Why Industry 4.0 is so Important

Until recently, supply chains were mainly measured by efficiency metrics. Today’s world presents complex challenges and puts the supply chain at the center of not only business success but also of a company’s differentiation strategy. Supply chains need to become resilient in times of high volatility in demand and supply as witnessed during the pandemic. A resilient supply chain is able to quickly respond and to recover from unanticipated events.


Manufacturing companies face numerous challenges. They need to increase productivity while producing individualized offerings with highest quality in a constantly changing environment due to varying customer demand and sourcing complexities. Global competition and cost pressures force many companies to continually optimize business operations to stay profitable. Lack of visibility and agility are barriers to sensing, predicting, and responding to disruptions. Increasingly regulations especially in sustainability and in life sciences (such as good-manufacturing-practices and FDA compliance) require companies to rethink their business processes. Technological advancements such as artificial intelligence, e-mobility,  autonomous driving and hyper-automation make digitalization a necessity.

Many companies recognize Industry 4.0 as a strategic priority to turn these challenges into opportunities creating tangible business outcomes leading to increased productivity, revenues, and profitability:

  • Increased ability to deliver on customer demand and expectations
  • Increased productivity of assets and people
  • Higher agility and visibility to respond to changing environments
  • Improved time-to-market and agility for customization of products
  • Sustainable operations meeting societal demands
  • New revenue streams through business model innovations
  • Coverage of industry specific needs, for example, segment of one for industrial machinery and component or compliance to regulations for pharma companies
  • Higher visibility across logistics operations with condition and status tracking
With Industry 4.0 the entire industrial environment is fully digitalized connecting the physical world of engineering, manufacturing and supply chain with enterprise business information, processes and systems. This enables agile, predictive business steering through autonomous machines connected to each other and connected to business systems. Data in (near) real-time is collected, processed, and shared from machines, vehicles, and people through sensors and devices. Enriching this data leveraging artificial intelligence and combining it with business data create meaningful information across sales, service, engineering, manufacturing, logistics to improve the business.
Companies that had implemented Industry 4.0 best practices prior to the pandemic found themselves better positioned to respond to the pandemic crisis.

According to a study conducted by MPI 2 companies implementing Industry 4.0 realize tangible improvements, for example:

  • More than 10% increase in profitability by 21% of companies and more than 5% by 42% companies
  • An increase in product quality by 56% of companies
  • An increase in customer satisfaction by 43% of companies
Companies successfully deploying Industry 4.0 focus on business value not technology, mobilize and train their workforce on new technologies and processes, and move toward an integrated IT infrastructure and automation technology stack. And they manage the company by data-driven processes rather than transactional processes.

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