Industry 4.0: The Complete Guide

Apr 06, 2021
3d Signals

Industry 4.0 is the name for the digital transformation and automation of traditional manufacturing industries. Also known as ‘the fourth industry revolution’ or ‘smart manufacturing’, industry 4.0 entails digitizing devices and machines with IoT in order to make traditional processes smarter and autonomous. These include industries like construction, food & beverage, aerospace, and automotive.

Industry 4.0 increases productivity, reduces costs and improves international competitiveness. Read on to learn more about industry 4.0, the technologies it introduces in order to transform traditional factories into smart factories and its benefits and challenges for production lines.

What is Industry 4.0?

Industry 4.0 is the optimization of traditional manufacturing industries through IoT and additional technologies. These new technological capabilities enable digital transformation and automation of production floors. The result is an optimized, data-driven production environment.

The driving factor behind industry 4.0 is data generated through connectivity. Industry 4.0 technologies harvest and ingest data from the shop floor across business systems and machines. IoT, cloud computing, data lakes and more computing technologies are utilized. As a result, traditional manufacturing industries can improve through data-driven business process optimization. They become more efficient and flexible and can ensure higher quality products at a lower cost.

Industry 4.0 is the successor of three successful industrial revolutions. The first industrial revolution (~1760) was the result of the invention of the steam engine, enabling the transformation from manual production to machines. The second revolution (~1870), dubbed the Technological Revolution, was marked by technological improvements such as electricity and railroads. The third revolution (~1960s), the computerization, was marked by leveraging computer systems for mass production and automation. Now, we’re seeing the fourth revolution, enabled by data and IoT.

Industry 4.0 is an idea and a strategic initiative led by the German government and the German industry since 2011. Germany’s economy is heavily reliant on traditional industries like machinery, electronics, automotive and pharmaceuticals. To remain internationally competitive, Germany is implementing industry 4.0 technologies in its factories and promoting manufacturing digitalization. Industry 4.0 in Germany is also associated with the term ‘Work 4.0’, which is a conceptual framework for discussing the future of work.

Now let’s see which technologies industry 4.0 offers smart manufacturing lines:

12 Industry 4.0 Technologies

There are twelve main industrial technologies and trends that are taken into consideration for industry 4.0.

1. Additive Manufacturing

3d printing and digital manufacturing for creating lighter and stronger parts and systems. Additive manufacturing enables speed and customization. Factories can create the parts they need, when they need them, and exactly how they need them.

2. Advanced Robotics

Autonomous, advanced robots that will work side by side with humans. Robots allow new forms of collaboration, speed and efficiency. They also cut costs and improve worker safety.

3. Augmented Reality

AR technologies that can be used for tracking robots, maintenance, assembly and repair, training, quality control, monitoring building processes and auditing facilities. Through AR, companies can reduce errors, improve safety, save time and cut costs.

4. Big Data and Analytics

The collection and analysis of data from various sources, including traditional machines, sensors, CRMs, ERPs, and more. In most cases, industry 4.0 solutions enable manufacturers to generate data that can be gathered in a systematic manner from parts of the supply chain for the first time. Big data analysis enables managers to make data-driven decisions, which lead to optimization and increased productivity.

5. Cloud

Implementing cloud-computing technologies for storing, managing and sharing data. The cloud enables scalability and collaboration, and is essential for the growing amount of data produced by smart factories.

6. Cybersecurity

Securing communications between machines, devices and industrial systems, especially devices that are connected for the first time. Cybersecurity is required for confidentiality, privacy and preventing data breaches that could put the whole factory at risk.

7. Horizontal and Vertical System Integration

The data integration of all departments, teams, functions, floors and components across the entire value-chain. Integration is essential for end-to-end monitoring, building a single source of truth for decision making and resource allocation and collaboration for lean manufacturing. This is also one of the biggest challenges of industry 4.0.

8. Simulation / digital twins

Virtual copies of real processes with real data. Simulation is used for testing and optimization before decision-making. Enables error-rate reduction, cutting costs and optimization.

9. Sensors

Sensors connected to machines enable measuring performance, equipment and environments. Factories can use them for gathering data from their shop floors. This data can be used for monitoring, predictive maintenance, process optimization, improving machine availability, and analysis.

