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Industry 4.0 -Digital Transformation, Challenges and Benefits

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The purpose of this paper is to study the basics of Industry 4.0, the trend towards automation and data exchange in manufacturing technologies and processes. This paper highlights the strategic roadmap that can serve manufacturers as a simple guide for the process of Industry 4.0 transition. Digital technology has transformed the industrial and manufacturing world. To keep pace with the fast-growing technological enhancements accompanying Industry 4.0, there is a great need to evolve and change the way we work. We now stand on the crossover of this new era, where machines acquire human characteristics, including cognitive capabilities. Therefore, the question is-Are we ready for Industry 4.0? In addition, what are the challenges that we will face in the near future? Index Terms-Industry 4.0, automation, challenges, benefits
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International Journal of Future Generation Communication and Networking
Vol. 13, No. 2, (2020), pp. 139 - 149
139
ISSN: 2233-7857 IJFGCN
Copyright 2020 SERSC
Industry 4.0 Digital Transformation, Challenges and Benefits
Monika Gadre Dr. Aruna Deoskar
Assistant Professor, BBA(CA), MIT WPU, Pune
Principal, ATSS CBSCA
Abstract
The purpose of this paper is to study the basics of Industry 4.0, the trend towards automation and data
exchange in manufacturing technologies and processes. This paper highlights the strategic roadmap that
can serve manufacturers as a simple guide for the process of Industry 4.0 transition.
Digital technology has transformed the industrial and manufacturing world. To keep pace with the fast-
growing technological enhancements accompanying Industry 4.0, there is a great need to evolve and
change the way we work. We now stand on the crossover of this new era, where machines acquire human
characteristics, including cognitive capabilities. Therefore, the question is - Are we ready for Industry 4.0?
In addition, what are the challenges that we will face in the near future? Index Terms Industry 4.0,
automation, challenges, benefits
I. INTRODUCTION
Modern industry has seen countless developments since the industrial revolution in the 18th century.
Manufacturing of goods, tools, clothes, weapons was manual, which changed in the end of the 18th century
with the introduction of manufacturing processes. The progress from Industry 1.0 was then rapid up to the
upcoming industrial era Industry 4.0. The emergence of Industry 4.0 has come up with the rapid
development of technology on one hand, and socioeconomic factors on the other. This paper provides an
overview of this evolution, along with its challenges and benefits.
(Source: www.thedualarity.com)
Industrial Revolution is a period of major industrialization and innovation where change from an
agrarian and handicraft economy to one dominated by industry and machine manufacturing had started.
Industrial revolution is the paradigm shift in production technology [1]. It has shaped the societies we live
II.
HISTORY OF INDUSTRY 4.0
Fig. 1 Journey from Industry 1.0 to Industry 4.0
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in today. The working conditions and lifestyles of the people have changed with the latest production
technologies. The history of industrial revolution has been explained below:
The period between 1760 and 1820 is referred as the first industrial revolution i.e. Industry 1.0. It
marked a transition from hand production methods to machines with steam and waterpower.
Industry 2.0, the second industrial revolution, the technological revolution is the period between 1870
and 1914. The main contributor to this revolution was the development of machines running on electrical
energy. The first assembly line where streamlining the process of mass production was also introduced,
which later on became a standard practice. The third industrial revolution or Industry 3.0 occurred in the
late 20th century. It is also known as digital revolution because of the extensive use of computer and
communication technologies in the production process.
Industry 4.0, or as is originally termed - “Industrie 4.0” [2] was the concept that originated in Germany.
Industry 4.0 is a national strategic initiative from the German government through the Ministry of Education
and Research (BMBF) and the Ministry for Economic Affairs and Energy (BMWI). It aims to drive digital
manufacturing forward by increasing digitization and the interconnection of products, value chains and
business models. Industry 4.0 leads to the digitalization era.
Industry 4.0 is the turning point to end conventional manufacturing. It resulted in merging the boundaries
of physical and the virtual world to create Cyber Physical Systems. [3] Industry 4.0 means connectivity,
and it will give an opportunity to change the way industry responds to the needs of society. Unlike previous
industrial revolutions were led by innovations in manufacturing processes and systems, the advancements
of Industry 4.0 are driven by smart, interconnected, pervasive environment.
Following table gives a summary of the four industrial revolutions, period and the features of each:
Table 1: Industry 1.0 to 4.0
Industry
Revolution
Period
Features
Industry 1.0
1760-1840
Water and steam powered
mechanical manufacturing
Industry 2.0
1870-1914
Mass production
using electricity
Assembly line division
of
labor
Industry 3.0
20th
century
Digital Revolution
Extensive use of Computers
Industry 4.0
21st
century
Virtual System, Cyber
world, Internet of Things,
Artificial Intelligence
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Fig. 2 Industry 4.0 - fusion of the physical and virtual worlds
III. LITERATURE REVIEW
As per National Science Foundation's (NSF) report 2017, the development of Industry 4.0 will likely
follow an incremental approach in growing from the existing technologies. There has been an exponential
progression in researches and publications on Industry 4.0 by academicians and Industrial experts.
