Literature Review: Industry 4.0 - Challenges and Opportunities

This literature review comprehensively examines Industry 4.0, the fourth industrial revolution, contrasting it with Industry 3.0 and highlighting its technological advancements. It explores key challenges such as employee qualification and the need for proactive management, along with opportunities like increased efficiency through automation and smart technologies. The review delves into information technology strategies, including the use of European Technology Platforms, the internet of things, artificial intelligence, and cloud systems. It also discusses the impact of Industry 4.0 on business models, emphasizing the need for companies to embrace these changes to remain competitive, offering insights into the benefits of smart factories, enhanced communication, and improved production efficiency. The review concludes by emphasizing the importance of investment and adaptation to fully realize the benefits of this new era of industrial revolution.

Running head- A LITERATURE REVIEW OF INDUSTRY 4.0 1
A literature review of industry 4.0
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Introduction to the literature review
The literature review is about the industrial revolution of the fourth revolution of industry
(industry 4.0). In the literature, a summary of various aspects of the industry will be explored
comprehensively. The literature review covers the significant differences between industry 3.0
and industry 4.0. Major challenges, as well as the opportunities of industry 4.0, will be given. It
will further provide various information technology strategies of this era of the industrial
revolution. A detailed analysis of the transformations that industry 4.0 has brought in the
interconnected and competitive industry against industry 3.0 will also get evaluated. Industry 4.0
has come up as a result of technological advancements.
Differences between industry 4.0 and industry 3.0
According to Fritscher and Pigneur 2009, industry 3.0 entails already interconnected industry. It
is, therefore, the current technological solutions in the world of automation being experienced by
current industries. They are commonly called digital industries, whose revolution began in the
1970s with the advancement in technology. During this era, various changes and more robots
were brought in the assembly line to accomplish most tasks that were done by individuals. For
example, there was the use of programmable robots and logic controllers. The era is
characterized by quality analysis, supply management, product design, and inventory tracking
that were realized through load balancing, middleware, Microsoft, web servers, and databases
(Fritscher and Pigneur, 2009, p. 44). Unlike industry 3.0, industry 4.0 has come up with the
internet of things and advanced means of enhancing production efficiency by companies in the
industry. Furthermore, it has brought up high quality analysis of product designs by
manufacturing companies, far much better than what industry 3.0 contributed in the industry.

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The publication made by Johnson and Christen 2008, reveals that Industry 4.0, is the fourth era
in the industrials revolutions of the cyber-physical system. The era entails storage systems, smart
machines, and production equipment with the capacity of autonomously passing information
controlling each other independently as well as triggering actions. It is clear that the era provides
more advancement in the field of the industry through intensive researches being conducted to
shaping the future of such sectors. The industrial evolutions targets at ensuring that efficient
operations persist aiming at improving the development of new businesses by creating enormous
economic influence as opposed to other industrial evolutions. In this era, industries will ensure
that business organizations establish advanced storage systems, advanced production systems
with the capacity to exchange information through digital means (Johnson and Christeen, 2008,
p.51). Increased evolution in the production sector by most companies has been enhanced by
industry 4.0 which has come up with technologies that improve machine efficiency regarding
time, the quantity of produces, as well as quality products as demanded by customers in the
market.
Challenges of industry 4.0
The scholars such as Lee and Yang 2015 revealed that industry 4.0 is encountered by some
obstacles which barricade these industries from realizing the set goals of the industrial
revolutions. The problem of insufficient qualification of employees is profound and hence a great
Destructor. Additionally, the management of the fourth revolution organization needs good
planners who are proactive and highly committed towards the achievement of the set objectives

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to move the industry to a higher level. These attributes are lacking to such leaders who lack
vision for their organization (Lee and Yang, 2015, p. 4).
Vargo and Lusch 2009 provided evidence that the contemporary industries do not have the
planned regulations, standards, and forms of certification which otherwise would have enhanced
these businesses to compete favorably with the perspective of remaining at the top. Adopting the
new system of a company is another challenge since many jobs will be lost. It is because the
fourth generation of the business focuses on the employment of many operations using
information technology and automatic processes. Therefore, they deprive job opportunities,
particularly to the low-class society. Furthermore, the era encounters threats of redundancy of the
industry information technology department, therefore unable to deliver accordingly resulting to
failure in enhancing creativity and innovation which are the two major tools that determine the
success of the industrial operations (Vargo and Lusch, 2009, p. 19).
Information Technology strategies
Studies made by Patel and Giaglis 2009 reveal that industries of generation 4.0 focus on various
IT strategies regularly, to make the organization wholly digital. The policies are employed by the
organizations as major tools to ensure that decisions pertaining technologies through
identification of fundamental technology and gaps required for new inventions are
technologically done enhancing development. Such industries, to realize these goals, their
stakeholders have set up of European Technology Platforms (ETPs) which aim at supporting
development agendas of innovation and creativity in the field of technology. Also, the
organizations are guided by digital changes whether vertical or horizontal value chains and
services or products of the companies giving them (Partel and Gillis, 2009, p. 167).