10. AI (Artificial Intelligence)

The optimization of all tools, technologies and processes through smart machine algorithms. This technology can be used to improve any industry 4.0 solution, including monitoring, maintenance, robotics and operational management.

11. ML (Machine Learning)

A subset of AI, ML is used to optimize manufacturing processes based on data collection. These include computing models and algorithms used for operational excellence.

12. Industrial IoT

The digitalization of all industrial devices and machines, even older machines with no built-in controllers. IIoT enables real-time collaboration, data gathering and optimization. It is the basis that allows generating data for most other industry 4.0 technologies.

(Learn how to digitalize your machines with 3d Signals in a few hours, with a non-invasive solution to enable and drive industry 4.0 adoption. Request a demo to learn more)

3d Signals – Welcome to the Factory of the Future

Industry 4.0 Benefits for Manufacturers

Industry 4.0 has many benefits for factories, from food production to automotive suppliers. These include:

Productivity and Efficiency

The main benefit of industry 4.0 and smart factories is to enable industries to increase productivity and improve efficiency. How? Industry 4.0 allows manufacturers to collect data and leverage it to improve business KPIs. These processes can be used for smarter, data-driven decision-making, identifying bottlenecks and optimizing resource allocation. As a result, barriers are removed to enable higher machine availability, performance and production quality.

Cutting Costs

The outcome of the improved productivity and efficiency will be reduced costs and more profits. Through better resource allocation, quicker manufacturing, less downtime, improved quality and less product waste, costs will go down. In addition, predictive and preventive maintenance enable caring for the machines and reducing wear and tear that increase deprecation. So, while industry 4.0 requires an initial investment in technologies, the ROI is significant.

Traceability & Visibility

Connecting all machines and devices enables gathering data from them and tracking their performance and output in a transparent manner. With this information, managers can better monitor and control operations to optimize production processes, improve product quality, and set and monitor KPIs. In addition, the data can be used to comply with regulations more easily.

Agility & Innovation

Industry 4.0 enables gaining more visibility into the production floor, understanding where the bottlenecks are, introducing scalability technologies and collaboration on processes. This provides manufacturers with the flexibility and agility to reorganize their resource allocation and introduce new methods and ideas.


Reducing costs and increasing product quality enable manufacturers to remain competitive without reducing wages or outsourcing to low-wage countries.

Industry 4.0 Challenges

Despite all these benefits, industry 4.0 also presents some challenges:

Initial Investment Costs

While industry 4.0 does provide a beneficial ROI, it also requires an investment, which not all companies might be able to carry. These include investing in technologies, training, and machinery, as well as the costs of adapting business models.

Privacy & Security Risks

Communication between devices (D2D – Device to Device) and machines (M2M – Machine to Machine) include sharing of personal data. Data breaches to the factory or the third party supplier could expose this data to adversaries and compromise privacy of PII (Personal Identifiable Information).

In addition, the new IoT connectivity expands the attack surface and increases factory vulnerability. These two issues require governmental regulations and new cybersecurity technologies.

Training the Workforce

Operating a traditional device requires different skills than operating a traditional device that is connected to a computer. Managing a traditional industrial floor is different from managing a data-driven, automated industrial floor. Industry 4.0 introduces new technologies and abilities that require a shift in the workforce mindset and in their capabilities. Therefore, companies need to train their workforce and introduce a new company culture. This takes time, effort and resources.

Technological Dependence

While the industry 4.0 technology provides freedom for older processes, companies will still be limited by existing technologies and their operators. For example, connected devices and machines mean that factories rely on IT teams. The large amounts of data that companies need to analyze mean they will rely on AI algorithms and data scientists. These technologies are still evolving as the concept of industry 4.0 materializes. Therefore, not all of today’s modern factory challenges can be answered by industry 4.0.


Connecting various systems and machines to the same business process requires standardization and technologies that are not always available.

Getting Started with Industry 4.0

Transitioning to industry 4.0 is not always easy. It requires an initial financial investment, the right technological solutions, workforce training, and trust in the process in order to harvest and utilize data.

One easy way to get started is by implementing a universal, non-intrusive technology.

3d Signals provides a non-invasive IoT solution that is easy to set up on (not in) your machines and collects data that you can gain immediate insights from. Increase machine availability and productivity immediately, and view real-time data that will help you optimize your manufacturing processes and increase productivity. Request a demo today.