Industry 4.0: Exploring the Impact on Modern Manufacturing Processes

This report provides a comprehensive literature review on Industry 4.0, emphasizing its transformative impact on manufacturing. It begins with an executive summary and table of contents, followed by an introduction that highlights the evolution from Industry 3.0 to Industry 4.0, emphasizing automation, data exchange, and smart factories. The report details the system architecture, including layers like supervisory control, industrial network, cloud, and physical resources. It outlines the design principles of Industry 4.0, such as interconnection, information transparency, decentralized decisions, and technical assistance. The report also contrasts Industry 3.0 and 4.0, highlighting differences in cloud usage, big data analytics, IoT implementation, and data collection. It then explores the opportunities of Industry 4.0 from both micro and macro perspectives, including sustainable manufacturing, new business models, value creation networks, and improvements in equipment, human roles, organizational structures, processes, and product design. Finally, the report addresses the challenges of implementing Industry 4.0, such as rethinking organizational processes, understanding business cases, conducting successful pilots, and adapting company culture. The conclusion summarizes the revolutionary changes, advancements, and opportunities that Industry 4.0 brings to the industry.

Running head: INDUSTRY 4.0
Industry 4.0
Name of the Student
Name of the University
Author Note

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Executive Summary
The purpose of this report is to put emphasis in the aspects related to the Industry 4.0 that has
been an industrial revolution globally and attracting many attentions around the world. This
report presents a literature review on Industry 4.0 expressing the difference between the Industry
4.0 and Industry 3.0 including the opportunities those could be utilized for bringing the change in
the world and enhance the livelihood of the human beings. There are certain challenges in
implementing this around each corner of the world and it has been expressed in this report.
Twenty peer-reviewed journals have been chosen for the collection of relative data to the
industry 4.0. This report concludes that overcoming certain challenges can be helpful in bringing
revolution within the industries through the successful implementation of the Industry 4.0.

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Table of Contents
Introduction......................................................................................................................................3
Industry 4.0......................................................................................................................................3
Difference between Industry 4.0 and Industry 3.0..........................................................................6
Opportunities...................................................................................................................................7
Challenges......................................................................................................................................10
Conclusion.....................................................................................................................................11
References......................................................................................................................................13

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Introduction
Many innovative technology and software has change the face of the factory production
and despite of that many critical challenges are being faced by the industries in the production
sectors. Sustainability has become one of the most concerning subject for the current world and
may approaches have been proposed such as AMS (Agile Manufacturing System) and FMS
(Flexible Manufacturing System) among which, MAS has become the more emphasizing one.
Automatic production system has been developed through the application of the WSN (Wireless
Sensing Network), Internet of Things, Cloud Computing, and many more in manner to operate
the CPS (Cyber Physical System) automatically (Schmidt et al. 2015). This report presents a
literature review on how Industry 4.0 can be used as an opportunity within the industries for
improving the existing system. The first section describes about the system architecture and
operational mechanism of the industry 4.0, followed by which a comparison has been presented
against the industry 3.0. This report also emphasizes on the challenges and opportunities of the
Industry 4.0 over the existing technologies.
Industry 4.0
Lee, Jay, Behrad Bagheri, and Hung-An Kao (2015) expressed Industry 4.0 as a name for
the trending and innovative technologies being implemented for the automation of the production
processes and data exchange. It has also represented as the fourth industry revolution or smart
factory that can take decentralised decisions through monitoring and creation of the physical
processes within the cyber-physical systems (kang et al. 2016). Following is the figure
describing the system architecture of the industry 4.0 describing the four tangible layers

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including supervisory control terminal layer, industrial network layer, cloud layer and physical
resource layer:
Figure 1: Smart Factory’s framework of Industry 4.0
(Source: Wang et al. 2016)
This figure describes how the CPS is being execute through the exchange of the
information and integration between the information exchange and the operation with the
physical objects (Wang et al. 2016). Operational mechanism can be described as following
design principles:

