• The Significance of Industry 4.0 to Manufacturing History, Technology, and Business Transformation

    by George Paes | Sep 25, 2018 | Uncategorized

    Optessa Industry 4.0

    What is Industry 4.0

    There is an increasingly rapid transformation in manufacturing and related industries. This transformation is enabled by people, processes, services and systems exchanging data in a connected environment [1]. It is driven by the ever-increasing customer demand for individualized products and the necessity for businesses to remain competitive by meeting these demands. Cyber-physical systems (CPS), the Internet of things (IoT), cloud computing and cognitive computing are some of the key drivers of this transformation that is commonly referred to as the Fourth Industrial Revolution [2], or Industry 4.0.

    In 2011, the German strategic initiative “Industrie 4.0”, was started to establish Germany as a leader in advanced manufacturing solutions. It was created to support a shift to decentralized and smart production, where systems are capable of managing industrial production process by independently exchanging and responding to information [3].

    A Historical Perspective – The First Three Industrial Revolutions

    The First Industrial Revolution began in the latter half of the 18th century. Over the next 75 years skilled artisans who crafted products by hand were replaced by workers who manufactured products with the assistance of water or steam powered machinery. Starting mainly in the textile industry, the First Industrial Revolution extended into other areas like transportation and communication.

    The phase of rapid industrialization in the final third of the 19th century and the beginning of the 20th century, is referred to as the Second Industrial Revolution. Like the first, it was characterized by new technologies such as electrification. Additionally, breakthroughs in organization and management – innovations like assembly lines and interchangeable parts - made mass production possible during this time. Taylor’s “Principles of Scientific Management” were applied to organize the labor of humans and machines, as well as to increase the productivity of the industrial workforce through training.

    The Third Industrial Revolution, or the Digital Revolution, started in the latter half of the 20th century. Digital computers and the Internet brought about far reaching changes in communication technology. In manufacturing, automation with Computer Numeric Control (CNC) machines, robots, and Programmable Logic Controllers (PLCs), significantly improved quality, reliability, and productivity.

    The Fourth Industrial Revolution

    Each of the past industrial revolutions was made possible by the convergence of multiple new technologies. Today, emerging technologies, like Cyber Physical Systems (CPS), Big Data and Analytics, Computer Modeling, Cloud Computing, and Mathematical Optimization are being synergized to produce large gains in efficiency, flexibility, and reliability. It is very likely that the Fourth Industrial Revolution is already under way.

    Large amounts of data related to industrial operations are being collected using sensors. This data allows us to precisely determine the current state of operations, as well as to accurately archive historical performance. This real-time and historic information is used for analysis and decision support. Using Big Data, Analytics, and actuators, the autonomy of control and execution systems can be increased, thereby reducing human intervention, decreasing response time, and mistakes, while on the other hand increasing flexibility, reliability, and accuracy.

    Complex digital models of industrial machines and man-machine systems running industrial processes are being built using advanced computer modeling software. These digital models are used for simulation and analysis. They help us to gain better understanding and insight into the behavior of the actual physical systems. The digital model, known as the “Digital Twin”, can be continuously updated with data captured from multiple sources to represent the near real-time status of the actual physical system [4]. Using artificial intelligence, machine learning, and analytics, the Digital Twin can learn from its own historical data, other similar systems, or from human experts. CPS integrate the dynamics of the physical processes with those of the software and network. They provide abstractions, modeling, design, and analysis techniques for the integrated whole [5].

    Industry 4.0, Digital Twin, Cyber-Physical Systems and Smart Factory are closely linked concepts and have much in common. They originated over the last 10 to 15 years in different organizations who were conducting investigation, research, and development efforts. They were looking for ways to meet the industrial demand by bridging technological gaps and building valuable new connections. Like the Second Industrial Revolution, the Fourth Industrial Revolution has a strong focus on synergizing emerging technologies.

    Technologies Supporting Industry 4.0

    The on-going transformation leverages various technologies to bring about a convergence of Information Technology and Operational Technology. The goal is to build connected, decentralized, and self-optimizing “smart” systems [1]. Several technologies are key to realizing the Factory of the Future. Some of them, like CPS, Big Data and Analytics, The Cloud, IoT, and Computer Modeling have already been mentioned above. Following are some other important technologies that are supporting the Fourth Industrial Revolution: [6]

    Autonomous Robots, Vehicles, and Machines

    Robots, vehicles, and machines learn from interactions they have with humans and other machines. They use this acquired knowledge base to perform more and more complex operations with increasing autonomy.


    Simulations, using real-time data to mirror the physical world, are available to test and validate different scenarios in a virtual model.

