Industry 4.0

2013 – In April, in Germany the following report was published: ‚Umsetzungsempfehlungen für das Zukunftsprojekt Industrie 4.0, Deutschlands Zukunft als Produktionsstandort sichern‘ (Recommendations for changes in favor of the future project: Industry 4.0; to safeguard the future of Germany as an industrial nation.). The report of the Working group Industry 4.0 (‘Abschlussbericht des Arbeitskreises Industrie 4.0‘) contains the results of a study of the future developments in industry, the challenges that will come along and the strategy of industry, science and government together that will safeguard that the German industry will stay competing and wins new markets with new products. The working group had an assignment of the Ministry for Education and Research (Bundes Ministerium für Bildung und Forschung)  andconsisted of people from industry and science.

Strengths of German Industry

Germany has one of the most competitive manufacturing industries in the world and is a global leader in the manufacturing equipment sector. This is due to Germany’s specialization in research, development and production of innovative manufacturing technologies and the management of complex industrial processes. Germany is strong in machinery and plant manufacturing industry, has a globally significant level of IT competences and  know-how in embedded systems and automation engineering. Germany is thus uniquely positioned to tap into the potential of a new type of industrialization: Industrie 4.0. 

The fourth industrial revolution

The first three industrial revolutions came about as a result of mechanization, electricity and IT. Now, the introduction of the Internet of Things and Services into the manufacturing environment is ushering in a fourth industrial revolution. In the future, businesses will establish global networks that incorporate their machinery, warehousing systems and production facilities in the shape of Cyber-Physical Systems (CPS). 

Smart factories

The smart factories that are already beginning to appear employ a completely new approach to production. Smart products are uniquely identifiable, may be located at all times and know their own history, current status and alternative routes to achieving their target state. The embedded manufacturing systems are vertically networked with business processes within factories and enterprises and horizontally connected to dispersed value networks that can be managed in real time – from the moment an order is placed right through to outbound logistics. In addition, they both enable and require end-to-end engineering across the entire value chain. 

The potential of Industry 4.0 for business and society

Smart factories allow individual customer requirementsto be met and mean that even one-off items can be manufactured profitably. In Industrie 4.0, dynamic business and engineering processesenable last-minute changes to production and deliver the ability to respond flexibly to disruptions and failures on behalf of suppliers, for example. End-to-end transparency is provided over the manufacturing process, facilitating optimized decision-making. Industrie 4.0 will also result in new ways of creating value and novel business models. In particular, it will provide start-ups and small businesses with the opportunity to develop and provide downstream services.

In addition, Industrie 4.0 will address and solve some of the challenges facing the world todaysuch as resource and energy efficiency, urban production and demographic change. Industrie 4.0 enables continuous resource productivity and efficiencygains to be delivered across the entire value network. It allows work to be organized in a way that takes demographic changeand social factors into account. Smart assistance systems release workers from having to perform routine tasks, enabling them to focus on creative, value added activities. In view of the impending shortage of skilled workers, this will allow older workers to extend their working lives and remain productive for longer. Flexible work organization will enable workers to combine their work, private lives and continuing professional development more effectively, promoting a better work-life balance. 

A dual CPS strategy

In order to bring about the shift from industrial production to Industrie 4.0, Germany needs to adopt a dual strategy. Germany’s manufacturing equipment industry should seek to maintain its global market leadership by consistently integrating information and communication technology into its traditional high-tech strategies so that it can become the leading supplier of smart manufacturing technologies. At the same time, it will be necessary to create and serve new leading markets for CPS technologies and products.

In order to deliver the goals of this dual CPS strategy, the following features of Industrie 4.0 should be implemented:

  • Horizontal integration through value networks
  • End-to-end digital integration of engineering across the entire value chain
  • Vertical integration and networked manufacturing systems   

The journey towards Industrie 4.0 will require Germany to put a huge amount of effort into research and development. In addition, attention should be paid to the new social infrastructures in the work-place that will come about as a result of Industrie 4.0 systems, as well as the continued development of CPS technologies. The Industrie 4.0 Working Group believes that action is needed in the following eight key areas:

  1. Standardization and reference architecture:Industrie 4.0 will involve networking and integration of several different companies through value networks. This collaborative partnership will only be possible if a single set of common standards is developed.  A reference architecture will be needed to provide a technical description of these standards and facilitate their implementation.
  2. Managing complex systems:Products and manufacturing systems are becoming more and more complex. Appropriate planning and explanatory models can provide a basis for managing this growing complexity.
  3. A comprehensive broadband infrastructure for industry.
  4. Safety and security. It is important to ensure that production facilities and the products themselves do not pose a danger either to people or to the environment. At the same time, both production facilities and products and in particular the data and information they contain – need to be protected against misuse and unauthorized access. This will require, for example, the deployment of integrated safety and security architectures and unique identifiers, together with the relevant enhancements to training and continuing professional development content.
  5. Work organization and design:in smart factories, the role of employees will change significantly. Increasingly real-time oriented control will transform work content, work processes and the working environment. Implementation of a socio-technical approach to work organization will offer workers the opportunity to enjoy greater responsibility and enhance their personal development. For this to be possible, it will be necessary to deploy participative work design and lifelong learning measures and to launch model reference projects.
  6. Training and continuing professional development:Industrie 4.0 will radically transform workers’ job and competence profiles. It will therefore be necessary to implement appropriate training strategies and to organize work in a way that fosters learning, enabling lifelong learning and workplace-based CPD. In order to achieve this, model projects and “best practice networks” should be promoted and digital learning techniques should be investigated.
  7. Regulatory framework:  Whilst the new manufacturing processes and horizontal business networks found in Industry 4.0 will need to comply with the law, existing legislation will also need to be adapted to take account of new innovations. The challenges include the protection of corporate data, liability issues, handling of personal data and trade restrictions. This will require not only legislation but also other types of action on behalf of businesses – an extensive range of suitable instruments exists, including guidelines, model contracts and company agreements or self-regulation initiatives such as audits.
  8. Resource efficiency:  It will be necessary to calculate the trade-offs between the additional resources that will need to be invested in smart factories and the potential savings generated.


‚Umsetzungsempfehlungen für das Zukunftsprojekt Industrie 4.0, Deutschlands Zukunft als Produktionsstandort sichern‘, Abschlussbericht des Arbeitskreises Industrie 4.0. (April 2013). The full report in German in attached.

The full English version of the report is available at:

Themes: Innovation and  Innovation capabilities, Workplace innovation

Sector: High tech and smart materials

Bron: Report