What is Industry 4.0 and How Does it Work? The Beginner Guide.


Here’s a comprehensive introduction to what industry 4.0 is, the development history of industry 4.0, the changes it will bring to our manufacturing industry, the advantages of work 4.0, the challenges it will encounter, and the world’s top industry 4.0 companies. Finally, I’ll answer some FAQs. You will have a more complete understanding through this article.

What does Industry 4.0 refer to?

What does Industry 4.0 refer to?

The so-called Industry 4.0 is a division of the different stages of industrial development. Industry 1.0 is the age of the steam engine, industry 2.0 is the age of electrification, industry 3.0 is the age of information technology, and industry 4.0 is the age of using information technology to promote industrial change, that is, the age of intelligence.

In 2013, this concept first appeared in Germany and was officially launched at Hannover Messe. Its core purpose is to promote the competitiveness of German industry and takes the lead in the new round of the industrial revolution.

Subsequently, it was included by the German government as one of the ten future projects proposed in the German 2020 High Technology Strategy. The project aims to improve the intelligence level of the manufacturing industry and establish smart factories with resource efficiency, adaptability, and genetic engineering. The Internet of things and network entity system composes of its technical foundation.

The history of industry 4.0

The history of industry 4.0

History line

The concept of Industry 4.0 come up in Germany in 2011. The “Industry 4.0” working group has been formed by experts from small and medium-sized enterprises, relevant German industry associations, the government, research institutions, and universities, and has further carried out research on relevant industrialization in Germany and around the world since then. The working group submitted its final report “Securing the Future of German Manufacturing in April 2013: Recommendations for the implementation of the” Industry 4.0 “strategy to the German Federal Government. Moreover, industry 4.0 is included in the ten future projects in the “High Technology Strategy 2020” subsequently launched by the German Federal Government, thus making industry 4.0 important in the national strategy.

The basic idea

Industry 4.0 is Germany’s first major attempt to introduce its innovative ideas in the field of high technology to the world. “Industry 4.0” is anticipated to increase Germany’s output value in chemical, industrial manufacturing, agriculture, automobile, and IT by 78.7 billion euros, and increase Germany’s overall output value by 267 billion euros by 2025. By around 2030, German productivity is expected to rise by a further 30 to 300 percent.

The idea is to link virtual and physical spaces in so-called “network-physical production systems” to take advantage of digital advances to build the next generation of factories. Germany thinks highly of ensuring the quality of personalized products so as to pursue the combination of personalized products and high added value on the basis of more efficient production.

Strategic intent

Germany desperately needs to automate production through intelligent technology on the one hand. It is a must to shift to productive services like warehousing and transportation, market analysis and marketing, energy storage, and product testing, to maintain high-quality production. 

Germany is hoping that new technology can empower traditional industries to compete for the dominance of a new global “Internet era”. The limits of Germany’s own economic size have left it significantly behind China and the US in the Internet age. E-commerce, IT, social networks, search engines, and a whole set of business model innovations based on the Internet were first conceived in the United States. Germany can only give full play to its technological advantages in the manufacturing industry and focus on the development of the industrial Internet and household Internet of Things. Since the 2008 financial crisis, the market demand in developed countries has been weak. On the supply side, China and other emerging economies, relying on the huge domestic market, are constantly upgrading and iterating new technologies of products.

Advantages/benefits of Industry 4.0

Advantages/benefits of Industry 4.0

The characteristics of Industry 4.0 are very clear, namely, the transformation of the manufacturing industry to intelligence through the combination of information communication technology and cyberspace virtual Systems. Under this change, the theme of “intelligent manufacturing”, “intelligent production” and “intelligent logistics” in Industry 4.0 will make enterprises highly automated, highly informative, and highly networked, which is bound to greatly enhance the attention of enterprises to equipment but also put forward new requirements for equipment management in industry 4.0 environment.