However, there are certain grey areas related to industry 4.0, which need great attention and can be the
opportunities for further research.
Several research opportunities have been identified and presented below:
Table 2: Findings based on studied literature
S.No
Findings
1.
Industry 4.0 A Glimpse (Saurabh Vaidya,
Prashant
Ambad, Santosh Bhosle) [4]
Nine components of Industry 4.0 - Autonomous
robots, big data, augmented reality (AR),
additive manufacturing, cloud computing, cyber
security, IoT, system integration, and simulation
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2.
India’s Readiness for Industry 4.0 (Global
Innovation & Technology Alliance (GITA)) [5]
Digital technologies are reshaping the
industries in India
Tremendous opportunities for
manufacturers to optimize operations quickly
and efficiently Need for a highly trained and
flexible workforce
3.
Industry 4.0 technologies: implementation
patterns in
manufacturing companies [6]
(Alejandro Germán, Frank Lucas Santos,
Dalenogare
Néstor Fabián Ayala)
There is a gap between existing manufacturing
units and the one needed for Industry 4.0
Need for Internet-connected machinery to
monitor and improve manufacturing process.
4.
Smart factory for Industry 4.0: A review (Elvis
Hozdić) [7]
Smart factory is highly digitized and
connected production facility
Smart factory is an integral part of
Industry 4.0 It helps improve quality, enhances
productivity and cost effective.
IV. OBJECTIVES OF THE STUDY
The objective of the study is:
1. To understand what is Industry 4.0.
2. To identify the challenges of Industry 4.0.
3. To explore the benefits and applications of Industry 4.0.
V. BUILDING BLOCKS OF INDUSTRY 4.0
Industry 4.0 is the integration of data, artificial intelligence, machinery and communication. To create
an efficient industrial ecosystem, industries must be both automated and intelligent. However, the
technologies that are the foundation for Industry 4.0 are already in use in manufacturing industries.
However, integrating them together will enable to transform the production with Industry 4.0.
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(Source: Report from the Boston Consulting Group (BCG)) KPMG-AIMA Report (2018) defines
the technology levers or enablers for Industry 4.0 [8], as under:
1. Internet of Things (IoT): establishes a connected value chain by networking machine to machines.
2. Cloud Computing: provides huge storage, networking and computational capabilities enabling
interaction between technologies.
3. Big Data and data analytics: creates capabilities to support intelligent and real-time decision-making,
and reducing the downtime and wastage.
4. Additive Manufacturing or 3D Printing: Reduces leadtime from product design to release, permitting
customization, and small batch production in a costeffective manner.
5. Augmented Reality: Uses mathematical modelling, artificial intelligence and virtual reality to enhance
business generation.
6. Robotics: Improves efficiency through automated manufacturing processes.
7. Cyber security: ensures secured communication protocols enabling data security.
8. Machine Learning: exploits industrial sensors and instruments to record and communicate data directly
with software.
9. Simulation: the imitation of the operation of a real-world process, which would help to visualize the
design and identify the problems that might occur in a much earlier stage.
Fig.
3
Pillars of Industry 4.0
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VI. CHALLENGES OF INDUSTRY 4.0
Many opportunities are waiting for Industry 4.0 to take shape. Industry 4.0 will affect all sectors and
disciplines therefore there is a need to address the below listed pain points
[9]. According to McKinsey, “Industry 4.0 disrupts the value chain and requires companies to rethink the
way they do business. They need to drive the digital transformation of their
business to succeed in the new environment.” [10]
Following are the major challenges faced in the implementation of Industry 4.0:
Table 3: Challenges of Industry 4.0
S. No
Findings
1.
Huge investment - With the emergence of Industry 4.0, industry’s functioning has become more
processdriven, which demands for large investment for smooth digital transition and transformation
[11]. In addition, in training the existing workforce.
2.
Need to consider new business models -With Industry 4.0, companies are in a new industrial
paradigm wherein there is a need to transform the way we interact with the customers, understand
business cases, changing operations for manufacturers and how customers receive and engage with
products. [12]
3.
Resistance to change - There is need to examine the company culture and enhance the flexibility
in adopting the change for the good. There is lack of courage to launch the radical digitalization
plan.[13]
Fig.
4
Challenges
of Industry 4.0
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4.
