What is Industry 4.0? Differences from Industry 3.0, advantages, disadvantages

• Industry 1.0 brought mechanisation through steam power and the loom, Industry 2.0 mass production on the assembly line.
• Industry 3.0 stands for automation through computers and electronics.
• Industry 4.0 extends this automation with the Internet of Things (IoT) and artificial intelligence.
• Its hallmarks are individualised products, the coupling of production and services, and semi-autonomous machines.

What are Industry 1.0, 2.0 and 3.0?

Industry 4.0 is based on a "future project" launched by the German government, which is about the intelligent networking of machines and processes in industry with the help of information and communication technology.

It is a further step after the previous versions of industry. Industry 1.0 saw mechanisation for the first time, through steam power and the loom. Industry 2.0 was characterised by mass production on the assembly line. Automation with the help of computers and electronics ushered in Industry 3.0.

What makes Industry 4.0 special

In Industry 4.0, the automation of Industry 3.0 is now extended further through the Internet of Things (IoT for short) and artificial intelligence.

This is characterised by the individualisation and hybridisation of products, i.e. a coupling of production and services. Customers and business partners are also integrated into the processes. This is achieved through embedded systems and semi-autonomous machines that make their own decisions.

What are the advantages and disadvantages of Industry 4.0?

Connecting machines, products and partners brings tangible benefits, but it also requires investment and new skills.

Advantages:

• More flexible production: individualised products down to small batch sizes without rebuilding production each time.
• Real-time transparency: machine, stock and order data are available continuously instead of in the monthly report.
• Predictive maintenance: sensor data reveals wear before a machine fails.
• More efficient processes: less downtime, less manual data entry, data-based planning of materials and inventory.
• New business models: products are combined with services, such as maintenance or usage as a service.

Disadvantages and challenges:

• High investment in sensors, software, connectivity and the integration of existing equipment.
• IT security: every connected machine is an additional point of attack.
• Data protection and data ownership, especially when customers and partners are integrated into the processes.
• Skills: employees need new qualifications for working with data and connected systems.
• Complexity and dependencies: the lack of common standards makes it harder for systems from different vendors to work together.

Whether the effort pays off depends on the specific use case. Most companies start with a manageable area whose benefit can be measured.

Where is Industry 4.0 applied?

There are many areas of application for Industry 4.0: from more flexible production and adaptable production lines in factories, through optimised logistics that calculates the best delivery routes on its own, to a resource-saving circular economy in which products are considered over their entire lifecycle.

One important pillar of Industry 4.0 is therefore Logistics 4.0.

What is Logistics 4.0?

Logistics 4.0 forms the basis for holistic, digital supply chain management and is a fundamental pillar for implementing Industry 4.0. Networked, decentralised subsystems such as vehicles and robots work together in real time and so find the best solutions efficiently.

Logistics 4.0 is used in all areas of logistics. One example is the Port of Hamburg: in the Mobile Objects Management project, industrial vehicles such as forklifts were controlled automatically, based on real-time data exchange with customers and suppliers.

Besides intelligent vehicles, containers and pallets, the range extends from intelligent stock measurements that trigger automatic replenishment to dynamic route finding and load optimisation in distribution. The technologies behind it:

• GPS, RFID, barcodes and QR codes
• Cloud and hybrid computing architectures
• Electronic Data Interchange (EDI) and the internet itself
• Big data and artificial intelligence, because vast amounts of data are processed, and with that also data protection

Logistics 4.0 is an ongoing process that keeps learning. This makes it possible to improve logistics KPIs continuously and increase competitiveness. An important pillar of Logistics 4.0, in turn, is Purchasing 4.0.