Industry 4.0 brings triple convenience

Industry 4.0 will have a huge impact on equipment management. After the vertical integration and end-to-end integration of the factory are completed through the Internet, the equipment of the whole factory or even several factories will form an interconnected network, and the system will automatically pull all personnel to carry out equipment maintenance. Managers can carry out production planning and configuration according to the real-time status of all the equipment, the maintenance experience and fault information of the equipment can be more fully shared and communicated, and the spare parts of the equipment can be better coordinated managed and used, which will greatly improve the use efficiency and fast response speed of the equipment. Specifically, mainly reflected in the following threefold “convenience”.

The device management organization is flatter, and the organization information is more shared

For the technology and network-oriented industry 4.0 industry transformation, the first possible break is the current organizational structure of equipment management.

It also does a lousy job of motivating people on the ground. However, in many enterprises that implement lean production, total productive maintenance (TPM) based methods of equipment management system partially made up for the shortcomings of the linear unity form, it in a straight line outside increased a lot of matrix organizational structure system of unity from the activities of the group to solve the problem, members from different departments in team activities on a regular basis and communication, increased the transmission of information, Greatly improved information sharing between levels. However, in this way, managers and grassroots staff are still in a results-oriented and bottom-up reporting process, while the activity group is relatively passive in the process of getting information from senior managers.

The issue of information sharing comes naturally in industry 4.0 enterprises, where information collection and analysis can be obtained directly from work terminals (devices) through the Internet of things. As long as the relevant permission is opened, all information can be obtained through the search terminal in the database. In a unified system, all data does not need to be repeatedly collected, just called and computed continuously. For example, in the production site, the data on equipment comprehensive efficiency (OEE) is originally needed to collect the actual downtime of the planned production process of the equipment, the production tempo of each part, the number of parts produced, and the number of qualified products in a period of time. Generally, these data may come from different systems of different functional departments, but in the era of 4.0, which is highly informationized and networked, all information can be obtained in real-time from equipment (matter equals information in an intelligent factory), and the feedback results can be calculated in real-time.

Due to the convenience of information and networking, a lot of processes and work will be realized by computers. With the high degree of automation, the original labor-intensive production form in the factory has gradually changed to the capital and technology-intensive form, and this change has become more and more obvious in the more developed coastal areas of China, while gradually spreading to the central and western regions. With the help of efficient information processing and intelligent decision-making, the scope of management for all will be greatly increased. This change will make the management structure become flattered while the information of the organization becomes more fully shared.

The equipment management process has changed dramatically and the execution has become more standardized

With the improvement of factory information and network, as well as the automation degree of equipment, the process of the equipment management system will change greatly. Many of the points of work that were previously performed by humans in the process will be replaced by equipment, and the scenario where bankers were replaced by computers and ATMs a few years ago will also occur more frequently in factories.

Industry 4.0 is beneficial to the establishment of equipment management systems. Sufficient and effective data can provide the basis for decision-makers at the early stage of system formulation, and an effective analysis system will greatly improve the efficiency and effect of system formulation. For example, to improve the comprehensive efficiency of equipment, the system can help decision-makers automatically collect relevant data according to the set parameters, and find the key factors affecting the comprehensive efficiency of the data, so as to study and solve problems more efficiently and pertinently.

This change is positive for the implementation of the equipment management system, and the original implementation process with more human factors will become more standard and strict. The system only needs to set procedures in accordance with the system and process, and when the conditions are met, they will be strictly implemented, which also makes the procedures clear. For example, equipment failure reporting systems, and process documentation requires different levels of response after different downtime periods. Under the condition of insufficient informationization, the untimely transmission of information and artificial cover-up cause buck-passing and untimely response.

