Demystifying the Industry 4.0 | Venturus

Demystifying the Industry 4.0

The term “Industry 4.0”, although it has already become popular, still brings a lot of doubt. Most of those who use it, link it to highly technological factories and industries, in which virtually every process is autonomous – and often for this reason, they believe that it is a very distant reality. 

However, few actually know how to explain what is missing to adapt a factory to the 4.0 molds. And, to make it worse, they have no idea of the cost or impact that this change can cause in the production process. 

Here, I intend to demystify the ghost that surrounds the subject a little and show options on how to start the process. To do this, you first need to understand what, effectively, is Industry 4.0:


The name Industry 4.0 refers to the fourth industrial revolution. Each industrial revolution is marked by changes that were responsible for the significant increase in productive capacity. 

The first industrial revolution came from the late eighteenth century, primarily in the textile industrial sector in England. Its main characteristic was the use of steam powered mechanisms to aid the productive process. These mechanisms can be considered the first industrial equipment, responsible for effectively transforming cooperatives of artisans in the first industries. 

The second revolution began in the second half of the nineteenth century, initially in the United States and then in Europe. The predominant factor was the substitution of electrical and steam machinery, mainly affecting the metallurgy sector and then advancing to all productive sectors. 

In addition to the evolution in machinery capacity, there was also the development of administrative processes, idealized by the American Frederick Taylor (Taylorism) and widely used in the automotive sector, in particular by Henry Ford (Fordism). 

The third revolution occurred from the decade of 1970, having like reference country Japan. It started, mainly, from the automation of processes, using CNC (Computer Numerical Control) systems and other autonomous systems. 

With the adoption of these systems, the operator began supervising production (at least ideally), so that it does not need such extensive knowledge about the production process – it only needs to know how to operate and supervise production. This made the production process simpler, allowing greater malleability of the production line – the basis of the Toyotism system, developed in the Japanese motoring industry. 

The fourth industrial revolution, called 4.0, begins in 2010, when Germany decides to draw up a plan for its socioeconomic growth over the decade. This plan aims to guide the country’s development in the areas identified as of strategic interest to Germany in order to become a global reference country. 

From this, in 2013, the “Industrie 4.0 Working Group” is formed. In its final report, the group creates the concept of CPS (Cyber-Physical System), which becomes the fundamental concept behind the whole proposal of 4.0. 

Basically, CPS consists of a system that incorporates equipment, inventories and production into a global network, being able to exchange information between them, send commands and control each of these components independently. It is also defined the four main elements that need to exist to implement the proposal 4.0: 

  • Cyber-Physical System (CPS) – consists of the system responsible for interconnecting and managing all the systems of the plant, besides being responsible for eventual decision making; 
  • Internet of Things (IoT) – also known as remote sensing, consists of a network of sensors that collect production information and make it available to the CPS. If locally implemented, it allows the obtained data to be placed on local servers; if implemented in a network, it is possible to put the data in cloud servers; 
  • Internet of Services (IoS) – consists of a system to automate the service offer process. A sales system (via the internet) responsible for managing and generating, autonomously, orders for the production / distribution line; 
  • Smart Factory – The intelligent factory consists of facilities in which equipment and operators are aided by supervisory systems. The system identifies the production flow, indicates how and where each item should be followed, monitoring the entire production flow and generating the traceability of each item. 



Of course, unless you are building an industry from scratch and it is planned to fit the 4.0 molds, it is virtually impossible to transform a factory to fit that format in full. Thus, there is a suggestion of how this process could be implemented gradually, aiming at the smallest possible impact on the productive process: 

 Implementation of Smart Factory 

For the implementation of Smart Factories, it is not necessarily to replace all existing machinery with new and connected models, as most should think. Much more important is the development of a system capable of monitoring your production process. This system must be able to track the critical points of production, identifying what type of product is going through, production targets, quality standards and any other information that may need to be linked to the product. 

If the equipment available in production does not allow the system to see what is being processed, there are two options: change the equipment if there are significant advantages with the exchange; or the sensing of old equipment. 

