What is Industry 4.0?

Industry 4.0 or the fourth industrial revolution is an industry-wide concept that is becoming the new way of working for organisations around the world. 
What is Industry 4.0? | Probe CX

Let’s start by introducing an English economic historian by the name of Arnold Toynbee: the man who first introduced the term ‘the industrial revolution’. This term was used to describe a period of change in England’s production and manufacturing era from 1760 to 1840.

Since then, we have had three noticeable industrial revolutions and the fourth one has already begun: enter Industry 4.0. In this blog, we explore all there is to know about the fourth industrial revolution, how it is taking the economy by storm and ultimately, how your organisation can capitalise on it to thrive.

What is Industry 4.0?

Industry 4.0 is a term used to describe the transition to a digitally focused era in business. Although this fourth industrial revolution has seen significant changes in the production and manufacturing industries, the effects will be felt across all industries. Others may recognise Industry 4.0 as the fourth industrial revolution, smart manufacturing or digital manufacturing.

Think of it this way, if you delve into the operations of any business and find evidence that technology or machines are being implemented to ‘bridge the gap’ between the digital and physical world, you’ve got an Industry 4.0-impacted business. Another example could be the use of machines or tech that ‘talk to each other’ and can translate big data into coherent information for us humans.

Key identifiable characteristics of Industry 4.0 include:

  • Autonomous robots
  • Horizontal and vertical system integration
  • Big data and analytics
  • Simulations
  • Industrial Internet of Things (IIoT)
  • Cyber security
  • The Cloud
  • Additive manufacturing
  • Augmented reality.

Where did Industry 4.0 come from?

An understanding of the manufacturing and production history of our economy is an important place to start to properly comprehend the impact Industry 4.0 will have on your business. We need to see how the other three industrial revolutions before, the way we work and how we deliver goods and services has changed to positively affect the growth of our society.

The four industrial revolutions

What influence will Industry 4.0 have on organisations?

In short, the fourth industrial revolution will change the way organisations distribute, manufacture and upgrade their services and products through the introduction of digital transformation concepts. These include cloud computing, machine learning, artificial intelligence (AI) and the Internet of Things (IoT).

Not convinced Industry 4.0 has hit our shores? Just walk into any newly refurbished or built factory and if you spot sophisticated technology and machines providing information to humans that can help make more efficient operations… you’ve got yourself an Industry 4.0 factory.

Artificial intelligence, robotics, advanced sensors, embedded software, intelligent automation and robotic process automation are all tech advancements that organisations are investing in to stay competitive in this industrial transformation.

But in a way, Industry 4.0 is a blessing. Who wouldn’t want easy access to insights that could lead to better decision-making and machines that provide predictive maintenance and self-optimisation of processes to name just a few benefits?

Productivity or quality an issue? Want more time to strategise and better information to do so effectively? IoT devices and AI-powered visuals that are being implemented into these ‘smart factories’ can help your organisation do just that.

What do the tools and tech of Industry 4.0 look like?

It’s important to note that the following technology and tools have existed, as themselves, well before Industry 4.0 started to gain traction. However, thanks to Industry 4.0, they are starting to influence and be implemented alongside each other to facilitate improved organisational efficiencies and promote cost savings.

The Industrial Internet of Things (IIoT)

A tool used by smart factories to exchange, collect and analyse large sets of data or big data. IIoT refers to the thousands upon thousands of devices that are connected to wifi networks and fitted with sensors that gather, share and collect data. The amount of data IIoT can process is extreme and the detail it can collect fosters faster decision-making in record times. It provides organisations with the ability to see just how productive an operating line is, which one may require maintenance in the near future and where supply chain bottlenecks are becoming an issue.

Artificial intelligence, automation and machine learning

Using extensive sets of historical data, machine learning algorithms can provide insight to businesses that were previously not available; or would’ve taken years to comprehend and by then, the insight may be useless. Automation provides cost, time and productivity savings that are now immeasurable as a result of AI-powered tech that provides better predictability and visibility of performance.

Cloud computing

How all of it is connected: the integration of all these technologically industrial elements. Cloud computing tech takes insights and information from various areas of the organisation like supply chain, sales, production, engineering, service and distribution and is able to store it anywhere at any time, ready to be used.


A digitally-focused industrial revolution can lead to doubt in data security and the possibility for malware or cyberattacks to run rampant. A more digitally connected workplace means investing in cybersecurity software to protect information, data and tech-enhanced machines.

What are the common challenges of Industry 4.0?

The benefits are limitless when it comes to adopting Industry 4.0 tech: better efficiencies, more oversight into how to improve quality or upgrade services, cost reductions, the list goes on. But what about the challenges and risks?

A lack of skills

Organisations that pursue digital transformation are often met with a lack of access to skilled personnel needed to implement such changes. This is especially so when it comes to the user interface, data science, software development and machine-level control. The fear of the unknown can also see many existing team members  reluctant to use new digital tools and applications.

Investment requirements

Digital revolution requires significant long-term capital investment but businesses should not be scared off by that thought. Rather than commit to a large initial influx of cash, companies can think big but start small with a simple solution that sets the base for further innovation. Identify a smart solution, like implementing a knowledge management system, to deliver an instant win and build the confidence an organisation needs to implement further Industry 4.0 technologies.

Data and IT security issues

Digital innovation always opens up businesses to the threat of security breaches. These include network misconfigurations, software failures and erroneous commands. The move to an Industry 4.0 setting also requires IT infrastructure that’s capable of handling the extra connectivity required for one’s digital transformation.

Cultural changes

If employees are resistant or even hesitant to adapt to change, digital transformation can stall before it even gets started. Prepare staff for such change and seek their buy-in to give your project every chance of success. Likewise, seek advocates from a senior or executive level to ensure there are leaders helping drive the cultural change needed for success.

How can your organisation capitalise on Industry 4.0?

If you’re stuck in the traditional or ‘old-school’ way of doing business, you may be hesitant to change into a more digitally-focused era. However, if a priority for your organisation in the next few years is to become more adaptable, then investing in processes that embrace change can help you survive devastating economic downturns. Ultimately, the economy is constantly changing, and you are at great risk of being left behind if you don’t do the same.

Start by identifying risks and embracing opportunities within the concepts of Industry 4.0 first. Re-assess your operations and see where digital capabilities like IVR and NLP technology or business insights and analytic programs could better your efficiencies. Could you even implement the tech introduced earlier into certain aspects of your business? You don’t need to own and operate a factory in order to benefit, but could you apply Industry 4.0 tools to better understand and become more relatable?

Perhaps hire a consultant to help you understand the possible impacts this revolution could have on your organisation and assist you in preparing plans to combat any negative implications while capitalising on the positive ones.

Consider partnering with an Industry 4.0 expert

Partnering with an organisation that has years of experience in digital transformation and business optimisation is a great way to start incorporating Industry 4.0 concepts into your operations. Depending on what you are looking to prioritise, you could consider a company that specialises in designing and deploying multichannel, digital solutions if complex customer experiences are your key focus.

Or, say you want to look at investing in intelligent automation solutions, with robotic process automation and virtual agents an area of interest. Then, you’d be looking for a partner that harnesses an AI-first mindset underpinned by analytics, design thinking and an agile mindset to help you shape a better relationship with your customers in the digital world.

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