However, in the factories of Industry 4.0, the system will automatically send information to different managers at different points in time: once the equipment fails, the system will immediately notify the team leader; if the equipment fails to recover within 15 minutes, the system will automatically alert the maintenance personnel to repair it; if the equipment fails to repair after 1 hour, the system will upgrade to the workshop director. Throughout the whole process, the equipment will automatically issue guidance and alarm in strict accordance with the set maintenance plan to remind relevant implementers to complete the task. In the implementation process led by the system, no excuses will be given to any implementers, and all personnel will be pulled into a strict standardized working state.

Material is data, equipment maintenance is more convenient

Industry 4.0 emphasizes that material is data. Technically, no matter whether a complete set of equipment or a component of the equipment, it can theoretically provide relevant information to the system. The data collected in advance can be used to warn of potential failures, rather than having to deal with near-failures or disruptive phenomena. For example: determine whether the bearing is damaged by the vibration frequency and original data of the bearing. When the frequency change is found, the bearing is often in a period of rapid damage, which has a great impact on the efficiency of the equipment. While the intelligent bearing under industry 4.0 can increase the corresponding sensor in the raw material and bearing grease. When the stress of the raw material of the bearing changes to a certain extent or the concentration of metal fragments in the bearing grease reaches a certain value, the maintenance or repair information is sent through the system, so that the time of preparation and maintenance is greatly advanced.
Challenges of Industry 4.0.

Challenges of Industry 4.0

Challenges of Industry 4.0

Although Germany put forward the concept and vision of Industry 4.0 as early as 2011, the results after 10 years did not reach their expected goals. In October 2019, a number of think tanks, including DIW Berlin, Ifo, IfW Kiel, RWI and IWH, jointly published a report entitled “The German Economy Is Facing Stagnation, The report, which cited a rapid deterioration in the manufacturing sector in Germany, Europe’s largest economy, as the main cause of the eurozone’s decline.

Small and medium-sized enterprises have the biggest difficulty in accepting industry 4.0

The German government released the German AI Development Strategy to promote the development and application of artificial intelligence products and industrial transformation in the whole field in 2018. German Economy and Energy Minister Altmeier also said that the goal of the policy is to achieve full coverage of industry 4.0 technology. By contrast, more consistent use of Industry 4.0 by SMEs could add another 0.3% to Germany’s GDP growth.

On the other hand, industry 4.0 data security concerns become the biggest “neck” link. In this ecosystem, enterprises should not only have a new system dependence but also have new forms of attack means, which makes information security exposed a huge weakness. Limited by technical and financial problems, small and medium-sized enterprises are more likely to have data leakage, which can not be remedied once leaked. Network insecurity can also cause intellectual property leakage. More enterprises estimate the risks that digitalization may bring too low. Many companies are not willing to fully exploit big data as they feel the data they generated can’t be secured.

Lack of professional talent is the biggest drawback

30% of German companies have doubled their demand for talent in industry 4.0. in 2019. Actually, Bazhou announced to allocate 4 million euros to build 12 “learning factories 4.0” in vocational and technical schools to cope with the changing labor demand of digital transformation as early April 2015. The aim is to increase research spending to 3.5 percent of GDP by 2025, with a focus on producing the IT talent and skilled network engineers needed for the future.

The global promotion of “industry 4.0” is getting more prominent

There are significant differences in industrial Internet reference architectures in various countries, and the heterogeneous tendency of “Industry 4.0” is becoming more and more obvious in the process of global promotion.

First, the focus on name expression and development is not the same. Japan is called the “Internet industry”, in China, “industrial Internet” and “smart manufacturing” are used, and the United States is called “industrial Internet”. The difference in the name shows that each country wants to establish its own industrial Internet standards, so as to promote the global promotion of its own intelligent manufacturing technology, system solutions, and equipment while strengthening its own industrial advantages. Meanwhile, there are many differences in the emphasis of the reference architecture of the industrial Internet in major industrial countries, which reflects the differences in the conditions and goals of industrial and manufacturing development in different countries. Germany’s “Industry 4.0” reference architecture emphasizes equipment; Japan’s industrial value chain reference framework emphasizes connectivity; China emphasizes the deep integration of the new generation of information technology and the manufacturing industry.

