East West Manufacturing Blog

What Manufacturers Need to Know About Industry 4.0

Written by Patty Rasmussen | June 21, 2017

You’ve heard the phrase, right? Industry 4.0

But do you know what it means?

McKinsey defines it as “the next phase in the digitization of the manufacturing sector, driven by four disruptions."

  • The exponential upsurge of data, computational power and connectivity
  • Development of analytics and business-intelligence capabilities
  • Human-machine interactions (think touch screens and augmented reality systems)
  • Enhanced ability in transferring digital/virtual commands to the physical world (i.e. 3D printing, advanced robotics)

In other words: How can manufacturers apply technological advances to their industry?  Which opens a Pandora's box of other questions including:

  • How can things like artificial intelligence, cloud computing or connected devices lead to better manufacturing processes — in production and in systems?
  • What sort of technology infrastructure is required and how much will it cost?
  • When will I see results and what’s the return on investment?

It's a huge topic with plenty written on the subject. Here are six factors that will require attention for manufacturers that want to harness technology to increase their ability to participate in the Industry 4.0 playground:


What used to be available to only the biggest, baddest customers — large scale computing — is now available to all. Simply put: The cloud is a great democratizer, offering robust and scalable IT capabilities to all enterprises, regardless of size.


The cyber-world is still a bit like the Wild West, and it can be difficult to tell the good guys from the bad guys. Multi-layered security is essential, and requires backup capability in the event of crashes or incursions – natural disasters and man-made.



Transparency across corporate divisions, locations and operations breaks down barriers to collaboration. The net result is greater agility, innovation and responsiveness in problem-solving, internally and externally (see next point).


If you haven’t heard the term “UX” yet, trust me, you will. It stands for “user experience" and is defined as a focus on a “deep understanding of users, what they need, what they value, their abilities and their limitations.” Just as operational transparency develops collaborative relationships internally, a manufacturer focused on UX does business relationally. They ask, “What does my customer want to achieve and how can I help?” The relationship is customer-driven, and tends to result in high rates of satisfaction.


In 1974, Burger King declared war on McDonald’s with the slogan, “Have it your way.” Rather than serving burgers with a blob of ketchup, mustard, two pickles and a sprinkle of onions, customers were encouraged to order their burger the way they liked it.

Similarly, technology like 3D printing has made it possible for companies to personalize a greater range of products than ever before. No longer relegated to just prototyping, 3D design software and better materials give manufacturers short production run capability. Even better, as 3D printers become portable and less expensive, customers from the Space Station to the service station can print their own replacement parts.


Don’t get me wrong, integrating technology into the fabric of your company is vital, but not at the expense of further innovation that builds up your competitive advantage. A report from Accenture found discusses the “technology debt” of companies that are so heavily invested in their current usually outmoded tech system that they lose whatever advantage it once gave them.

“While business and the markets are cyclical, technology is not,” the report reads. “Innovation does not look back. That is why it is imperative for organizations to shed systems and behaviors that are relics of the recent past. Moving forward in the digital world requires the ability to maneuver easily and accelerate toward one’s goals.”


Look, everyone wants a formula for success. But the fact is, transformation doesn't come easy, and it usually doesn't come cheap. Investing in technology is as much a philosophical commitment as it is fiscal. Nevertheless, Industry 4.0 is here. Are you in? 

Read more: 

How IoT Intersects with HVAC and What It Means to You

4 Digital Technolgies Disrupting Procurement Organizations