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Osterwalder in his publication 2010 elaborated that for changes to be realized, there is the need
for the organizations to launch the internet of things platforms, artificial intelligence, machine
learning, cybersecurity, cloud systems and adaptive changes which will cause some
transformations in the organizations. Intensive research is another strategy being employed to
improve the information technology intending to developing the knowledge drivers and
accomplishments needed by the industries. The industry is also expected to impact a four long-
term relationship paradigm targeting to change the approach of manufacturing in the European
countries. It will focus on enhancing integration of customers in production, processing, and
design sections. The technology will also focus on improving working conditions of humans
through human-oriented interfaces. The study further elaborates that such organization targets at
facilitating communication between individuals, products, and machines with a purpose to
provide real-time access to products and product information for the involved entities and the
performance of autonomous work progress (Osterwalder, 2010, p. 56).
Opportunities for industry 4.0
This type of industry enjoys a wide range of opportunities that accrue as a result of its
digitalization. The opportunities are as discussed below
Bettaglin and Lamba 2015 expounded that the industry has realized the easier work as a result of
the rise not only using workforce but also robots in the factory. The combination of both workers
and robots in executing the factory's duties gives it an upper hand to move to higher heights of
excellence regarding the production and the time-saving. Also, the invention of autonomous
vehicles boasts the supplies. There is also secure communication within the factory between the

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designers and the factory. This is enabled by the use advanced communication technologies and
sensor network which easily links them (Bettaglin and Lamba, 2015, p. 44).
Barguet and Amigo 2013 revealed that the manufacturing industry enjoys a wide range of
potential that is made available by their use of smart technologies. The Engineers access timely
feedback on the prediction of the cost and performance hence take an appropriate measure.
Furthermore, the factory processes can be assigned automatically using the highly digitalized
factory equipment and machines (Barquet and Amigo, 2013, p.694).
Badden-Fuller and Haefliger 2013 propounds that it is possible to predict the failure of the
equipment thus taking appropriate and timely preventive measure to curb it, this is possible
because of the smart factories. In such a case, the maintenance team is summoned to act before
things go bizarre (Badden-Fuller and Haefliger, 2013, p. 420). Industry 4.0 has come up with
numerous technological revolutions that facilitate industry growth and development in the
engineering and technology sector. The invention of the internet of things has made it easier for
the maintenance team to repair and service manufacturing machines in a more fast and prompt
manner.
According to the publication made by Arnold.et.al 2016, lack to bracing new technologies will
not only face out companies from succeeding in business but instead it will be difficult for such
companies to compete with those that have embraced it. Reports have also shown that smart
factories cannot be equated with others regarding the amount of the money they make. This is a
clear indication that of it enjoys incredible profits. There is, therefore, need for all companies to
embrace the smart factories so as also to enjoy the many opportunities it harbors (Arnold, Kiel,
and Voigt, 2016, p. 44). The adoption of the internet of things in the industry by companies has

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been a perfect strategy for enhancing productivity efficiency thus the right perspective of gaining
a competitive advantage to companies that operate under sector 4.0. With this increased use of
industry 4.0 by companies, the quality of goods and services offers is unique and thus satisfying
customers who show loyalty to companies and market the brand to their colleagues. As a result,
competitive advantage by companies in the industry against competitors is achieved.
Conclusion
In conclusion, it is evident that the revolution era of industry 4.0 is the most efficient phase of the
industrial revolution which will ensure that such sectors are fully automated as well as
digitalized. The operation of such organization will be more accessible, flexible and faster.
However, in realizing these benefits, results in increased costs of production for instance
increased costs of acquiring improved machines and training of the IT experts. The management
needs to invest heavily in industry 4.0 for success to be realized.

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