Industry 4.0: What businesses need to know

The vast majority of individuals will have heard of the Industrial Revolution. The adoption of new manufacturing techniques, including steam power and innovative machinery, in the late eighteenth century had a major impact on employment, economic output and living standards.

Perhaps less well known, is the idea that there have been two subsequent industrial revolutions. The Second Industrial Revolution is generally considered to have occurred between 1870 and the First World War and was marked by large-scale iron and steel production. The Third Industrial Revolution occurred much more recently, at some point between the late 1950s and 1970s, and concerns the adoption of digital technologies including mobile phones, computers and the Internet. And now, we stand on the cusp of the Fourth Industrial Revolution, also known as Industry 4.0.

Businesses, of course, are keeping a close eye on Industry 4.0 and what it could mean for their particular way of working. Previous industrial revolutions brought huge opportunity, but also a great number of challenges. With each new innovation, organisations have the potential to grow and flourish, but they also stand to fail if they cannot manage and incorporate new industry practices.

The Internet of Things

In order for businesses to prepare for Industry 4.0, they first need to understand the technological driving forces behind it, including the Internet of Things. Although mainstream examples of IoT devices are relatively limited at the moment, in the future connected objects are expected to revolutionise a whole host of business sectors. In the same way that new manufacturing processes brought about huge upheaval during the Industrial Revolution, the Internet of Things is also predicted to bring wholesale changes to industry.

“The Industrial Internet of Things (IIoT) has been described as a crucial step in the Fourth Industrial Revolution or Industry 4.0,” explains Martyn Williams, managing director of industrial automation software expert, COPA-DATA UK. “Using IoT technology, organisations are developing smarter infrastructures and building connected networks across entire manufacturing processes.”

Some of the key changes predicted to emerge as the Internet of Things is adopted by industrial firms include the following:

  • Real-time visibility – The use of shop floor sensors and smart machinery will give managers greater visibility than ever before. This will provide them with real-time monitoring that lets them know which parts of their operation is underperforming. As well as informing them where greater efficiencies can be achieved, Industry 4.0 will help businesses identify potential problems before they occur. Rather than arbitrarily deciding when equipment needs to be replaced, connected sensors can highlight problem areas so organisations can replace their industrial equipment at the optimum time.
  • Connectivity – Industry 4.0 promises to break down workplace silos no matter how large your organisation is. The added connectivity provided by the Internet of Things will connect machines to one another and therefore, enable managers to get a holistic view of their industrial output.
  • Data Perhaps just as important as the physical devices themselves, the Internet of Things will also provide huge quantities of data. When analysed, this information could help companies make practical decision in real-time, create new business models and identify additional revenue streams.
  • Automation – Industry 4.0 and the proliferation of smart devices will also lead to further automation, which will enable business to maximise their productivity levels. However, industrial automation may also deliver a safer working environment, with machines able to self-monitor and identify any potential risks.

Industry 4.0 isn’t only being driven by the Internet of Things, however. Machine learning, artificial intelligence and big data analytics are all expected to contribute towards significant industry change. In addition, cloud computing will continue to play a vital role, ensuring that industries can access and store their information remotely. The development of network technology is also crucial for Industry 4.0 as any insights and efficiencies generated by IoT devices are only useful if they can be easily and quickly accessed.


However, if businesses want to ensure that they benefit from Industry 4.0 they must be prepared to overcome some significant challenges. Firstly, security issues will arise as more and more devices becomes connected to the Internet. Every new access point is another potential vulnerability, so organisations must ensure that their security systems are suitably robust before adopting the Internet of Things. Security regulations will also have to adjust to Industry 4.0, particularly given the amount of sensitive information that could soon be accessed over a network connection.

As well as security, network reliability will also provide a stern challenge for businesses. The productivity advantages of Industry 4.0 can only be realised if machine-to-machine (M2M) communication is fast and reliable. The added number of connected devices will place increased strain on organisations’ network infrastructure and also push national governments into ensuring their Internet speeds are up to scratch.

As well as technical issues, challenges of a human nature also exist around Industry 4.0. Businesses will need to ensure that their members of staff have the necessary skills required to cope with new technologies and ways of working. Moreover, getting employees to embrace the Internet of Things, or Industry 4.0, may be a challenge, as it is sometimes associated with widespread disruption and mass redundancies. In reality, if businesses invest in re-training programmes and staff show a willingness to embrace change, Industry 4.0 is likely to be a net creator of jobs, but businesses may still find that Industry 4.0 is met with some resistance.

For businesses looking at Industry 4.0 with some trepidation, it is important to remember that every major industrial overhaul has been accompanied by both successes and failures. Instead of fearing Industry 4.0, businesses must embrace the coming change, having first undertaken the necessary planning and preparation. Be transparent with your employees and customers about the likely effects and possible disruption that could occur, because after all, the Fourth Industrial Revolution will see the merging of the real and the virtual worlds and could make an even bigger impact than the previous three.

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