectives such as business growth and business operations, and transformation can be possible across the value chain and its various stakeholders. The path to realization of Industry 4.0 involves a clear understanding of the ways in which the physical can inform the digital, and vice versa.