{"id":1136,"date":"2019-07-01T15:08:13","date_gmt":"2019-07-01T15:08:13","guid":{"rendered":"https:\/\/sage-new-clone.local\/en-au\/blog\/?post_type=sage_glossary&p=1135"},"modified":"2026-05-18T23:55:22","modified_gmt":"2026-05-18T13:55:22","slug":"what-is-industry-4-0","status":"publish","type":"sage_glossary","link":"https:\/\/www.sage.com\/en-au\/blog\/glossary\/what-is-industry-4-0\/","title":{"rendered":"What is Industry 4.0?"},"content":{"rendered":"
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\n\t\t\t\t\t\tWhat is Industry 4.0?\t\t\t\t\t<\/h1>\n\t\t\t\t<\/div>\n\n\t\t\t\t\n\t\t\t\t\n\t\t\t\t\n\t\t\t<\/div>\n\n\t\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t<\/div>\n\t\t
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Industry 4.0<\/h2>\n\n\n\n

Commonly referred to as the fourth industrial revolution, Industry 4.0<\/a> refers to digital transformation in manufacturing and other industries like distribution, transportation, oil and gas, and utilities.<\/p>\n\n\n\n

What is Industry 4.0? It can be characterised by the bridging of the physical and digital in \u2018cyber-physical\u2019 systems. Industry 4.0 includes the partial transfer of autonomous decision-making to cyber-physical systems and machines.<\/p>\n\n\n\n

With Industry 4.0, innovative technology trends such as big data<\/a>, artificial intelligence (AI)<\/a> and the Internet of Things (IoT)<\/a>come together. This can lead to the creation of \u201csmart factories<\/a>\u201d that use data from connected operations and production systems to learn and adapt to new demands.<\/p>\n\n\n\n

Industry 4.0 is creating new business and production models, industry standards, best practices and technology which allows top-performing manufacturers to separate themselves from their competition. Manufacturers can combine intelligent automation<\/a> with analytics, creating a productive and efficient manufacturing environment.<\/p>\n\n\n\n

Industry 4.0 can support manufacturers in reaching set goals for profitability\/margin growth, modernisation of business systems, better customer service, and the introduction of new products and services. It has necessitated a change in processes, business models, and even the way production and delivery are handled.<\/p>\n\n\n\n

Industry 4.0 is comparable to digital transformation<\/a> in that it\u2019s not something which happens overnight. Businesses need a strategic and staged approach that might start small with initial projects, to more innovative, advanced and ambitious moves.<\/p>\n\n\n\n

Through modernisation, leading companies can implement improvements across their operations, helping them compete. This includes streamlining processes to be more productive, improving collaboration across the organisation and supply chain and delivering products to grow a customer base.<\/p>\n\n\n\n

There are significant challenges in integrating Industry 4.0 with the day-to-day operations of a business. Modern Enterprise Resource Planning (ERP)<\/a> has the capability to facilitate these changes, which are essential.<\/p>\n\n\n\n

Modern ERP must embody the goals of a modern manufacturer, supporting technologies that allow efficient, agile and automated processes. Leading companies focus on technology capabilities such as decision-making, agility, and collaboration.<\/p>\n\n\n\n

According to Aberdeen Group, leading manufacturers are more likely to have real-time visibility<\/a> into the status of all processes. For example, using sensors<\/a> as part of an IoT strategy, manufacturers can trigger alerts that trigger changes in production or maintenance schedules. Enhanced visibility can provide valuable insight leading to more informed decisions.<\/p>\n\n\n\n

With the technical advancements of Industry 4,0, manufacturers can better trace materials, monitor quality and compliance and understand the components of profitability, leading to them becoming more informed and productive.<\/p>\n\n\n\n

Manufacturers must not wait to begin Industry 4.0, as competitors will already have begun opportunities. Businesses must prioritise the biggest challenges they face and work out how cloud, analytics, and the IoT can fit into a new business reality. Businesses must ask themselves questions such as:<\/p>\n\n\n\n

\u2022 Where are their processes lacking?<\/p>\n\n\n\n

\u2022 Is it taking too long to get products to market?<\/p>\n\n\n\n

\u2022 Is it taking too long to react to demand trends?<\/p>\n\n\n\n

\u2022 Are resources overburdened?<\/p>\n\n\n\n

Industry 4.0 is only the most recent change in manufacturing, and innovation must be ongoing. Business models, processes and regulations change, and so must technology foundations.<\/p>\n\n\n

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