This is a summary post of the 9 pillars of technological advance report from Boston Consulting Group. You will also find a great infographic underneath that shows what manufacturing CEOs have on their mind this year when it comes to bringing all of these pillars together to use in manufacturing processes.

9 Progressive Information Technology Movements Moving Manufacturing into Industry 4.0

Industry 4.0 is the brainchild of the German government and describes the next phase in manufacturing, known as the post information revolution. I came across a great primer from Boston Consulting Group that neatly describes the nine pillars of technological advancement that underpin Industry 4.0, all of which IT professionals and Manufacturing CxOs must understand in order to effectively compete in the next 10-20 years.

industry 4.0 and manufacturing

Big Data and Analytics

In manufacturing, analytics optimizes production quality, saves energy, and improves equipment service. According to BCG, in an Industry 4.0 context, the collection and comprehensive evaluation of data from many different sources—production equipment and systems as well as enterprise- and customer-management systems—will become standard to support real-time decision making.

Autonomous Robots

Robots in manufacturing are evolving for even greater utility, becoming more autonomous, flexible, and cooperative. Eventually, says BCG, they will interact with one another and work safely side by side with humans. These robots will cost less and have a greater range of capabilities than those used in manufacturing today.


3D simulations of products, materials, and production processes are already used in the engineering phase of manufacturing, but in the future, simulations will be used in plant operations as well. These simulations will leverage real-time data to mirror the physical world in a virtual model. Operators will be able to test and optimize machine settings in the virtual world before the physical changeover, driving down machine setup times and increasing quality.

Horizontal and Vertical System Integration

Most of today’s IT systems are not fully integrated, and nor are departments such as engineering, production, and service. But with Industry 4.0, companies, departments, functions, and capabilities will become more cohesive as cross-company, universal data-integration networks evolve and enable automated value chains.

The Industrial Internet of Things

In its report, BCG mentions that today, only some of a manufacturer’s sensors and machines are networked and make use of embedded computing. They are typically organized in a vertical automation pyramid in which sensors and field devices with limited intelligence and automation controllers feed into an overarching manufacturing process control system. In the Industrial Internet of Things, however, more devices will be connected, allowing them to communicate and interact with one another and centralized controllers.


Along with the connectivity and communications protocols that come with Industry 4.0, says BCG, the need to protect critical industrial systems and manufacturing lines from cybersecurity threats will increase dramatically. As a result, secure, reliable communications and sophisticated identity and access management of machines and users will be essential.

The Cloud

BCG reports that Industry 4.0 will require increased data sharing across sites and company boundaries. At the same time, the performance of cloud technologies will improve, achieving reaction times of just several milliseconds. As a result of this productivity boost, machine data, and functionality will increasingly be deployed to the cloud.

Additive Manufacturing

Companies have just begun to adopt additive manufacturing, such as 3-D printing, which they are using to prototype and produce individual components. With Industry 4.0, claims BCG, these additive manufacturing methods will produce small batches of customized products that offer construction advantages like complex, lightweight design.

Augmented Reality

These systems are currently in their infancy, but in the future, companies will make much broader use of augmented reality to improve decision making and work procedures. In the virtual world, operators will learn to interact with machines by clicking on a cyber-representation. They will also be able to change parameters and retrieve operational data and maintenance instructions.

Infographic: The Manufacturing C-Suite Considerations in 2015 on the Changing Technological Face of Manufacturing

industry 4.0 infographic and manufacturing

What are your thoughts on Industry 4.0 and how it will change manufacturing? Let us know in the comments below.

Original Post at: Industry 4.0 Is All About Progressive IT by Alexandra Levit.

At Cerasis, a core value of ours is continuous improvement for not only our company, our clients, and employees, but through our blog and content to those who are related to what we do (transportation management) in the fields of manufacturing, supply chain, logistics, distribution, and transportation. We feel as we keep our eye on what our customers are faced with, we can better understand their needs and develop transportation management thru technology and services which align to the best possible outcomes desired by shippers. Gone are the days of tactical moves with freight. Freight shippers are now more efficient thanks to technology, such as transportation management systems. Shippers, especially manufacturing companies, are then empowered further by the convergence of technology. We see this already in the use of our own TMS, the Cerasis Rater, with APIs, Web XMLs, integration into other manufacturing and supply chain systems, and soon, undoubtedly, with our history of innovation, we will plug into the Internet of Things (IoT) and help power efficiently the transportation functions with the supply chain of manufacturers who are living and breathing in Industry 4.o, also referred to as the Fourth Industrial Revolution.

In today’s post we will talk about what is Industry 4.0, recap the Internet of Things, and how together the Internet of Things and Digital Manufacturing will propel us all into the future.

Industry 4.0: The Fourth Industrial Revolution

So what is “industry 4.0?” Roughly it is a broad vision of tomorrow’s manufacturing: Products finding their way independently through the production process. In intelligent factories, machines and products communicate with each other, cooperatively driving production. According to Accenture, they define Industry 4.0 as:

Connected, intelligent products that communicate with users, new digital business models that harness collected data to offer additional services and as-a-service products, products on the assembly line that tell shop floor machinery how they are to be processed. The core of Digital Industry 4.0 is highly intelligent connected systems that create a fully digital value chain. Digital Industry 4.0 is also commonly referred to as the Industrial Internet of Things.

Connectivity has Brought us the Digital Industry 4.0 Revolution

In this bylined article, Ralf Russ, Accenture Managing Director, writes that by 2020, connected and intelligent products are predicted to be the biggest “user group” of the internet, estimated at 24 billion devices. But this is not just a revolution in consumer technology. In the Industrial Internet of Things world, connecting smart devices has the potential to transform how factories operate, buildings are managed, and vehicles are maintained and operated – in fact an almost limitless number of new industrial processes, functions and services.

