What’s the latest on Industry 4.0? We’ve been following (and driving) smart manufacturing transformation for a number of years now. But over the last few years (particularly through the pandemic), the world has shifted and so has manufacturing. 

But what about the technology?

In the first part in this series, we looked at some of the barriers to adopting Industry 4.0, including the frustration caused by new technology that wasn’t quite there yet.

So, let’s take a look at whether the technology, adoption, and ideas have changed in the last few years. 

But first, let’s start with some basics…

What is Industry 4.0?

Industry 4.0 is another way of saying ‘The Fourth Industrial Revolution’. It summarizes the transformation currently taking place in manufacturing around the world, as companies increasingly move towards digitalization, connectedness, big data, analytics, automation, AI, internet-enabled devices, and more.

What does Industry 4.0 look like in practice? 

Prior to Industry 4.0, you’d find a lot more paper on the factory floor, no screens, a lot more operators, and manual processes. 

Now, you might find:

  • Operators working alongside computer devices to add relevant data from the factory floor
  • Other processes automatically entered into the system
  • An analytics platform using data to predict issues, trigger events, and control production processes
  • Real-time data from the factory accessed on any device (anywhere in the world) via secure login
  • Better decision-making and automatic improvements to performance

Is Industry 4.0 working?

Industry 4.0 has a lot of potential benefits. Improved efficiency, overcoming workforce shortages, better accuracy, and better-informed decision making. 

Despite this, few manufacturers are satisfied with their progress.

Research by McKinsey suggests that around 70% of Industry 4.0 transformations fail to achieve their stated objectives. And a survey in late 2019 found that just 44% of companies were implementing changes sitewide and just 38% were integrating beyond the factory itself. This means that most implementations weren’t making it beyond their initial pilot phase. 

So… why are so few manufacturers satisfied with Industry 4.0 (or at least, their implementation of it)? And why do so many implementations get stuck in phase one? 

Gartner’s Hype Cycle

Gartner's Hype Cycle
Credit - Gartner’s Hype Cycle

To understand why people aren’t satisfied with Industry 4.0, it helps to look at the theory. 

Gartner developed the Hype Cycle, which is a way of graphing people’s expectations of technology over time, with five distinct stages:

  • Innovation trigger – There’s an initial breakthrough or excitement, triggering interest, though the product itself does not yet exist or have proven capabilities (those who first learn about it have realistic expectations based on known limitations)
  • Peak of inflated expectations – Technology is still relatively new, but many more people are hearing about early successes and getting excited for its potential (with often unrealistic expectations based on limited understanding)
  • Trough of disillusionment – A number of implementations don’t go as planned and people begin to realize the technology’s limited capabilities can’t live up to their earlier expectations
  • Slope of enlightenment – Technology begins to mature (along with an understanding of its capabilities), there’s new iterations and pilots, with expectations steadily increasing over time
  • Plateau of productivity – Technology proves itself, is adopted more widely, and expectations largely stabilize

Companies can use this model to decide whether it’s the right moment to invest in a new technology. Most will wait until the ‘slope of enlightenment’ when technology begins to become more mainstream, although there are benefits from being an earlier adopter, too.

This begs a simple question… 

Where is Industry 4.0 on the hype cycle?

Unfortunately, the answer isn’t so simple. Industry 4.0 is made up of a lot of different technology innovations at varying stages of development (and expectations).

For example, if you look at Gartner’s Hype Cycle for New Emerging Technologies in 2020, you can see a number of data and AI-related innovations in the ‘Peak of Inflated Expectations’, while others still sit firmly in the ‘Innovation Trigger’ phase.

Gartner’s Hype Cycle for New Emerging Technologies, 2020.

But other Industry 4.0 technologies have been around for decades. And in fact, some of the core concepts and technology behind Industry 4.0 have been around since the 1940s. Check out this general history of Industry 4.0 components:

  • Cyber-physical systems – The term first emerged in 2006, though the first example may be a computer that read values from sensors on aircraft wings in 1941.
  • Internet of Things – The first known example is in 1982 when researches modified a Coke Machine and connected it to the Internet.
  • Big data – This area is rapidly increasing with increased capacity to collect, share, and store data. Statista lists the volume of data created, consumed, and stored per year, going from just 2 zettabytes in 2010 to a projected 181 zettabytes in 2025. 
  • 3D printing – As early as 1981, a research institute published details on a layer-by-layer rapid prototyping technique
  • Robotics – In the 1950s and 60s, early forms of robots were invented, though mechanical devices and robot-like concepts were seen as early as 3000 BC in Ancient Egypt! 
  • Simulation – In the mid 1940s, electronic computers used the Monte Carlo method (or multiple probability simulation) to estimate the possible outcomes of an uncertain event in the design of a hydrogen bomb. 
  • Cloud computing – Companies began using remotely executed cloud applications (like Salesforce) in the early 2000s and AWS began renting cloud server space in 2006. 