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Figure 2: Design Principles of Industry 4.0
(Source: Hermann, Pentek and Otto 2016)
Interconnection: Lee, Kao and Yang (2014) stated, “Wireless communication
technologies are playing prominent role in the enhancement of the internet access throughout
everywhere in the world. Common communication standards play crucial role in the connection
between the devices, machines, people, and sensors between all these entities. These standards
can be helpful in allowing the flexibility connection between the vendors and the modular
machines that can be alternatively resulting in the flexibility adaption approaches for the Industry
4.0’s Smart Factories (Schuh et al. 2015).
Information Transparency: A new picture of the information transparency can be enabled
through enhancing the interconnection between the people and the objects and fusing both the
approaches within each other. Considering this aspect, it is Important the participants connected
via IoT are well informed with the results related to the data analytics related to the technologies
associated among the participants (Brettel et al. 2014). Examples such as drawings, electronic
documents and simulation models can be related to the information from the virtual world.

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Decentralized Decisions: According to (Hermann, Pentek and Otto 2016) the
combination of the decentralized and interconnected decision makers allowing the utilization of
the global and local information at the same moment for enhancing the overall productivity and
better decision-makings. Technically, it can stated that decentralized decisions can be enabled
through the CPS as the embedded actors, sensors, and embedded computers are responsible for
allowing the control and monitor over the physical world autonomously.
Technical Assistance: It is crucial factor for the humans for getting support from the
assistance systems as the CPS has been making decentralized decisions and forming complex
networks that led to the enhancement in of complexity in the production sector (Gorecky et al.
2014). It is a crucial factor for the robots to interact intuitively and smoothly along with the
counterparts of the humans, in manner to successful, effective, and safe support of the human
beings within the physical tasks involved in the human-machine collaboration.
Difference between Industry 4.0 and Industry 3.0
In Industry 3.0, production means have been already interconnect ted with the reasonable
automation level however; current technologies in the Industry 4.0, the automations through
current technologies have been established in a predefined hierarchy manner. In this solution,
inside factory (connectivity levels) have been already defined including the measurement of the
process state through the sensors and software those have been utilized for the decision makings
related to the logistics or planning. Drath and Horch (2014) eexplained the same concept through
the statement, the vision of Industry 4.0 can be a helpful approach for the establishment of a
hyper-connectivity that resulting in the wider scope even outside the factory boundaries.

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Following is the list describing the fundamental difference between the Industry 3.0 and Industry
4.0:
Cloud Differences: Previously, data was not being shared effectively among other
organizations and employees however; further implementation enhances the scope for the data
access that enhanced the supply chain management alternatively resulting in the enhancement of
the performance of the organization.
Big Data and Analytics: Many data is being collected and has been increasing rapidly and
that was enhanced through the big data implementation that allows the industries to analyse a
sheer amount of data at instances.
Data collection: Industry 4.0 “enables other applications that can optimize overall
equipment effectiveness, improved predictive maintenance, energy management etc. (Zhou et al.
2015).”
IoT implementation: Iot resulted in the better and effective communication between both
the ends that can be helpful in utilizing the machinery devices in better and precise manner
(Gilchrist 2016). It allows the user to feed data along with the feedback opportunity that
alternatively results in the enhancement of the communication.
Opportunities
Opportunities of the Industry 4.0 can be divided between two perspectives including the
micro and macro perspective of the industry 4.0 that can be clearly described as follow:
Sustainable Manufacturing Opportunities for macro perspective:

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Business Models: In manner to offer new services, new business models can be much
effective through the utilization of the smart data. Business models based on the ‘sustainability’
theme are capable of reducing the impact and creating positive impact fir the community and rest
of the globe that can be utilized for eliminating the social or environmental problems (Liao et al.
2017). This can be an innovative approach for selling the tangible products only despite of
selling separately the accessibility and functionality of the products.
Value Creation Networks: Industry 4.0 can be an approach for the realization of industrial
symbiosis and product life cycles’ closed loop through the application of the value creation
networks’ cross – linking properties. It can be helpful in allowing the efficient and effective
coordination between the energy, material, water flows, and products in the different factories
and the overall product life cycle. Following figure describes the Industry 4.0’s macro
perspective:

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Figure 3: Industry 4.0’s Macro Perspective
(Source: Stock and Seliger 2016)
Sustainable Manufacturing Opportunities for micro perspective:
Equipment: Retrofitting can be a better approach for enabling the cost – efficient and
easy manner for upgrading the actuator systems and the exosting manufacturing equipment
related to the sensors including the control logics that will be helpful in overcoming the equients’
heteroginity in factories (Shrouf, Ordieres and Miragliotta 2014).
Humans: Industry 4.0 provides three different approaches for the sustainability that can
be utilized in manner to cope up with the social challenges those are being faced in Industry 4.0.
this includes the implementation of the ICT technology for the enhancement in the training

