< Insights

Industry 4.0 and Digital Transformation: learn how one thing can lead to another

  • Digital Transformation

Have you ever wondered how your company can achieve better results and benefit from Industry 4.0 and Digital Transformation concepts?

‘Industry 4.0’ and ‘fourth industrial revolution’ have been widely used when the topics addressed are new technologies, intelligent systems, or disruptive evolution.

IoT, big data, autonomous robots, cloud computing, cybersecurity, additive manufacturing, simulators, systems integration, augmented reality, 3D printing, cryptocurrencies. These are some words we have to become familiar with if we want to look to the future of our industry. After all, where did all this come from?

What is Industry 4.0?

The term “Industry 4.0” or “Smart Manufacturing” emerged in Germany in 2012 in a specific context: a project to modernize and improve local industries, integrating high technology into industrial production processes.

In this scenario, companies, universities, and the government began to work together, using technological knowledge and innovation as engines for economic development.

As a result, new forms of automatic communication between production components were developed, real-time monitoring means were improved, and human intervention in the production process was reduced.

Those movements established the principles of what we know today as the “fourth industrial revolution.” They applied the high technology concepts (real-time operation, virtualization, decentralization, modularity, and service orientation) to the traditional industrial sector. 

Essentially, this new industry revolutionized the production lifecycle by changing manufacturing processes, design, operations, and systems. It is all about merging the digital and physical worlds.

In other words, everything in and around an operating plant (suppliers, distributors, factories, products, and consumers) is now digitally connected, providing a highly integrated value chain.

This trend has spread worldwide, resulting in the growth of production efficiency, reduction of production costs, agility in the processes, and, mainly, increased revenues.

Some countries in Europe, the USA, and China already have proposals for the continuous adoption of technologies and elements of this new industry in their industrial plans. By 2025, the analysts predict that these new processes will significantly reduce equipment maintenance costs and energy consumption and increase work efficiency by around 10% to 25%.

The consequences of Industry 4.0

Other reflections of the fourth industrial revolution can be seen in how technology has come to compose our society: we have developed new ways of relating, consuming, and living.

It is not just about incorporating new technologies into our daily lives; it is about significant changes in socioeconomic structures, as well as organizational, cultural, and behavioral patterns.

Once again, the physical and digital worlds merge, incorporating the biological universe. This is what we know as Digital Transformation.

More and more new approaches, behaviors, and attitudes of consumers and markets have been considered the basis for the generation of Customer-Centric ideas and strategies, which influence the creation of products and services based on providing profound relationship experiences. The barriers of vertical communication were broken, and the focus shifted to the interaction between companies and consumers.

The immense mass of information and solutions available to the consumer public allows for in-depth and facilitated knowledge about products and services, which requires companies in the digital age to constantly improve their relationship with their customers to maintain their competitive edge.

In addition, capturing consumers’ attention allows companies to obtain information about the habits, preferences, and behaviors of the public to set strategies that maintain the relevance of their brand and a consistent online presence that generates engagement.

It is not enough to be found; the companies must be remembered mainly for providing an excellent consumer experience. In this scenario of constant adaptation to consumer behavior, companies in the digital age face the challenge of transforming themselves to remain in the market and satisfy their customers.

Understanding changing markets and customers is critical to understanding the importance of digital transformation.

Be part of Industry 4.0

Some studies indicate that by 2025, 40% of traditional companies, regardless of size or business model, will cease to exist due to the inability to adapt to the digital age.

In this sense, the evolution of digital thinking is essential to ensure the survival and adaptation of companies to market configurations, which requires new ways of managing products, projects, teams, and people.

The company needs to be fully involved in allowing the digital transformation process to be efficient, encompassing the adaptation of culture and business to new technologies.

Strategies for the evolution of digital business thinking must be built considering cultural, procedural, and human factors. It is not just about adopting new technologies or automating processes but about a significant change in the mental model and concepts of the company and people.

The sooner companies understand the needs and desires of the market and know how to transform this knowledge into actions, the more promising results they will have in the digital transformation processes.

Industry 4.0 Principles

Some practices can be implemented to make it possible to increase the digital IQ in companies, opening up new business possibilities and making them capable of generating more innovation and improving their results. Consider the following principles:

1) Enable easy access to information by adopting broad and agile communication practices.

2) Keep the different sectors of the company integrated to promote collaboration and harmony of work.

3) Adopt data-based decision-making and performance monitoring practices.

4) Explore the available digital technology to use tools to support management and decision-making.

5) Encourage support to explore new ideas, allowing business areas to have the autonomy to prototype, test, improve and scale innovation.

6) Create routines for constant learning and updating, allowing for greater engagement.

7) Invest in improving and automating internal operational processes to make work simpler or more efficient.

8) Despite the advantages and the wide dissemination of the concepts of the digital age, most companies do not have a consistent plan for the inclusion of digital transformation in their realities.

Industry 4.0 is happening now, and its effects are already being felt in all economic sectors, so companies that are just watching the consequences of the digital age will become obsolete in a short time.

It is worth remembering that companies can obtain the advantages of this transformation from any segment that proposes developing structures and cultures that absorb these advantages.

The sooner companies adopt the digital lifestyle, the greater the chances of creating opportunities in the face of uncertainties and being one step ahead in reinventing themselves and staying relevant in the market.

Are you ready for the digital age? Tell us the most considerable difficulties of implementing digital transformation here in the comments! If you need help embarking on the era of Industry 4.0, call our experts and learn how we can help.

Insights from our team

Get insights from our team of experts on software development methodologies, languages, technology and more to support your team in business operation and strategy.