    Horizontal and Vertical Integration

    Companies, departments, and machines, which earlier were separated into isolated ‘silos’, are now becoming more cohesive and enabling automated value chains. The integration is both horizontal, across the various production and business processes, as well as vertical, across various levels (i.e. Enterprise, Work Centers, Stations, Devices and Products).


    As industrial systems become more and more digitally connected, they will require an increasingly sophisticated level of protection from cyber threats.

    Additive manufacturing

    Additive manufacturing methods are used to produce small batches of customized products and offers construction advantages, such as complex, lightweight designs.

    Augmented reality

    Augmented reality-based systems provide workers with real-time information to improve decision making, simplify work procedures, and enhance safety.

    Design Principles of Industry 4.0

    Industry 4.0 refers to the intelligent networking of machines and processes for industry with the help of information and communication technology. The Industry 4.0 principles that guide the development and implementation of solutions include [7]:


    The ability of CPS and people to communicate with each other through the IoT.


    The ability of virtual models to use real time sensor data.

    Service orientation / Technical assistance

    The services of CPS and humans are available as a service and can be utilized by other entities. This includes ability of systems & CPS to support humans in decision making and physically support humans in conducting unpleasant, exhausting, or unsafe tasks.


    The ability of CPS to make certain decisions and to perform tasks autonomously. Other decisions are delegated to higher level CPS or human systems.

    Real-time capability

    Data needs to be collected in real time. It must be analyzed and optimal decisions are necessary in ‘near-real-time’.


    This provides the flexibility to adapt to changing requirements by adding, removing or replacing individual modules.

    Benefits of Industry 4.0

    These concepts and technologies are evolving in response to the customer demands. While satisfying these demands is by itself the biggest benefit of Industry 4.0, there are many other cascading benefits to the entire supply chain like:

    Enhanced productivity through automation

    Automation reduces errors and delays, speeds up production, and reduces waste. It improves the reliability of the output, which benefits the immediate neighbors in the supply chain.

    Optimization in a digital supply chain

    By connecting Cyber-physical systems and sharing information, optimization can be carried out across multiple entities in the supply chain, extending the optimization from a local level to a global level. Optimization enables the best possible combination of operation, tools, and parameter settings, for the given conditions and constraints.

    Real time data for prediction and optimization

    Data analytics is used to predict machine and system behavior. This enables prevention and/or preparation for critical events before they occur, allowing organizations to run more efficiently.

    Data and analytics for optimization

    Currently, the optimal utilization of resources and materials is achieved by planning offline. The plan is rendered sub-optimal due to changing real-world conditions during execution. With real time data and analytics, the plan can be optimized for near real time conditions.

    Safer working and sustainable work environment

    Real-time monitoring of working conditions allows prediction, quick detection and enhanced protection. Remote operational control provides enhanced ergonomics and a safer work environment.

    Planning and Scheduling - A Vital Industry 4.0 Component

    One key goal of Industry 4.0 initiatives in the manufacturing industries, is to better solve what to make, when to make, and where to make decisions on a global scale. This is the function of the Planning and Scheduling (P&S) system and without it, the supply chain will be far from optimal.

    The new generation of P&S Systems, Planning and Scheduling 4.0 are revolutionary in their ability to couple real-time data, in the form of orders, forecasts, inventories, and resource status updates, with analytics to determine the workload and material imbalances that exist across the entire supply chain in near real time. It is possible to accurately determine when any given plan or schedule, including the currently running one, requires optimization to avoid bottlenecks and take advantage of available capacity.

    Solutions, like the Optessa MLS V7+ , represent the next generation of P&S systems and are key enablers of Industry 4.0 initiatives in manufacturing.


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    [5] "Cyber-Physical Systems," Ptolemy Project, UC Berkeley EECS Dept., [Online]. Available: https://ptolemy.berkeley.edu/projects/cps/. [Accessed 20 July 2018].
    [6] "Embracing Industry 4.0—and Rediscovering Growth," The Boston Consulting Group, 2018. [Online]. Available: https://www.bcg.com/capabilities/operations/embracing-industry-4.0-rediscovering-growth.aspx. [Accessed 20 July 2018].
    [7] R. Burke, A. Mussomeli, S. Laaper, M. Hartigan and B. Sniderman, "The smart factory, Responsive, adaptive, connected manufacturing," 31 August 2017. [Online]. Available: https://www2.deloitte.com/insights/us/en/focus/industry-4-0/smart-factory-connected-manufacturing.html.
    [8] J. Hunter, "Optimize the Overall System Not the Individual Components," The W. Edwards Deming Institute Blog, 8 November 2016. [Online]. Available: https://blog.deming.org/2016/11/optimize-the-overall-system-not-the-individual-components/. [Accessed 19 July 2018].