What is Industry 4.0? Here’s Everything You Need to Know

What is Industry 4.0

The manufacturing industry is home to many different sorts of technical terms and jargon, but none are as all-encompassing as Industry 4.0. In fact, the term itself was coined due to a massive shift in the way we produce products.

What is Industry 4.0

In this article, we will be explaining the core principles of Industry 4.0 and providing a detailed breakdown of what it means for your business.

What is Industry 4.0?

The term Industry 4.0 sounds like the name of an obscure sci-fi movie, which may appear confusing to those who are new to the manufacturing sector. However, the term Industry 4.0 actually refers to the 4th Industrial Revolution, a phase in the evolution of mankind’s manufacturing processes.

We have had three Industrial Revolutions in the past, the first took place in Britain during the 18th century, with mechanisation.

The Second Industrial Revolution took place around the early 20th century with improved manufacturing processes and assembly lines.

The Third Industrial Revolution took place in the 1960s with the implementation of digital technology.

Industry 4.0 really started to take shape in the 2010s, as computers became more powerful and the internet became more interconnected than ever before.

Particularly important is the introduction of the smartphone (The iPhone 3G in 2009), as it allowed for the development of applications which could link devices, and the widespread use of Bluetooth and wireless technology.

These days, the term Industry 4.0 is commonly used as a buzzword for smart manufacturing processes, and how the Internet of Things (also known as IoT) has become so interconnected that it can be used to simplify the production process.

Overall, the main idea of Industry 4.0 is to create a well-rounded and holistic ecosystem for manufacturing processes, technology and applications. This idea of smart manufacturing will revolutionise how products are developed, and lead to more automation and less routine manual labour.

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The 9 Pillars of Industry 4.0

There are 9 pillars of Industry 4.0. These are the 9 core technologies which make up the bulk of the manufacturing process in the new paradigm. The 9 core pillars are:

  • Big Data and Analytics
  • Autonomous Robots
  • Simulation
  • Horizontal and Vertical System Integration
  • Industrial Internet of Things (IIoT)
  • Cybersecurity
  • The Cloud
  • Additive Manufacturing
  • Augmented Reality
  1. Big Data and Analytics

    This refers to the use of statistics, graphs and data analysis to measure performance and tweak systems to optimise productivity and other goals.

  2. Autonomous Robots

    Robots which can function on their own with minimal supervision are valuable tools in Industry 4.0. These have led to the creation of “dark factories” (also known as Lights-Out manufacturing), where machines do all the production with minimal human supervision and continue running deep into the night.

  3. Simulation

    The use of visual aids and software to simulate complex processes and designs has become commonplace in every engineering or manufacturing firm.

  4. Horizontal and Vertical System Integration

    The cohesiveness of hierarchies within a company will improve due to the implementation of data integration networks and cross-company collaboration will be much easier.

  5. Industrial Internet of Things (IIoT)

    The widespread use of embedded computing allows for decentralisation as every device can communicate remotely and provide data at a moment’s notice. Real-time responses will be much faster due to the decentralisation process.

  6. Cybersecurity

    Increased connectivity comes with an increased risk of security breaches. This creates a need for cybersecurity and defensive measures to safeguard information.

  7. The Cloud

    Sharing of data and transparency is critical to Industry 4.0. The adoption of cloud technology allows for seamless sharing of data and better interconnectivity.

  8. Additive Manufacturing

    As part of the design process, 3D printing and modelling have become essential for building prototypes and lightweight designs and allows companies to translate simulations into reality.

  9. Augmented Reality (AR)

    AR is the final frontier in the Industry 4.0 paradigm. Current uses include selecting parts in warehouses and visualising possible design options. In the future, it can definitely be developed to provide real-time data and information for workers.

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The Fundamental Principles of Industry 4.0

Now that we know what Industry 4.0 is about, let us explore the detailed principles within it.
There are 4 fundamental principles of Industry 4.0, listed below:

  • Interconnection
  • Information Transparency
  • Technical Assistance
  • Decentralised decisions
  1. Interconnection

    Interconnection in the context of Industry 4.0 refers to the ability for technology and people to communicate effortlessly in a smart ecosystem. This is heavily linked to the Internet of Things (IoT) concept.

  2. Information Transparency

    As the name suggests, this refers to the use of data and statistics in the manufacturing process to allow for innovation and improvement, as well as targeted troubleshooting of problems.

  3. Technical Assistance

    Technical assistance in Industry 4.0 means that humans no longer have to calculate and solve problems manually, but with the aid of computing software and simulators which can make things easier to visualise.

    Technical assistance also refers to machines taking over physical tasks which are either unpleasant or exhausting for workers.

  4. Decentralised Decisions

    Finally, as everything is either automated or controlled remotely, cyber-physical systems are able to make decisions on their own and perform tasks in an autonomous manner.

    The only exception to this rule is in the event of a technical error, or conflicting goals.

