What is Industry 4.0?

When we talk about the Industrial Revolution, we refer to drastic or revolutionary changes in production environments. Historically, such changes have led to a spectacular increase in productivity and a substantial shift in business philosophy and vision.

However, the “Fourth Industrial Revolution” currently taking shape differs from the previous three in one fundamental aspect.

While all inventions and innovations to date have focused on automating individual tasks (either to increase productivity/reduce costs, or to carry out operations impossible for a human being), the underlying concept of Industry 4.0 is the automated, computerized, and “intelligent” interconnection of all subprocesses within the production environment.

In other words, Industry 4.0 projects aim to create complex industrial processes in which all the equipment involved is connected to one another, has the ability to optimize time and resources, and can even make decisions autonomously.

One way to achieve this is by digitizing the production system, equipping machinery and equipment with sensors, and ensuring the entire system can store the data generated, process it, and interpret it.

Advantages and Disadvantages of Industry 4.0

It is worth highlighting the benefits of Industry 4.0:

• Optimization of resources and time, and the resulting cost reduction
• Full control of the production process and the logistics chain. And, quite literally, knowledge is power
• Greater quality control. Continuous monitoring of production variables and/or the final product makes it possible to be more rigorous in quality tracking and to correct issues in real time, avoiding downtime
• Optimizing resources and energy brings considerable environmental benefits, reducing the environmental footprint (and the resulting tax advantages)

On the other hand, like any change, Industry 4.0 entails some disadvantages:

• It is estimated that Industry 4.0 will not reduce jobs and may even increase them. However, the required profiles will change, and those less adaptable could be adversely affected
• The ROI of an Industry 4.0 project may not be as attractive, especially for “pioneering” projects, but it is in the long term
• Industry evolves much faster than legislation, which can be an obstacle when it comes to regulating processes

Technologies in Industry 4.0

The Industry 4.0 concept is supported by a range of technologies. We mention some of them:

• Internet of Things (IoT) – devices and equipment will be able to collect data, store it, process it, and communicate with other devices in the process
• Big data – Enables the analysis of huge volumes of data, the discovery of behavioral patterns, and, ultimately, the transformation of data into actionable knowledge
• 3D printing or additive manufacturing – Enables product customization without increasing the associated cost
• Artificial Intelligence – “Computer brains” process information and learn from it. Learning is used to make predictions and decisions. Learning is continuously reinforced by comparing real feedback with the forecast made

All these technologies contribute, to a greater or lesser extent, to connecting two worlds: the real and the virtual. The information flow shifts from linear to cyclical (or PDP: Physical to Digital to Physical).

This means that data collected in the real world (Physical) is stored in a digital record.

The data is processed with advanced analytics tools (Digital) and transformed into information.

This information is used to control, optimize, and manage the actors involved in the physical world (Physical).

In summary, what does Industry 4.0 bring to the company?

Optimizing time and resources, automating tasks, and the resulting cost reductions enable Western companies to compete with emerging countries, which have much lower levels of automation due to low labor costs.

On the other hand, production costs in emerging countries rise as their cost and quality of life increase. It is already a fact that China is no longer the industrial “paradise” it was just a few years ago. In other words, Industry 4.0 represents an “optimization reserve” to continue reducing costs.

In a dual sense, the debate is no longer about “What does Industry 4.0 bring,” but rather “What does it mean not to join the 4.0 revolution.”

And the answer is clear: as every company takes steps in this direction, investing is no longer an option, but an imperative. Hopefully it will not be too late.

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