Three key trends are changing the way of life for industrial companies and their employees today.

  1. Digitize: Production processes in all sectors, from high tech to industrial equipment, are being transformed by digital technologies.
  2. Industrialize: Leading companies are already integrating these technologies to improve and evolve pillars of their value chain.
  3. Optimize: Innovative manufacturers recognize that enhancing the manufacturing process for even simple products presents new opportunities for growth.

A Broad Look at the Internet of Things (IoT)

The Internet of Things (IoT) is a vision of a world where almost any kind of object can and many will carry some kind of transmitter to send and receive data from the internet.  Think sensors and smart appliances everywhere, and all able to communicate, both by M2M (machine to machine) and M2H (machine to human).

Gartner estimates that in 2020 more than 26 billion devices will be able to communicate and signal via the internet.  Cisco estimates the IoT market will add more than $14 trillion to the global economy, of which McKinsey says $310 billion represents incremental revenue for businesses.

Susan Hauser, Microsoft Vice President, said that “the challenge for successful companies in the coming year will be to harness this data to act on key insights, improve customer service, reduce time to market, enable new innovation in product and services development, and ultimately transform themselves with new business models and revenue streams.”

One area where IoT is poised to drive innovation in particular is manufacturing.  By embedding sensors across all devices and elements of the shop floor, businesses will be able to collect real time manufacturing data, enabling very precise monitoring of the production process.  Companies will be able to do predictive maintenance to reduce downtime, better manage their inventories, and also to become more flexible and responsive to changes in market conditions.  A SAS survey found that 18 percent of industrial machinery companies have already started to use ‘IoT devices’ to increase production and reduce costs.

Sansa Security predicts that 2015 will be the year where device sensors will by default use common, rather than proprietary, protocols to communicate, enabling devices to better interact and be controlled through a single interface.  But businesses will need to make investments.  Old equipment will need to be upgraded or replaced in order to support the new paradigm of digital manufacturing.

John Nesi, Vice President at Rockwell Automation, said that IoT technology is needed to address “global competitive pressures that are challenging industrial and manufacturing companies to drive inefficiencies out of their systems, manage workforce skills gaps and uncover new business opportunities.”  Done properly, the benefits will be “faster time to market, improved asset utilization and optimization, lower total cost of ownership, workforce efficiency, enterprise risk management and smarter expenditures.”

The Internet of Things has been around and growing for many years, says Dr. Ahmed El Adl, CTO for the manufacturing industry at CSC. “There’s no official definition of the Internet of Things, but new technologies – and some dating back to the ‘60s – are coming together, making it possible to connect and control nearly everything in real-time to make smarter decisions,” El Adl says.

The Internet of Things will Power Digital Manufacturing

Digital manufacturing is the use of an integrated, computer-based system comprised of simulation, three-dimensional (3D) visualization, analytics and various collaboration tools to create product and manufacturing process definitions simultaneously.

The Internet of Things is a key element of the next stage of digital manufacturing. Ralf Schulze, industry strategist for business development at CSC, says “Industry 4.0” is the merger of information and manufacturing technologies: “IoT devices are one of the main drivers, but Industry 4.0 includes intelligent bridging between CRM, SCM and ERP systems, social media and other information sources. Smart materials will influence how they are used. Additive manufacturing will allow me to print my parts rather than have them produced on big machines. These are all aspects of Industry 4.0.”

El Adl says manufacturers like GE and Cisco are moving quickly to embrace the concept of the Internet of Things in new product lines. “They’re designing around the idea that they can connect everything, collect any data. When you view the stages of a product lifecycle in that context and ask ‘Which stages should be redesigned to take advantage of this?’ the answer is ‘Every stage.'”

Some stages are feeling that influence now. Greg Rodgers, manufacturing industry specialist at CSC, says data generated by connected equipment can be used to make predictive maintenance practical. “We can learn about issues with a machine or analyze data to understand what’s going on. We can use that data to make proactive maintenance decisions and change sales models. Plus, it opens up a whole new range of opportunities for manufacturers and service companies,” Rodgers says.

Security concerns surrounding the Internet of Things are due to two factors, El Adl says. The first is scale. “The move from IPv4 to IPv6 will allow us to connect 340 trillion, trillion, trillion devices, so the scale of exposure is many times larger. And we need to learn new security protocols. IT organizations have experience securing devices using today’s protocols, but we don’t have much experience with IoT protocols like ZigBee. This should not stop you from exploring the IoT today. You can secure your island but you can’t secure the world.”

Schulze says “orchestrated manufacturing” is a strategy for capitalizing on change wrought by Industry 4.0 and the Internet of Things.  “It starts by examining the impact of these technologies on the business model, to the business applications, and all the way from technology to how I structure my data and what analytics engines I use,” he says. “The framework we’ve created is a very good start to help make products and processes smarter.”

Infographic: Capitalizing on the Internet of Things and Industry 4.0

Three industrial revolutions that have brought epic changes to the world of business are steam engines, mass production, and internet technology. Today, we are in the midst of what is often called the fourth industrial revolution – the convergence of physical things with the world of the internet: The Internet of Things. Let us give you three figures that show why the IoT creates challenges both long-term and immediate. First, consider the number of IP-enabled devices such as cars, heating systems or production machines. Based on research by the analyst firm Machina Research 14 billion of those things will be connected by 2022. Second, the ITU predicts that by 2015, 75 percent of the world’s population will have internet access. And third, the omnipresent mobile revolution: according to the mobile forecast from Cisco’s Visual Networking Index, more than 3 billion smartphones and tablets will be in use globally by 2017.

industry 4.0 infographic-page-001

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