Second, in this field, different countries have different benefits. The development level of different enterprises and different regions is very uneven, and the differences in industrial conditions, development concepts, and advantages determine that several countries have their own features in this field.

Third, Germany’s economic size does not have a great benefit in the implementation of “Industry 4.0” in globalization. For example, China’s economic size is too different from Germany’s, and China’s development path determines that it is impossible to “copy” Germany’s experience. Industry 4.0 is a concept proposed by the national conditions of Germany. On the one hand, Germany has been based on the manufacturing industry for a long time. On the other hand, Germany is a small country with a short and single industrial chain. China and the US are huge single economies, so we need to think about the operation of the whole economy. At present, the generation gap of China’s industrial grade is large, and some industries have reached the level of developed countries, but there are also great problems in comprehensively promoting industry 4.0.

How will Industry 4.0 change manufacturing?

How will Industry 4.0 change manufacturing?

In 2025, the augmented reality market and global virtual reality will reach $80 billion. Application scenarios are medical, real estate, engineering, and other heavy asset industries will be essential. Many people probably first regard the Pokemon AR game that took the world by storm overnight when it comes to augmented reality. Actually, whether augmented reality or mixed reality, these technologies have also been applied in the field of industrial manufacturing.

1. Industrial design

The traditional industrial design stage consists of 5 primary steps: understanding customer requirements, transforming requirements into technology inputs, offering multiple solutions, selecting feasible solutions acceptable to customers and transferring the confirmed solutions to the manufacturing team. In another word, this traditional design process requires a lot of effort and time to determine the best viable product for the client company. The integration of augmented reality into the development and design stage can simplify the traditionally tedious process, and improve the interaction with customers.

Engineers can see the structural information inside the car, as well as 3D graphics of certain parts, and adjust them. It can also communicate quickly with sales teams and designers, completely understand consumer demand preferences, and enhance the speed of new car R&D development.

2. Assembly and Manufacturing

Many links also need the manual operation of workers in the industrial production process. The assembly cycle time depends on the skill of the operator, especially in aircraft, cars, and other complex large mechanical equipment. For example, an aircraft has a large and complex number of electronic circuits, and assembly engineers must follow a functional manual in a wiring harness assembly with thousands of wires, a time-consuming and time-critical process. Aircraft manufacturer Boeing uses AR glasses to simplify the assembly process of Google, through the APX Labs developed applications, engineers can AR lenses QR code scanning the scene of the assembly components, the components of wiring harness assembly instruction is automatically displayed on the glasses, you just need to according to the instruction steps to complete the assembly workers.

Engineers’ assembly time will be shortened by 25% and the error rate will be reduced by 50% as per the statistics. Lockheed Martin, America’s biggest maker of military aircraft, is also trying to incorporate AR into its aircraft manufacturing process. The company is able to make it easier for the production staff to know the operation process and the number of parts, thus enabling rapid and accurate assembly production with the help of Epson Moverio’s AR glasses. When installing landing gear components, engineers can use the installation manual and procedure displayed on AR glasses to learn about cables, bolts, installation positions, and serial numbers.

3. Quality inspection

Quality inspection is an essential step to ensure that products meet all requirements. Traditional production requires extensive checklists of checkpoints to complete, and quality inspectors are responsible for the final product’s delivery. Hence, the quality of the products received by customers will be affected by the product quality control and accuracy of the quality inspection process. AR technology can view detailed information such as tolerance, dimensional accuracy, and surface finish displayed in real-time, making it much easy for QC personnel to perform complex tasks.

Magna help inspects parts and cars for potential defects using Microsoft HoloLens. The AR glasses display information about the parts to be inspected and guide the inspector through the inspection when a hololens wearing inspector looks at the car.

