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Industry 4.0: What Are the Impacts Posed on Global Manufacturing?

What is Industry 4.0?

The Fourth Industrial Revolution, or Industry 4.0 was first made popular and known by a team of scientists working on a high-tech strategy for the German government. The Industry 4.0 model developed by these German scientists represents the implementation of Artificial Intelligence (AI), Industrial Internet of Things (IIoT), and Big Data analytics in the factories. To make it simpler, Industry 4.0 is a digitalisation process of all manufacturing components done by replacing outdated mechanical and analog technologies.

Timeline of All Industrial Revolutions

Before Industry 4.0 was introduced, there were 3 industrial revolutions that happened starting from the 18th century. These initial revolutions brought new technologies and sped up the growth of the manufacturing industry, alongside other major industries at that time such as mining, agriculture, and the iron industry. 1: The First Industrial Revolution The First Industrial Revolution started circa 1760-1820 when manual, hand production methods were replaced by machines powered by steam and water. 2: The Second Industrial Revolution The Second Industrial Revolution happened around 1870 when reliable electric engines were invented, allowing the development of manufacturing equipment that were more compact and cost-effective compared to the ones from the 18th century. During this industrial revolution, only one man is needed to supervise or operate a unit of equipment. 3: The Third Industrial Revolution The Third Industrial Revolution, also known as the Digital Revolution, happened in the 1970s after programmable equipment such as CNC machines and first industrial robots were introduced. This was also the beginning of more advanced digital developments such as the supercomputer, that drastically decreased the need for having human power to operate machines in productions. 4: The Fourth Industrial Revolution The Fourth Industrial Revolution is currently taking place now, driven by advanced technologies such as interconnectivity, Machine Learning (ML), Industrial Internet of Things (IIoT), real-time data analytics, and automation. These technologies are utilised to minimise production effort. This is where humans are no longer needed to actively operate machines.

Components of Industry 4.0

There are essentially 9 components that shape Industry 4.0. These components are mainly the application of the Fourth Industrial Revolution operates through:

  1. Horizontal and Vertical System Integration

  2. Industrial Internet of Things (IIoT)

  3. Cloud Computing and Cloud Systems

  4. Cybersecurity

  5. Big Data and Analytics

  6. Additive Manufacturing

  7. Augmented Reality (AR)

  8. Simulation

  9. Robots

Aside from these components, manufacturers across the globe can also benefit from automated manufacturing execution systems, business management platform (BMP) and material and resource planning (MRP) tools, location and movement detection technology, data communication and network topology, and developments in mobile and wearable tech.

How Industry 4.0 Benefits the Global Manufacturing Industry

Improved Product Quality When processes are automated, manufacturers can produce high-quality products at a much faster rate, with very minimal to no human errors. This is due to the ability to quickly reconfigure automated production lines according to product specifications. Also, by having real-time quality control, manufacturers can insert data entry points to every step of their production process, helping them to detect if any changes made could influence product quality. Higher Operational Productivity As Industry 4.0 provides solutions that utilise smart technologies, data analytics, and interconnected sensors, the operational efficiency of production can be greatly improved. According to research done by MIT, manufacturers can bring down employee downtime by 85% through production automation, and at the same time increases productivity by 11%. Lower Business Costs Extra business costs caused by human errors and inefficient supply chain management can be reduced or eliminated entirely, thanks to the innovative technologies that manufacturers adapt according to Industry 4.0. For example, when manufacturers opt to use 3D printers to develop prototypes, they can reduce the cost of engineering work and accelerate time-to-market. More Profits / Maximised Margins New innovations and improved production efficiency will in turn allow manufacturers (or businesses in general) to generate more revenue. In fact, the German manufacturing industry is expected to earn €30 billion in additional revenues YoY.


To sum all these up, manufacturers need to be ready to adapt and invest in these new technologies to keep up with the supply chain demand pace and not be left behind by more technologically advanced competitors. One of the technologies that can enable manufacturers in doing so is a cloud business management platform like Enterpryze – that can help manufacturers improve in production management, inventory management, and production planning. Enterpryze is here for manufacturers from the start of production up until the delivery of your products to distributors and customers.

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