Reorganizing the processes- For Industry 4.0, there is a need to automate and integrate horizontal
and
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VII. BENEFITS AND APPLICATIONS OF INDUSTRY
4.0
The emerging Industry 4.0 technologies can entirely transform the manufacturing value chain. The
benefits of digitalization are noteworthy from enhanced production efficiency to innovative product and
services deployment. Like digital transformation, the benefits of Industry 4.0 will ultimately help a business
become smarter and more efficient.
vertical value chains. Therefore, it is essential
to understand where there is a need for action
[14]. In addition, it is required to conduct pilot
study to leverage better outcomes.
an average, companies expect to reduce
operational costs by 3.6% p.a., while
increasing efficiency by 4.1% annually.
[20]
2.
Revenue gains
Through optimization and automation
efficiency and productivity is enhanced
5.
Workforce- Current technological trends are
bringing about the change at an
unprecedented rate and there is a lack of in-
house talent to meet those changes. To
improve quality and efficiency it is essential
to develop and train the existing employees as
the skill sets, they possess are getting
obsolete. New categories of jobs will emerge
and there is a need to hire new breed of tech-
savvy employees. According to the 2018
Global Trends report released by World
Economic Forum, 76% of recruiters and
hiring managers think that Industry 4.0 will
have a significant impact on the recruitment
industry. [15]
3.
Improved supply/demand
With the availability of real time demand
and supply are improved
4.
Reduced machine downtime
Improved productivity
Predictive maintenance
5.
Quality products
Customized as per requirements
Monitored and rectified in every
phase of manufacturing Quality control
6.
Standardization - The world is undergoing a
digital transition phase that will enter and
change all areas of industry. Industries require
norms and standards to ensure that the
individual components are compatible and
interoperable. [16]
6.
Speed of delivery
Use of 3D printers for faster
prototyping, reducing the cost of
engineering and speeding up time to
market
Reduce variability of operations
7.
Data Management - Industries are
generating a lot of real-time production and
quality data. There is a need to make data
readily available and accessible.[17]
7.
Customer Satisfaction
Tailor made and personalized products
Identifying new value generating services
8.
Competition- Increasing competition is
driving an integration between the customer
and manufacturer at various stages of
product.[18]
8.
External factors Government
incentives to promote Industry 4.0.
Smart Advanced Manufacturing and
Rapid Transformation Hub (SAMARTH)
- Udyog Bharat 4.0 is an Industry 4.0
initiative of Department of Heavy
Industry, Government of India under its
scheme on Enhancement of
Competitiveness in Indian Capital Goods
Sector.
[21]
9.
Data security - Industry 4.0 deals with large
amount of data. To achieve the true potential
of Industry 4.0 security is a major concern. It
is essential to implement end-to-end
encryption to avoid
vulnerability, phishing and various other
attacks.[19]
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To summarize, here are the key benefits of Industry 4.0:
Table 2: Key benefits of Industry 4.0
Industry 4.0 aims to increase productivity and profits by using machines and intelligent components
connected to the internet.
Following are the application areas of Industry 4.0:
interconnected services,
combining operational
technology (OT) with
Information Technology
(IT)
customized products[23]
S.No
Key Benefits
1.
Cost
Significant reduction in production
cost due to minimized wastage and automation
to prevent errors
Reduced labour costs
Boost in labour productivity
According to 2016 Global Industry 4.0 Survey,
on
S.No
Application
Areas
Benefits
1.
Internet of Things
To perform
digital
manufacturing.
Sensors provide date
to devices, robots,
simulations, and tools
2.
Embedded
System
shift from centralized to
decentralized product[22]
3.
Big Data and
Data Analytics
streamline production
process data
predict equipment failures
4.
Machine to
Machine
Communication
(M2M)
Data Collection,
Assessment of Data,
Actionable Data
5.
Cloud Solutions
network model of
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6.
End-toEnd
Software
Integration
Production lines
Logistics
7.
Simulation
Product Delivery
Assembly line production
8.
Additive
Production
(3D
PRINTING)
Mass production of
standard products
Customized
products
9.
Cyber Security
to track third-party
acceptance and risk
10.
Smart Sensors
Trend Monitoring
Optimization
Safer Data Storage
VIII. CONCLUSION
The main aim of this paper was to provide an overview of Industry 4.0, challenges and benefits of
implementing Industry 4.0. It was been found that Government and various private sectors are coming
forward and adapting to the latest trends in the technologies. Therefore, it is evident that Industry 4.0 will
bring substantial growth in the country’s economy, creating more opportunities in principal sectors like
agriculture, health, manufacturing and transportation.
Findings reveal that Industry 4.0 is key to the growth of sustainable business performance. However,
the structure and process of the organization must be supportive for implementing the latest technology and
get the maximum benefit from Industry 4.0. [24]
Industry 4.0 would certainly revolutionize the education sector. The future will belong to the ones who
are ready to accept changes and adapt technology like new rules of the game. Industry 4.0 in education
domain will be a beginning of new era where learning and exploring things would happen in a distinct way.