Augmented reality was used by technicians as a tool for quality assurance processes at Porsche’s assembly plant in Leipzig, Germany. QC personnel use AR devices to take photos of the problem parts of the car, and then automatically load the exact size of the part. A lot of time is saved for quality inspectors.

The mixed reality application MiRA is used by Airbus to integrate digital models during production. Mixed reality technology has been adopted on the A350 XWB and A380 production lines to check the integrity of secondary structural supports.

4. Maintenance and after-sales service

Regular maintenance of various equipment is required by every industry needs to make sure the normal operation of daily production, but the related equipment maintenance in the manufacturing industry is far more complex. As they are required to be thoroughly familiar with the function and structure of the equipment and have to refer to hundreds of pages of the service manuals.

Maintenance personnel is allowed to check equipment problems on tablets, and AR glasses through the AR app developed by the company. And the maintenance work can also be completed via the interactive visual operation.

5. Employee training

Companies often invest a lot of money and time in various training activities to enhance the stability and skills of employees. AR technology enables training methods interactive. Breakthrough position limitations and make sure the employees’ safety during training.

Automotive technology provider Bosch has developed an augmented reality app that digitizes employee manuals, training plans, and other content to provide images, animation, text, audio, video, and more. Technicians are able to point the iPad at the dashboard to see everything hidden behind the device with the newly designed app. Technicians are able to easily determine the exact location of various wiring and interact with each component by using sensors. The program generates wiring diagrams and connections, enabling coaches to conduct training exercises on actual vehicles without spending time reassembling and disassembling them.

]JLR has achieved rapid training of new employees with minimal training costs. Augmented reality will bring more changes to manufacturing as the technology matures and costs further fall, as well as integrating with digital twinning, Industrial Internet of Things, 3D printing, predictive analytics, machine learning, and other technologies.

Top industry 4.0 companies

1. Siemens Smart Factory in Amberg, Germany

Siemens AG is a global leader in electronic and electrical engineering established in 1847. On July 19, 2018, Siemens ranked 66th on the Fortune Global 500 list.

In Nuremberg, a small city in eastern Bavaria, there is an unassuming factory, but who would have thought it would be one of the most advanced in Europe and the world?

Top industry 4.0 companies

Let’s take a look at the factory through some data:

24-hour delivery time

One product every one second

The percent of passes is 99.9985%

Manage 3 billion components

About 1200 employees

5 km underground transportation belt for components

Magnetic levitation belt

The factory, production equipment, and computers can handle 75 percent of the work themselves, leaving only a quarter of the work to be done manually

— This is Siemens Amberg Factory!

This is Siemens’ factory of the future, and the most representative of Industry 4.0, Amberg Electronics Manufacturing Plant (German abbreviation: EWA), the world’s first purely digital factory.

Since it was built, the factory’s production area has not expanded and the number of employees has barely changed, yet its capacity has increased eightfold, to one product per second on average. Meanwhile, the qualified rate of product quality is as high as 99.9985%, and no similar factory in the world can match.

2. Bosch Humboldt Factory in Germany

Bosch is one of the German industrial companies engaged in smart transportation technology, smart industrial technology, building technology, energy, and consumer goods. 

Bosch employs over 230,000 people in more than 50 countries and is well known for its system solutions and cutting-edge products.

On July 19, 2018, Bosch Group ranked no. 75 on the Fortune Global 500 list. 

Bosch Humboldt Factory in Germany

As the world’s number one automotive technology supplier, Bosch’s automotive brake systems (ABS&ESP) have considerable strength in the market. The Bosch Humboldt Factory, a representative of Bosch’s smart factories, has a special feature in its production line: all parts have a unique RFID number that automatically “talks” to checkpoints along the way. After each production link, the card reader will automatically read out the relevant information, and feedback to the control center for corresponding processing, so as to improve the whole production efficiency.

An intelligent factory does not simply replace manual operation with machines, but more importantly, it gradually introduces intelligence, information, automation, and other related technologies into the whole process of manufacturing making the production process more transparent, trafficking smart ID cards to each product, and making parts produced in different regions seamlessly.

