Industry 4.0: The Big Picture



industry-4-0-icons.jpgAs the saying goes, a picture is worth a thousand words. Those who have attended webinars or read case studies about Industry 4.0 over the past few years will likely agree that the jargon associated with it can easily exceed a thousand words. To clarify some of the mystification surrounding Industry 4.0, let’s dive deeper into the “big picture” of the true purpose behind this technology revolution.

Many believe Industry 4.0 is first and foremost about specific technologies or use cases. While technologies and use cases are a means to an end, they are not the end in and of itself. The fundamental purpose driving Industry 4.0 is to achieve business goals, such as cost reduction, quality improvement, increased throughput, etc., through the application of the following six design principles:

  1. Interoperability
  2. Virtualization
  3. Decentralization
  4. Real-time Capability
  5. Service Orientation
  6. Modularity

These principles are at the core of information technology (IT) and operating technology (OT) convergence as well as the emergence of cyber-physical systems. In other words, they are the linchpin between business goals and technology solutions.

These six principles and their relation to Industry 4.0 are further explained below.

In order to enable smart manufacturing, you must first bridge together aspects such as people, standards, work processes (man and machine) and more. To accomplish that, data and networks are essential. Everything must interoperate and interconnect. Examples of technologies supporting this interoperability include industry standard software and hardware protocols such as OPC UA (Open Platform Communications United Architecture), MTConnect and IO-Link.

Cyber-physical systems (CPS) must be able to simulate and create a virtual copy of the real world. They also must be able to monitor objects existing in the surrounding environment. Simply put, there must be a virtual copy of everything. One technology enabling virtualization is the digital twin, which is a virtual representation of a physical product or environment. The digital twin can be augmented by real-time process data and analytics based on accurate configurations of the physical product, production systems or equipment.

One of the core goals of Industry 4.0 is to bring autonomy and autonomous decisions to machines and CPSs, including the ability of CPSs to work independently. This creates a more flexible environment for production. This decentralization can be achieved through the use of Industrial Internet of Things (IIoT) Platforms, which are systems for connecting front-line industrial processes with back-end information systems. 

A smart factory needs to be able to collect, store and analyze real-time data and make decisions accordingly. This contributes greatly to the flexibility and the optimization of production. Real-time capability can be accomplished through the use of technologies such as sensors, 5G Networks and Manufacturing Execution Systems.

Production must be customer-oriented. People and smart devices must be able to connect efficiently through the Internet of Services to create products based on customers’ specifications. This is where the Internet of Services becomes essential. Embedding smart sensing, analysis and communication capability to products enables this service orientation and new business model revenues.

In a dynamic market, a smart factory’s ability to adapt to new market trends and changes is critical. To support this adaptability, computer-aided design tools can break down a product architecture into modules to meet unique customer needs. Artificial intelligence technology can then create rules for how these modules can be arranged. Finally, customers can interface with technologies that help them arrange their own product configurations from a portfolio of modules and choose the way they are assembled into a final product.

While technologies and use cases may be interesting fodder for webinars, conferences and case studies, it is more valuable to view the big picture of Industry 4.0 as a way to effectively achieve strategic business goals. While every Industry 4.0 journey will look different from manufacturer to manufacturer, they all begin with the same purpose in mind: to solve a specific business problem. Starting with an understanding of these six design principles and how they support operational improvements is key to identifying the biggest opportunities for improvement in your facility and ultimately ensuring your technology implementations are a success.

Whether your company is well into its Industry 4.0 journey or just getting started, The Center’s experts can help ensure you achieve the maximum return on all investments. To assist Michigan’s manufacturers with understanding and adopting Industry 4.0 technologies, The Center has partnered with the Michigan Economic Development Corporation (MEDC) and Automation Alley to drive awareness of the many uses and benefits of these innovations. From conducting an initial Technology Opportunity Assessment to identifying and applying relevant technologies, The Center guides manufacturers through technological implementations in a way that makes sense for their businesses.

Learn more about how The Center can support your company’s Industry 4.0 journey by contacting or visit


PHILLIPS_Scott-web.jpgScott Phillips, Industry 4.0 Program Manager
Scott Phillips is a Project Manager on The Center’s Industry 4.0 team. In his role, Scott drives awareness of Industry 4.0 technologies and opportunities to Michigan manufacturers through personalized consulting and training. Scott’s manufacturing experience, combined with his passion for Industry 4.0, enable him to effectively support manufacturers’ strategic technological implementations. 



Since 1991, the Michigan Manufacturing Technology Center has assisted Michigan’s small and medium-sized businesses to successfully compete and grow. Through personalized services designed to meet the needs of clients, we develop more effective business leaders, drive product and process innovation, promote company-wide operational excellence and foster creative strategies for business growth and greater profitability. Find us at

Categories: Advanced Manufacturing, Continuous Improvement, Industry 4.0, U.S. Manufacturing