Industry 4.0 and transformation – Overview

Introduction: Industry 4.0 and transformation

Industry 4.0 (in other words, advanced manufacturing) brings about a new industrial revolution, the fourth, empowered by disruptive technologies with a deep impact both for production systems and business models. Nevertheless, there is a certain deal of noise and confusion when it comes to defining Industry 4.0, understanding its benefits and establishing the steps that a company must take in order to become digital. We will address all these issues in a series of articles that start with this “Overview”.

What is Industry 4.0?

Frequently, one hears the words “Industry 4.0” in association with the following: collaborative and flexible robotics, 3D printing, big data and analytics, cloud computing, internet of things (IoT), manufacturing execution systems (MES), cybersecurity, virtual and/or augmented reality, simulation, and such. Actually, these are but facilitating technologies that are deployed under particular circumstances.

Thus, Industry 4.0 can be defined as a disruptive evolution of the current industry status that makes use of these facilitating technologies in order to digitise industrial processes. Ultimately, it is about changing design, manufacturing, and operations in such a way that objects, machines, and people make up an interconnected work flow that results in flexible, quick, and efficient production systems able to function on a massive scale and, at the same time, to adapt to each customer’s requirements.

What is Industry 4.0 about?

Industry 4.0 is aimed at transforming, both methodologically and technologically, the production system. As with any other transformation process, one must assess where is the starting point, what is the ultimate goal to be achieved, and where to focus the efforts along the way.


Industry 4.0


When facing the transformation of a production system, the degree of technological maturity of the company dictates the number of phases to be planned and, accordingly, the pace of the change process. The diagram on top  proposes several transformation itineraries and technological-organizational leaps that companies should take. Actually, due to their technological maturity, there are three kinds of companies:

  • 1: companies with basic methodologies that need to get updated and adopt conventional methodologies and technologies in order to increase competitiveness.
  • 2: companies with a consolidated production system that, nevertheless, need to put in place 4.0 technologies in order to increase the value of their products.
  • 3: technology-driven companies looking for the latest 4.0 technologies or even in the business of developing them.

These technological-organisational stages determine several transformation itineraries: itinerary 1-2 (technological update), itinerary 2-3 (adoption of 4.0 technologies), and itinerary 1-3 (accelerated transformation). It must be taken into account that, quite frequently, these disruptive technologies allow SMEs with traditional production systems to employ state-of-the-art technological solutions.