How Does Industry 4.0 Impact the Manufacturing Business? 


The term Industry 4.0 is used everywhere, but it seems like no one takes the time to explain what it is and how it works. In short, Industry 4.0 is a term used to describe the current 4th industrial revolution that introduces new technologies to improve existing business practices and increase efficiency.

The revolution revolves around artificial intelligence (AI) solutions and machine learning (ML) models that analyze operational data and improve existing practices. The manufacturing industry is the first to adopt these new technologies, so keep reading, and we’ll tell you more about the benefits it provides.

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Industry 4.0 Explained

Before we get to the benefits of the industry 4.0 model, let’s explain how it got its name and what it means. The term industry 4.0 was introduced by Siemens back in 2011. The focus of this revolution is to digitize traditional business processes using advanced technologies to replace obsolete analog machinery.

The revolution is currently underway, as more and more industries adopt technologies such as AI, Ml, and the Internet of Things. Companies that adopt this technology report a drastic increase in productivity and efficiency and significant cost reduction. 

The Technology Behind Industry 4.0

Well, most manufacturers install IoT sensors on all assets such as tools, machinery, and even entire production lines. These sensors generate operational data and feed it to the ML model that learns how the process works over time. Once it gathers enough information, it sends it to the AI that finds better solutions to existing processes to increase productivity and efficiency. Here’s a detailed overview of the main pillars of industry 4.0.

1. Big Data Analytics

Manufacturing practices generate massive amounts of data. Big data solutions are applied to filter the data and find areas in production that can need improvement. That leads to various advanced practices such as predictive maintenance, useful insights that open up new business opportunities, and many others.

2. Robots

Robots have been improving manufacturing for decades now. However, with an advanced AI behind the process, robots are more agile and can complete more complex tasks without human intervention.  Of course, that leads to a significant boost in product quality and efficiency.

3. Advanced Simulations

Manufacturers use CAD-powered software simulations to test their products in a virtual setting all the time. However, CAD simulations are not flexible, so manufacturers can’t test products in various simulations. Digital Twin technology is a subset of AI systems, and it’s much better for running simulations. It will help improve product quality, test its application in various settings, and eliminate product defects during production.

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4. IoT

The Internet of Things technology is one of the most revolutionary technological advancements ever. It connects all devices, machinery, and assets into a centralized network that allows managers to optimize the operation much easier. IoT technology creates a closed Wi-Fi network that connects all devices. That leads to a boost in cybersecurity and operational efficiency.

5. Cloud Computing

Cloud computing is the backbone of Industry 4.0. It’s a business model used by SaaS vendors, and it allows customers to use advanced software without investing in new hardware or IT systems. The software runs online, allowing remote team members to access and control the system. It’s far more cost-efficient and flexible than any on-premises solution.

6. Additive Manufacturing

Additive manufacturing technologies are becoming hugely popular among manufacturers all over the world. It allows them to use modern 3D printers to create accurate product models of any size. Manufacturers use the technology to test their product design and reduce manufacturing expenses.

Business Benefits of Industry 4.0 

Industry 4.0 in manufacturing provides all kinds of business benefits. It helps reduce employee downtime, it increases productivity, and it reduces costs. That leads to new business opportunities and higher revenues. Let’s look at the primary benefits provided by industry 4.0.

1. Higher Revenues

After you adopt these technologies, you will improve existing business processes and boost efficiency and revenues. Moreover, you will be able to make better business decisions based on real-world data generated by IoT sensors and embedded devices.

2. Cost Reduction

Industry 4.0 helps reduce the operational costs of most business processes. For example, predictive maintenance reduces overall maintenance costs by as much as 50%. It also comes with shorter downtimes during repairs, so it helps save some money there too. Moreover, it improves equipment uptime by 20% and reduces other costs such as hardware, repair parts, software updates, etc.

3. Saves Time

Once you adopt the technology behind Industry 4.0, you will be able to use automation to improve processes and increase efficiency. Moreover, since AI will control most manufacturing processes, your employees will have more time to focus on other more important work. 

4. Increased Workplace Safety

Smart IoT sensors are designed to gather operational data such as machinery vibrations, temperature, productivity, etc. They can also detect hazardous gasses, faulty machinery, and other potential dangers. Whenever it detects a hazard, the AI will notify the manager allowing them to alert employees on the factory floor. That helps reduce injuries and improve workplace safety.

5. Competitive Advantage

Another benefit of using AI to streamline business processes is getting an advantage over your competition. You will be ahead of all businesses that have not adopted new technologies yet, which can give you a huge competitive advantage. You’ll have faster time-to-market times, better product quality, and increased efficiency.

6. Risk Reduction

The human factor is responsible for most hazards and injuries during manufacturing. After you automate most processes, your workers won’t have to complete as many tasks, which will reduce the number of errors, improve the productivity of employees, and reduce overall risks.

7. Increased Collaborative Capabilities

AI provides centralized access to data and operational information, making it an ideal solution for improving teamwork and communication between departments. All team members will have access to information to plan projects, optimize the supply chain, improve production rate, and increase sales. Your departments will get a platform where they can work together to improve strategies and product design.

8. Better Customer Experience

AI-powered chatbots are the next step in providing your customer with the help they need. Chatbots answer simpler customer inquiries, taking the load off of your live agents. Moreover, they are active 24/7, so you can provide help around the clock. Most chatbots support multiple languages, allowing you to reach out to customers almost anywhere in the world. Lastly, since AI can help improve product quality according to your customer’s needs, you will also boost customer satisfaction that way. 


While implementing industry 4.0 comes with certain challenges, it provides all kinds of long-term benefits that will help you increase productivity and efficiency. AI, ML, and IoT sensors will work together to help prepare your business for the future.

The sooner you adopt these new technologies, the more advantage you’ll have over your competition. Industry 4.0 is designed to revolutionize existing manufacturing practices, and it’s doing a fantastic job so far.