Industry 4.0 and its role in improving productivity in manufacturing


Manufacturing operations dramatically changed in the last four centuries: knowledge and technology were the subjects of a remarkable evolution and transformation. Understanding how and why it happened can help grasp what will happen in the future of manufacturing operations.

From industry 1.0 to industry 4.0

Industry 1.0

It all started in the 18th century with the Industrial Revolution. The switch from manual labor or handwork to machine-based production marked the beginning of Industry 1.0. Although steam power was already known, its use as a source of energy was a breakthrough discovery at that time. As a result, some technological developments were thriving in that period, such as steam-powered locomotives, the power loom, and steamships. That resulted in productivity increases that led to the growth of factories and mass production.

Industry 2.0

The development of electricity and the internal combustion engine were the milestones that triggered the 2nd Industrial Revolution in the late 19th and early 20th centuries. There was also the development of new materials, such as steel and concrete, widely used in construction. Henry Ford played a significant role in defining a high productivity standard for the automotive industry that was created in this period. Also, chemical manufacturing further increased its productivity at a lower cost.

Industry 3.0

In the late 20th century, began the Digital Revolution, also known as Industry 3.0, marked by the development of computers, memory-programmable controls, and the internet. The introduction of these technologies allowed for automation to be used in production processes that started being performed without human assistance. Robots that performed programmed sequences without workers’ intervention were commonly used in factories. Besides, the widespread use of the internet was responsible for creating new business models, such as e-commerce.

Industry 4.0

Industry 4.0 refers to the 4th Industrial Revolution and is the current period of technological development. It is a digital revolution marked by the integration of information and communication advanced technologies, such as artificial intelligence, machine learning, the Internet of Things (IoT), and robotics in industrial processes. This revolution is the next step in production automation as it creates “smart factories” that are highly automated, data-driven, and fully connected to supply chains. Implementing a structured, agile, and collaborative approach has significantly increased efficiency and productivity in manufacturing operations.

Industry 4.0 challenges and risks

There is immense potential in Industry 4.0 tools and systems, mainly because they eliminate non-value-added tasks, allowing humans to spend time on creative work and value-added processes. Nonetheless, this revolution also brings several risks and challenges that need to be considered by companies’ management teams and governments:

High cost of implementing new technologies

To be competitive in an Industry 4.0 manufacturing environment, companies must extensively renovate machines, computers, and technological equipment, which may be challenging for smaller companies and/or less developed countries.

Security and cyber-attacks

The interconnection between different systems, devices, and machines, increases the possibility of potential security breaches that could result in the misuse of sensitive personal data, damage to equipment, or interference with operations. Therefore, having a comprehensive privacy policy and analyzing potential cyber security risks must be cornerstones of any digitalization strategy undertaken by services or manufacturing companies.

Job displacement and re-skilling

Automating many tasks may lead to job elimination and workers needing to be trained in new skills and adapt to new roles. Significant investment will be required to develop computer and technological skills vital for the new job roles.

The role of KAIZEN™ in Industry 4.0

These challenges must be considered when analyzing Industry 4.0’s potential to improve operation efficiency, flexibility, and productivity. A KAIZEN™ approach to Industry 4.0  may help mitigate these risks and seize this revolution’s full potential by defining a digital transformation plan that ensures results, progress, and sustainability. To do this, it is essential to:

  1. Define strategic goals: the starting point should always be the company’s medium and long-term goals. There must be a robust process for its definition and deployment
  2. Analyze the value chains: analyze the current state of the company’s main value chains and identify the need for transformation (people, processes, technology, business model) to achieve the strategic goals
  3. Design the future vision: define the transformation plan that includes cultural transformation as an integrated part of the digital transformation necessary to implement the future vision to achieve the strategic goals
  4. Clearly identify investments and returns: investments in digital transformation are high. Quantifying the impact of the solutions is essential to analyze the expected return and make decisions based on the business case

What are the technologies supporting industry 4.0

The current automation and data exchange trend in manufacturing operations is based on several technologies that can be used in several industrial sectors, including manufacturing, transport, healthcare, and services. All these technologies are enablers for better efficiency and productivity by contributing to a faster decision-making process.

We gathered a list of the leading technologies that support Industry 4.0:

Artificial Intelligence (AI)

AI concerns the ability of computer systems to perform tasks that usually require human intelligence (for example learning, problem-solving, and decision-making). In manufacturing operations, AI is often used to predict equipment failures, adapt maintenance plans accordingly, perform quality control inspections, and manage supply chain issues.

The Internet of Things (IoT)

IoT is based on the use of the internet to interconnect physical devices (such as sensors and actuators). This technology is used for real-time monitoring by collecting and transmitting data from equipment and machines.

Cloud computing

Cloud computing refers to the use of the internet to deliver computing services and storage. This enables the analysis of large amounts of data, which can be used to reduce decision-making time.

Big data and analytics

Big data and analytics are tools to analyze large volumes of data gathered from different equipment, devices, and sensors. These help to identify trends and patterns in data, giving a better insight into a specific situation or problem. In manufacturing operations, this is often used to identify correlations between variables that affect a production process, for example.