How Industry 4.0 is Implemented

Now that the main principles have been explained, the implementation of the technology will be covered.

Software and Tools

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The main tools that manufacturers and product designers utilise in the smart manufacturing ecosystem are simulators, data processing and visualisation software, 3D modelling and printing and more.

Simulators are used in the design and planning stage to map out exactly how production can be done and the specifications for the product.

A few good examples of visualisation software and simulators are Vuforia Studio, ANSYS, CAESS PROTOp and Moldex3D, which engineers, designers and manufacturers rely on to build prototypes and test out simulations.

For the production scheduling process, manufacturers use Enterprise Resource Planning (ERP) software, which helps to manage and schedule events in the production process.

A more powerful version of an ERP is what is known as Advanced Production Scheduling (APS for short), and a good example of an APS is the SIMATIC IT Preactor AS software.

Manufacturers will also want to utilise dedicated IoT software to boost their ROI and productivity.

Most IoT applications can handle multiple tasks such as managing production processes, using AR (augmented reality) simulation, connecting devices and applications across the board (including ERP and CRM), and data analysis.

Some great IoT software includes ThingWorx IIoT, KepWare and Vuforia Chalk.

In addition to the software mentioned, cloud storage, real-time data processing and Cyber-Physical Systems (CPS) are used to improve the manufacturing process and facilitate smart manufacturing within the Industry 4.0 framework.

Benefits of Smart Manufacturing, IoT and Data-Driven Software

The main benefits of the Industry 4.0 revolution are:

  • Higher productivity and ROI
  • Convenience
  • Reduced Cost
  1. Increased Productivity

    The benefits of Industry 4.0 include increased productivity and efficiency due to the mechanisation and automation of routine tasks, which are done with precision due to the use of sophisticated 3D modelling techniques or simulation.

    The overall production workflow is also much smoother with technology integrated into every step of the entire manufacturing journey.

    This way, the entire manufacturing chain can be optimised and function as a cohesive unit and results in increased ROI and profits for manufacturers.

    While the investment of time and money into learning and mastering the required software might deter some business owners, the outcome of a smart manufacturing system outweighs the cons.

  2. Convenience

    Business owners will be able to decentralise the workload and allow for more domain-specific tasks for employees.

    Additionally, the interconnected nature of the system means you can monitor the business remotely from home and share data with colleagues and employees for analysis without it being too troublesome.

    It may also have a positive effect on company culture as a whole.

    Cloud storage is also a massive bonus as it minimises the need for physical databases and storage devices cluttering the workplace and taking up space.

  3. Reduced Cost

    Investing in Industry 4.0 technologies will require a bit of capital at the start, but once the systems are fully integrated into your company, you will experience reduced costs overall, due to better management of resources(due to data analytics), increased productivity, reduced product waste and lower production downtime.

Drawbacks of Smart Manufacturing, IoT and Data-Driven Software

There are almost no drawbacks to the interconnected system apart from the following:

  • Hackers and Internet Theft
  • Lack of technical knowledge
  1. Security Threat

    The first downside is that the security of your data may be compromised especially when using cloud storage or any online storage repository.

    Designs and prototypes may be stolen or hacked into if there are no security protocols in place.

    Additionally, malware, spyware and other malicious software can get in via backdoors or brute force algorithms.

    Also, due to the fact that IoT is rather new, developers may not have had the time to test out security protocols before rolling out the software.

    There also exists the problem of default passwords, which business owners and clients may neglect to change due to convenience.

    The obvious solution is to encrypt data stored online and make sure that all parties involved have set passwords for accounts.

    Deleting cached data (that is no longer needed) should also be a common practice. Additional firewalls and protective software should also be installed on computers to prevent malicious attacks.

  2. Lack of Technical Knowledge

    Another problem with the recency of Industry 4.0 is that the technology may be too advanced for business owners to fully understand, and technical aspects of the technology may also be overlooked.

    This includes IP network misconfigurations, unstable networks or faulty calibration of devices by the vendor.

    Thankfully, most software comes with detailed technical support manuals and hotlines to assist with technical issues.

    Business owners may also turn to online courses and training programs which can teach employees how to use a program which usually takes less than 3 days to complete.


Industry 4.0 has already begun, and it signals the start of a new way of thinking of manufacturing processes.

The adoption of IoT software, data-driven analytics and connectivity will be crucial for manufacturers and product designers to stay afloat in the new, highly competitive landscape.

There is no better time than now to start integrating smart manufacturing into your business production chain.

To find out more about the software at the forefront of this technological revolution, check out this list of products which covers 3D modelling software, IoT, Augmented Reality, simulation and more.

Alternatively, feel free to drop us an enquiry if you are interested in any of our products.


Image credits:

1. Robin Sommer on Unsplash

2. Jezael Melgoza on Unsplash

3. boostinjay on Unsplash

4. ThisisEngineering RAEng on Unsplash

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