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efficiency, enhancing the fostering creativity and intrinsic motivation through establishing the
better approaches for the CPS (Kagermann 2015). Thirdly, enhancement in the extrinsic
motivation though the implementation of the flow theory’s concept.
Organization: Koch et al. (2014) explained in relation with this topic that the major focus
of the smart factory is to allocate the water, energy, materials, and products in effective and
efficient manner through considering the CPS’s dynamic constraints.
Process: This desig can be an helpful approach towards addressing the Industry 4.0’s
resource efficiency approach through using new technologies or designing the effective
manufacturing process chains for exampe internally cooled tools and many more.
Product: Another concerning topic in the Industry 4.0, in relation with the sustainable
design is to concentrate on the “realization of closed-loop life cycles” in manner to allow the
product reusability through the application of the cradle-to-cradle (Stock and Seliger 2016).
Following figures decrribes the Industry 4.0’s Micro Perspective:

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Industry 4.0’s Macro Perspective
(Source: Stock and Seliger 2016)
Challenges
With the continuous advancement in the Industry 4.0, interaction behaviour have been
changing and so new challenges arise those can be listed as following:
 New outcomes could be maximized through rethinking about the functionality and
processes of the organization (Gorecky et al. 2014).

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 Other challenge faced with the Industry 4.0 is to effectively understand about the
business case and interrelate it with the production and output of the organization
 Conducting successful pilots is another crucial factor for the successful implementation
of the Industry 4.0 in manner to support the sustainability
 Needful sectors for the actions could be a hard subject in understanding the
organizations’ needs and requirements (Zhou, Liu and Zhou 2015)
 Examination of company culture
 Change management has been overlooked in most of the cases
 The genuine interconnection of all departments
 Developing new talent and recruiting
Conclusion
Based on the above literature review, it can be concluded that Industry 4.0 has been a
revolutionary approach towards the implementation of a sustainable environment and smart
factories within the industries. New implemented features are innovative, effective, and efficient
from the previous approaches. Various modifications and advancements have been implemented
on the previous models such as Industry 2.0, and Industry 3.0 those could be utilized for far more
application than it was earlier. This literature review presented the system architecture of the
Industry 4.0 along with the design principles that can be helpful in clearing the concepts related
to the Industry 4.0 and deep understanding on it. A comparison has been presented in this
literature review considering the advancement and enhancement implemented within the industry
3.0 that separates it from the Industry 4.0. There are many opportunities associated with the
Industry 4.0 is the possible technology that can enable the flexibility within the existing system
and thus, reflect in the overall production and output of the organization. This report also throws

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light on the several challenges those are considerable with the sector of the Industry 4.0 and its
proper and effective utilization within the real world.

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References
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decentralization and network building change the manufacturing landscape: An Industry 4.0
Perspective. International Journal of Mechanical, Industrial Science and Engineering, 8(1),
pp.37-44.
Drath, R. and Horch, A., 2014. Industrie 4.0: Hit or hype?[industry forum]. IEEE industrial
electronics magazine, 8(2), pp.56-58.
Gilchrist, A., 2016. Industry 4.0: the industrial internet of things. Apress.
Gorecky, D., Schmitt, M., Loskyll, M. and Zühlke, D., 2014, July. Human-machine-interaction
in the industry 4.0 era. In Industrial Informatics (INDIN), 2014 12th IEEE International
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Hermann, M., Pentek, T. and Otto, B., 2016, January. Design principles for industrie 4.0
scenarios. In System Sciences (HICSS), 2016 49th Hawaii International Conference on (pp.
3928-3937). IEEE.
Kagermann, H., 2015. Change through digitization—Value creation in the age of Industry 4.0.
In Management of permanent change (pp. 23-45). Springer Gabler, Wiesbaden.
Kang, H.S., Lee, J.Y., Choi, S., Kim, H., Park, J.H., Son, J.Y., Kim, B.H. and Do Noh, S., 2016.
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