Augmented reality (AR), Virtual reality (VR), and Mixed reality (MR)

AR, VR, and MR are a set of technologies that refer to the combination of real and virtual environments and human-machine interactions generated by computer technology. This is used in industrial sectors to improve training and visualization of manufacturing or maintenance processes. It can greatly impact the employee ramp-up and contribute significantly to performing manual tasks remotely.

Additive manufacturing (3D printing)

Additive manufacturing is the process of building 3D objects by building them up layer by layer from a digital file. This technology will be widely spread in product design stages to develop prototypes or, in the execution stage, to create custom parts without having large volumes of inventory.

How can Industry 4.0 and Digitization Improve Manufacturing Responsiveness and Efficiency

Social and global economic transformations will continue to affect manufacturing operations profoundly. As explained so far, Industry 4.0 and digitization processes will play an essential role in improving efficiency, increasing productivity, and reducing lead times.

One of the most relevant ways these technologies can boost operations performance is by improving communication and collaboration. It is possible to significantly increase responsiveness using real-time communication and having seamless experiences in the cooperation among machines, people, and systems.

Production will be increasingly autonomous, reducing the number of tasks performed manually. It will be possible to predict failures better, react to unexpected events and adopt more flexible production methods. This will have a significant impact on quality, productivity, and efficiency.

As Industry 4.0 technologies enable the collection and analysis of large volumes of data from manufacturing processes, the positive impact it will have on the decision-making process is straightforward. By using real-time data to define patterns and obtain accurate conclusions, managers will be more able to identify root causes and make informed decisions that improve the overall efficiency of the manufacturing processes.

Maintenance procedures are critical in efficient manufacturing operations as they reduce machines’ downtime and workers’ micro-stoppages. As an increasing number of machines are fully monitored, it is possible to accurately predict when they will need maintenance, allowing for better planning of machines’ load and reduced downtime.

In short, Industry 4.0 and digitization will result in more responsive, productive, and efficient manufacturing processes. It will allow the simultaneous production of customized and mass-production products, drive innovation and contribute to the industry’s competitiveness.

Creating a digital manufacturing implementation plan

Digital manufacturing tools bring companies great value by providing disruptive solutions to transform their processes. Still, it is essential to have an industry 4.0 implementation plan integrated with the company’s strategic and process transformation vision. The KAIZEN™ approach starts with an end-to-end analysis of the entire value chain. This analysis leads to a customized solution design and implementation plan based on a KAIZEN™ Process and People Transformation Plan and a Digital Transformation Plan, both aligned and oriented to achieve the same goals. The solution’s implementation is executed by teams consisting of recommended technology providers and KAIZEN™ specialists together with the company’s in-house teams. This will enhance the internal knowledge and expertise of the teams. Agility is ensured through intensive working sessions involving all stakeholders.

The evolution into industry 5.0

Both Industry 4.0 and Industry 5.0 are based on the use of advanced technologies to boost operations’ efficiency, productivity, and responsiveness. Industry 5.0 is based on the principles of Industry 4.0 and includes some additional tools, such as quantum computing and advanced robotics. This set of technologies aims to create a more agile and flexible working environment. For this reason, it is considered an upgrade from Industry 4.0 as it includes social and ethical concerns about the extended use of human-machine collaboration and artificial intelligence computing.

Although Industry 5.0 is still under development, here are some differences that can help to distinguish Industry 4.0 from Industry 5.0:

  • Industry 5.0 equipment and systems will have a more decentralized decision-making system, meaning they will not rely on a central authority.
  • Industry 5.0 will have a more customer-centric approach, focusing on on-demand production and customization.
  • Industry 5.0 will widely use machine learning, predictive analytics, and advanced analytics to improve process efficiency and anticipate unexpected events.

To implement an Industry 5.0 digital transformation, it is essential to start by analyzing the current state: what processes could benefit from automation, what sensors and IoT devices could be installed to monitor production, and what the needs are in machine learning and artificial intelligence algorithms. Then, a future vision is designed using the KAIZEN™ principles and ensuring that the solutions macro architecture is defined. In this transformation process, it is vital to remember to consider employee training to use and maintain all the new technologies being implemented.

Do you still have some questions about industry 4.0?

What is industrial process automation?

Industrial process automation refers to using control technology to monitor industrial processes in real time. It contributes to efficiency and accuracy improvement, as well as reduces decision-making time.

What is a smart factory?

Smart Factory is a manufacturing facility whose operations are based on Industry 4.0 technologies and tools, such as data analytics, the Internet of Things (IoT), artificial intelligence, and automation.

What is digital transformation?

Digital Transformation refers to using digital technologies to change a company’s operation and service or product delivery in all business areas. It aims to transform how a company operates and delivers value to its customers by adopting tools such as big data and analytics, cloud computing, automation, or artificial intelligence.

What is the Internet of Things

The Internet of Things (IoT) defines the connection of devices other than traditional computers and smartphones to the internet to send and receive data. These types of equipment include thermostats, appliances, cars, and medical devices. It can contribute significantly to the automation of certain tasks, improving efficiency and responsiveness.

Is Industry 4.0 and IoT the same?

These two concepts are related, but they are not the same. The IoT is one of the tools/technologies that can be used in Industry 4.0. IoT is applied by industrial companies to use the internet to interconnect and monitor pieces of equipment and is an enabler for collecting and exchanging data between connected devices.

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