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Industry4.0 – Transformation to Digital Business Model

Transformation to Digital Business Model

The term "Industry 4.0" represents the next stage of development in the industry. It's all about intelligent factories, the digitization of analog production processes and communicative networking. There is no lack of groundbreaking visions - Industry 4.0 should not only be limited to production but also penetrate all areas of a company and even society. How important is it for your company to jump on the unstoppable pull of Industry 4.0? What are the important aspects of this revolution and how can it benefit?

What is Industry4.0 ?

Industry 4.0 is intended to make production processes even more modern with the help of information and communication technology. The goal is to create a smart factory that works more efficiently and more organized.

The term 4.0 is still comparatively young. In 2011 the term first came to the public in the context of the CeBIT. Representatives from business, politics, and science presented a concept that should guarantee the competitiveness of German production sites also for the future. In simple terms, it can be summarized as follows: Industrial production must become more digitalized. The technological basis is provided by the integration of intelligent, digitally networked systems, with which plants, logistics, products, and people can communicate directly.

In recent years, the plans have become more concrete. In 2016, they showed what a digitally networked factory could look like. Even today, the most important feature is the digital monitoring of the entire value chain. Thus, Industry 4.0 already starts with the development of products, extending from the production over the sale to the final use by the customer.

Industry4.0 is already in utilization today by many companies. Customers can place orders in online shops and configure their desired products. Finally, all threads come together through a software solution - including order releases, stock levels or real-time data from production. But this is only the beginning. Digital networking will not only create "smart factories" but also change business processes and business models.

Is Industry4.0 the Sign of Automation

In automation, many people think of assembly lines, large plants or robots that take over our jobs. Such state-of-the-art production equipment also plays a role in Industry 4.0, but it needs a new understanding of the term automation. It will find its way into all areas of a company, not just at the concrete production site. It is about self-organizing logistics, self-optimizing production, and versatile product lines. An example: with intelligent sensors and digital networking Products can independently plan their production process and react spontaneously to changes and bottlenecks. The real brain behind such sophisticated automation is the so-called Cyber-Physical Systems (CPS). CPS allows intelligent control processes that bundle, evaluate and forward all incidental data. This approach fundamentally changes the classic automation pyramid with the model of centralized control.

How will Industry4.0 make production efficient?

Industry 4.0 should lead companies successfully into the future. One of the main arguments is the increase in efficiency, which can be improved in many areas. This includes significantly increased work productivity, which can already be achieved with digital production planning. Digital production planning tools are already being used by many companies in the industry today. The next big step is the integration of artificial intelligence and big data to make processes even more agile. The use of resources and energy can also be optimized in the course of digitization. Potential increases in efficiency also affect maintenance and repairs, With Industry 4.0; machine data can be analyzed in real-time, all important data is forwarded directly to responsible employees. If a replacement part is needed, the system communicates this very concretely. Development departments are working on a test basis with augmented and virtual reality technologies of tomorrow, which should support workers during training and maintenance work.

Large companies are already implementing Industry 4.0 technologies in many ways. However, Industry4.0 also offers interesting opportunities for small and medium-sized companies to exploit untapped potential, to increase process efficiencies and to develop suitable business models.  Industry 4.0 wants to bring customers and suppliers closer together, to the benefit of all concerned. One solution should be the combination of supply chain monitoring and more transparency for customers.  

Conclusion to Industry4.0

In the age of Industry 4.0, traditional value chains are a thing of the past. At present, businesses need to rethink and adapt to both new technologies and rethink their business models. How do you pave the way to the digital world, which software tools and virtual recording systems are needed, how should digital production be structured? There are no general answers to these questions, but only individual solutions that are explored and driven forward with strategic planning.

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