An outcome of digital transformation, it blends technologies to create custom solutions and make better use of resources

At its heart, Industry 4.0 is digital transformation applied to manufacturing – bringing with it all the change, opportunities and challenges that represents.

Industry 4.0 connects the supply chain and the ERP system directly to the production line to form an integrated, automated and, potentially, autonomous manufacturing processes that make better use of capital, raw materials, and human resources.

At the moment, Industry 4.0 is a bit of a fuzzy concept because it goes well beyond just connecting machines to other machines or automating another step in a production line with a robot, said Ned Hill, an economist at The Ohio State University who focuses on manufacturing and economic development.

“Everything that takes place currently within the ERP, you’re going to need to … understand how that ends up feeding into your production process itself,” said Hill. “All of [a manufacturer’s] equipment has to be integrated into their supply chain. So there is everything from purchasing to delivery to the way in which stuff gets stacked to go into the plant. All of that is going to be tied-in wirelessly. And traceability across the entire process to finished goods is also going to be part of this.”

Industry 4.0 will empower manufacturers to redesign their operations and processes so they can be reconfigured as needed to produce multiple variants of a product like the sole of a running shoe or a cup of yogurt, or to produce one-off bespoke products without the need for manual intervention.