Disruptive technologies, driven by Industry 4.0 will greatly affect the future jobs. Indian universities
are not exactly the hotbeds of great ideas, innovation and entrepreneurial activities whereas globally
Universities are always welcoming the wave of change. Is India's higher education "relevant to the era"?
With the educational transformation, country will be able to reap the benefits better in times of Industry 4.0.
The government, industry and academia needs to collaborate to enable an Industry 4.0-ready workforce.
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Research in Advent Technology, Special Issue, March 2019
... In contrast, the present study proposes a novel MCDA framework to evaluate the companies' progress in terms of the identified challenges related to sustainability goals in order to help top managers redesign business models and strategies and to lead companies towards a sustainable transformation. In addition, Gadre and Deoskar [32] studied the current status of Industry 4.0 to figure out whether the world was ready for Industry 4.0 adoption. On top of that, the challenges to the adoption of Industry 4.0 were identified and analyzed. ...
... Privacy and Security (C 3 ) Data security and privacy risks could adversely affect the scalability of digital technologies [61]. Industry 4.0 copes with a considerable amount of data; thus, security is a significant concern in uncovering the true capability of Industry 4.0 [32]. Ervural and Ervural [62] mentioned that "it is vital to employ end-to-end encryption to avoid phishing, vulnerability, other attacks, enhancing cybersecurity and privacy." ...
... Gadre and Deoskar [32] mentioned that there is a lack of employees who are talented with respect to meeting the changes brought by current technological trends. New careers have emerged, leading companies to hire a new generation of tech-savvy workers. ...
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Purpose The rise of new information and communication technologies forms the cornerstone for the future development of work. The term Industry 4.0 refers to the vision of a fourth industrial revolution that is based on a network of autonomous, self-controlling, self-configuring, knowledge-based, sensor-based and spatially distributed production resources. All in all, different forms of the application of the Industry 4.0 concept can be observed, ranging from autonomous logistic transport systems drawn upon the idea of swarm intelligence to smart knowledge management systems. This paper aims to develop a theoretical framework to analyze different applications of Industry 4.0 on an organizing continuum. The general research questions are: What forms of organizing digitalized work lead to the reproduction of routines, and what forms foster innovation within Industry 4.0? The authors thus analyze the consequences of different forms of organizing work on workers’ perceptions and the results of the working process. Design/methodology/approach – This paper provides case studies for different stages of the organizing continuum in the context of Industry 4.0. The cases and a further analysis of all 295 funded projects are based on the Platform Industry 4.0 Map, which is part of the Industry 4.0 initiative of the German Federal Ministry of Economic Affairs and Energy and the German Federal Ministry of Education and Research. The consequences for people acting in such organizational and digitally supported structures are discussed. Findings A variety of applications of Industry 4.0 can be found. These applications mainly vary in the dimensions of the degree of formalization, the location of control authority, the location of knowledge and the degree of professionalization. At the right side of the organizing continuum, the digitalization organizes a work environment that supports highly qualified humans. They have broad leeway and a high degree of autonomy to design and create innovative forms of digitalization for tomorrow. At the left side of the organizing continuum, Industry 4.0 structures a work environment with narrow leeway, a low degree of autonomy and a top-down structure of control authority predetermined by digital applications. In this case, employees fill the gaps the machines cannot handle. Research limitations/implications As the paper focuses on Industry 4.0 developments in Germany, the comparability with regard to other countries is limited. Moreover, the methodological approach is explorative, and broader quantitative verification is required. Specifically, future research could include quantitative methods to investigate the employees’ perspective on Industry 4.0. A comparison of Industry 4.0 applications in different countries would be another interesting option for further research. Practical implications – This paper shows that applications of Industry 4.0 are currently at a very early stage of development and momentarily organize more routines than innovations. From a practical point of view, professional vocational and academic training will be a key factor for the successful implementation of digitalization in future. A joint venture of industry and educational institutions could be a suitable way to meet the growing demand for qualified employees from the middle to the right-hand of the organizing continuum in the context of Industry 4.0. Social implications – Industry 4.0 is designed by men, and therefore, humans are responsible for whether the future work situation will be perceived as supportive or as an alienated routine. Therefore, designers of Industry 4.0, as well as politicians and scientists, absolutely must take the underlying outcomes of digitalized work into account and must jointly find socially acceptable solutions (e.g. unconditional basic income to absorb negative societal effects of unemployment caused by digitalization). Originality/value This paper provides a promising avenue for future research on Industry 4.0 by analyzing the underlying organizational structures of digital systems and their consequences for employees. Moreover, the paper shows how Industry 4.0 should be organized to simply reproduce routines or to support innovation.
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