So, is anything about 2022 Industry 4.0 actually new? And why are we only really seeing Industry 4.0 implementations now when so much of the technology has existed for decades? What’s changed in the last few years?

Industry 4.0 has a lot of prerequisites

There’s a lot of prerequisites that go into implementing new, innovative concepts and producing technology that actually works. Especially when that concept pulls together multiple innovations and components that rely on each other to deliver outcomes, which is the vision for Industry 4.0.

Consider all the steps that may be involved:

  • The individual parts need to be manufactured
  • The hardware needs to be fitted
  • The technology needs to connect to a network (which also needs to exist)
  • The technology needs to communicate or integrate with other existing technologies (as well as future technologies that are still to come)
  • There needs to be some kind of user interface to manage/control the technology
  • People need to be trained in using the technology

We’ve also seen significant advancements in recent years in data storage capacity, internet speeds, wireless connections, data security, graphics, video, and voice — all of which are coming together to enable Industry 4.0 concepts.

With this in mind, we can get clearer on why Industry 4.0 is now becoming a reality. But how close are we to seeing Industry 4.0 technologies reach maturity and widespread adoption?

From novelty to practical reality

AI images by Craiyon for search term ‘industry 4.0 technology’.
AI images by Craiyon for search term ‘industry 4.0 technology’.

At some point, new technology crosses a performance threshold, and goes from being a novelty to a practical solution that’s faster, easier, or more accurate than alternatives. It might be enabled by another hardware/software/innovation that’s suddenly become available or better. Or it might simply go through incremental improvement over time.

Only a few years ago, talking to Alexa, Siri, or Alexa might have been a novelty for homeowners, with voice commands misinterpreted more often than not. But after years of incremental improvements, many people today rely on these systems to set reminders, build shopping lists, and manage calendars. And increased adoption of these technologies is fuelling further learning and innovation.

Today, people can have fun playing around with AI image generation tools, like Craiyon and starryai. But tomorrow, these technologies may have very practical applications.

In the coming years, we’ll see more Industry 4.0 technologies cross this performance threshold and enable new Smart Factory capabilities that weren’t previously possible.

Are we still in the early days of Industry 4.0?

Overall, we’re still in the early days of Industry 4.0 when you consider the overall vision, which involves much greater integration across existing and emerging technologies. Although it feels to many of us that Industry 4.0 has been here for many years now, in the grand scheme of things, the fourth industrial age is only just beginning. 

Some of the hype is real. But some of the hoped-for capabilities are yet to be realized. 

And many companies have yet to jump onboard. A Deloitte survey found that just 10% of companies surveyed had comprehensive Industry 4.0 strategies. And only 4% of surveyed executives said that integrating Industry 4.0 technologies was very important. 

That doesn’t mean you need to hit pause on your Industry 4.0 implementation or strategy, though.

What it means for manufacturers

Companies can certainly begin their Industry 4.0 implementation and lay the foundation with lower risk technologies that are well-established. If you’re realistic about the capabilities of newer technology, you can design your strategy and implementation to integrate and experiment with new innovations as they become available. 

As an early adopter, you’ll get to see the technology evolve before your eyes (and maybe even play a role in shaping it). You may get to enjoy the benefit of new technologies sooner, whether that’s greater efficiency, improved speeds, lower costs, or something else.

To look past the hype and understand what’s real, start with a solid strategy that’s realistic about what new technology can do. And be ready to experiment and integrate at the right time.

Looking for an Industry 4.0 solution that maximizes the capabilities of technologies available right now? OFS is an AI and IoT-enabled manufacturing monitoring solution that improves efficiency, reduces waste, and boosts profits. We’ve been around since 2006 (we’re older than the term ‘Industry 4.0’!) and companies all over the world use our integrated hardware and software to develop their own Smart Factory capabilities.

You can request a free 30 day trial or contact our team to discuss your specific requirements.