Having defined parameters considered important, it is possible to develop fast designs to install sensors capable of identifying the product, consumption of inputs, production rating and any other appropriate metrics. All this data is sent to the system that will manage production. 

Once the production line has been updated, it is no longer necessary, for example, the use of paper to follow the product, indicating the order, quantity, procedures and other information related to it, as well as the data annotation of the product. process and data notes in existing management systems. 

The product is assigned an ID – whether it is a bar code, an RFID tag or any other means – generated by the system in order creation. All the product flow information in the process is controlled by the system, generating traceability, and any operator or equipment can consult such information directly from the system – either for simple process monitoring, identification of what needs to be done, or for verification of that no productive stage was accidentally skipped. 

 Internet of Things (IoT) 

With the supervisory system installed, it is necessary to monitor what is in the factory. The monitoring can be either of warehouses, for the inventory control of the available inputs and finished product, as well as equipment. In this second case, the monitoring can be done for both production control – as described in the Smart Factory process – and for monitoring the condition of the equipment, to assist in the maintenance process. 

The monitoring process – whether equipment or inventory – is defined based on the number of items monitored. If the goal is simply to monitor a few devices with a few dozen sensors in each, it should be possible to do this using an internet network, connecting the sensors directly to the network and creating an address for each one, by cable or via wi-fi . 

However, if the goal is to monitor the status of the final product during the storage process, the number of items monitored may be large enough to make this process prohibitive. Thus, it is necessary to use alternative monitoring means, creating a distinct network for communication of the sensors with a specific equipment to receive these signals, condition them and make them available to a server. 

Once the data is on the server, the system developed in the Smart Factory process passes the query to them whenever necessary. For example, it is possible to organize production orders according to the availability of raw material, as well as to develop systems to identify and / or separate the items needed to meet the selected production order. 

 Internet of Service (IoS) 

This element does not apply to all industry segments. However, when applicable, it will be responsible for managing the entry and exit of orders in the factory. 

In distribution systems, for example, it can be used to check what is in stock and generate estimates of delivery times. For factories, you can manage what you order, check what’s available in stock, check the company’s assumptions about the inventory volume for each item, and generate the sequence of production orders as well as purchase orders to replenish inventory required. 

In this system, it is also possible to develop a machine learning system that is able to monitor the production, purchase and time data and that allows an autonomous inventory management, based, for example, on control systems stochastic. In this case, a system modeling will be done that will use statistical approaches to the company data to adjust the purchase and storage volumes, in order to optimize spaces and costs. 

However, in order to apply such an approach, it is necessary that the acquisition system be installed in advance, generating a volume of significant data for the model created to be validated. 

 Cyber-Physical System (CPS) 

This system, in fact, ends up being developed in parallel with all the others. He will be responsible for integrating all the processes of the plant: analyzing the production process from the implementation of the Smart Factory; managing the inventory, equipment and all data obtained through IoT; and monitoring the inbound and outbound demands via IoS. 

In order to be able to fully monitor the production process, it is necessary for the CPS to be integrated with existing factory supervisory systems – unless one wants to develop a single system that controls everything, which is not often the case. In this way, the CPS is able to query items stored in the inventory via the available Warehouse Management System (WMS) or verify that the operator who will use certain equipment has been properly trained for this, via SAP or SharePoint. 

Finally, once the entire process is made available to the CPS, it is possible for it to generate reports with key performance indicators (KPIs) in real time, facilitating the decision-making process, both by managers, and by the system itself.


As said initially, making a factory fully compatible with the 4.0 concept is something extremely labor-intensive. It will probably require a significant investment and a long time for implementation. 

However, the adaptation can be done partially at the beginning. This option is significantly faster and requires less investment, allowing the return generated by the implemented process improvements to justify financially the next steps of the process. 

The sequence described above is generally the most indicated. However, depending on the level of automation, modernity and management of the plant and existing systems, some steps are likely to change. In some cases, it may even be possible to partially implement some of the steps described, at specific production sites, to correct point deviations. 

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