At the Humboldt Logistics center, workers clip “watch slats” containing product information into a rectangular plastic clip each time a box of parts is pulled out. The clip is attached to the box, and at the bottom of the clip is a radio frequency identification number — the ID of the box of parts. After each production link, the card reader will automatically read out the relevant information, and feedback to the control center for corresponding processing. For example, when a truck pulls it out of the logistics center, the assembly plant 5,000 meters away knows what’s going on: before assembly workers put it on the production line, the logistics center and the supplier know it’s time to restock.

3. Kaiserslautern Plant of BASF Chemical Group

As a German chemical company, Basf is one of the world’s largest chemical factories.

There are over 160 joint ventures and wholly owned subsidiaries operated by Basf in 41 countries in Europe, North and South America, and Asia. The company is headquartered in Ludwigshafen on the Rhine.

On July 19, 2018, BASF ranked 112th on the Fortune Global 500 list.

Kaiserslautern Plant of BASF Chemical Group

Or for the use of radio frequency code, the traditional chemical giant BASF is taking this one step further. The shampoo and hand sanitizer manufactured at BASF’s pilot smart factory in Kaiserslautern are already fully automated. As test orders are placed online, an RFID tag attached to an empty bottle of hand sanitizer on its production line automatically communicates with the machine to tell it what soap, fragrance, cap color, and label it needs.

On an assembly line like this, each bottle of hand sanitizer can be completely different from the next one on the conveyor belt. The experiment relies on a wireless network, where all the communication between the machine and the product is done, and the only human input required is to place a sample order. It is an experiment, but the idea of ordering directly from customers to factories is enough to give the smart factory model another way to develop.

FAQ of Industry 4.0

I. Digitization

Digital is also called, though the concept of the two has a certain distinction, here need for digital old assets refers to the enterprise, production technology to connect the built-in system intelligent production processes and end-to-end digital manufacturing process, the real-time tracking of product quality, reduce the cost of poor quality (COPQ) and implementation based on the customer innovation.

Only by the digitization of enterprises can intelligent manufacturing technologies such as robots and IoT be realized.

2. Upgrading and transforming technologies

In order to realize the upgrading and transformation of industry 4.0, technology also needs to be mastered, especially data analysis and 3D printing. The former is to analyze digital enterprises, and the latter can be combined with CNC machine tools to support the innovation of multi-layer manufacturing.

Once Frost & Sullivan predicted that these technologies would eliminate the traditional operation model, move from reactive maintenance to predictive maintenance (PM), and support new business models. From selling specific goods to selling “performance as a service”.

3. Supply chain operation

For manufacturing, the enterprises will cooperate upstream and downstream, upstream and downstream, forming a supply chain, to maintain the stability of the supply chain operation is also the industrial 4.0 we must pay attention to the problem, once because the Japanese earthquake and tsunami led to electronic market turmoil, intelligent era production efficiency is increased, then the effect will be even more serious problems of the supply chain.

4. Cyber security

As we build industry 4.0 enterprises through digital enterprises and the Internet of things, network security will be a major issue. We must attach importance to network security and protect our own interests. For example, we can set up AN IT/ Operational Technology (OT) CoE to protect IT security.

5. The system

Companies entering the industry after the 4.0, in addition to technology to transform and upgrade the products, also need to reflect on the past enterprise system, a lot of times the system of the traditional enterprise is not suitable for smart companies, because also must reform the system, especially the organization culture, business leaders and the return on investment (ROI) concept are 4.0 industry involves many aspects.

6. Talent cultivation

Talents in Industry 4.0 are no longer assembly-line workers in traditional enterprises and have higher requirements for the skills of operators. Therefore, enterprises also need to pay attention to talent training, and providing a reasonable training mechanism for technical skills suitable for industry 4.0 at the national level will also help China achieve industry 4.0.