There should not be any doubt at this point that your organizations MUST undertake the journey towards building Industry 4.0 capabilities. But what will the journey look like? What should be realistic timelines? Where does your enterprise stand today vs. others in its journey toward Industry 4.0?

There have been many proposed stages of evolution toward Industry 4.0 capabilities, and all of them can be used to evaluate and plan your journey. Each of them has a different focus, but at a high level, they all seem to touch upon the same aspects. In this article, I will share my perspective and discuss the stages of the journey toward Industry 4.0 maturity.

Understanding the drivers first

Before we start exploring the journey, we need to understand the drivers of change behind Industry 4.0. At a high level, these are driven by two types of capabilities:

• IoT Enablers
• IoT Value drivers

Below is a pictorial representation of some drivers that fall within these capabilities.

Note from the illustration above that Sensors, devices, networks, etc., are just enablers, as I consistently emphasize in my posts. The real value drivers are what kind of solutions you develop leveraging the data generated by enabler platforms.

Stages of Evolution

Stage I: Connected Operations systems and processes

Companies see “Smart” manufacturing as a panacea, but the fact is that many studies indicate that just by implementing digitally automated manufacturing, companies can boost productivity by as much as 30 %. And what does Digitally automated manufacturing mean? It means a scenario in which embedded software enables the connected and intelligent applications, machines, products, and people that sustain a more operationally efficient enterprise, from manufacturing shop floors to executive leadership suites.

Most enterprises are halfway through only, even for this preliminary stage.  Research shows that around 40 percent of US companies consider their industries digital leaders, whereas, in Germany and France, not even 20 percent believe that. Note that this stage also covers the optimization of business operations through connectivity. This allows companies to create more customer touchpoints, thus driving revenues.

Stage 2: Developing new products and services

In this stage, many new products and services will start appearing, propelled by technologies like cloud computing and the commodification of analytics. Businesses will look further downstream to their final markets on the foundation of connected, operationally efficient manufacturing processes. Due to the proliferation of “Smart” products by then, companies will find a large clientele base, either consumers or other businesses, with a substantial appetite for intelligent products that can offer added services and value via embedded software.

Stage 3: Platform-enabled marketplaces

The connected products and services will be wise enough to sense customers’ needs at this stage. This will be the phase where connected product systems will replace connected products. By this time, products would have evolved from hardware to smart items to one that can serve as a platform. At this stage, companies should be able to create hyper-personalized offerings with entirely new levels of user experience.

Removing the final barriers in enterprise processes will also mark this stage. By embedding software in production machinery and products, meaningful and flexible business ecosystems can be built that can share risk and create integrated, cross-industry products and services.

Stage 4: The Automated Enterprise

This is the nirvana stage. This stage will be focused on further deepening and detailing digitally orchestrated smart manufacturing processes. It will be marked by autonomous control and full automation from end to end. This will mark the entire establishment of the IIoT across most industry sectors in the developed world.