Introduction to Industry 4.0: Understanding the Concept, Evolution, and Key Technologies Shaping Industry 4.0

1.1 Defining Industry 4.0

The term Industry 4.0 was introduced in 2011 at the Hanover fair in Germany, where it was used for denoting the transformation process in the global chains of value creation.

Industry 4.0 refers to the fourth industrial revolution, which represents a significant shift in the way industries operate and manage their processes. It is characterized by the integration of digital technologies, data-driven decision-making, automation, and the convergence of physical and digital systems. Industry 4.0 encompasses several technological advancements, including the Internet of Things (IoT), artificial intelligence (AI), cloud computing, big data analytics, and cyber-physical systems (Eswaran, et al., 2024).

Industry 4.0 includes business processes in industry that envisage organization of global production networks on the basis of new information and communication technologies and Internet technologies, with the help of which interaction of the production objects is conducted (Pachouri, et al., 2024; Zezulka, Kaczmarczyk, & Schroeder, 2018).

1.2 The Basic Characteristics of Industry 4.0

• i.

  transition from manual labor to robotronics, which ensures automation of all production processes;

• ii.

  modernization of transport and logistical systems, due to mass distribution of unmanned vehicles;

• iii.

  increase of complexity and precision of manufactured technical products, manufacturing of new construction materials due to improvement of production technologies;

• iv.

  development of inter-machine communications and self-management of physical systems, conducted with the help of IoT;

• v.

  application of self-teaching programs for provision of constant development of production systems.

1.3 Significance of Industry 4.0

• i.

  Improved Efficiency and Productivity for Competitive Edge: Industry 4.0 technologies enable businesses to streamline their operations, reduce downtime, and increase overall efficiency and productivity.

• ii.

  Data-Driven Decision-Making leading to better performance: The abundance of data generated by connected devices and systems allows for informed decision-making and predictive maintenance, optimizing resource allocation and performance.

• iii.

  Customization and Personalization according to customer preference: With the help of AI and data analytics, companies can tailor products and services to individual customer preferences, enhancing customer satisfaction.

• iv.

  Supply Chain Optimization: Real-time data and connectivity enable better supply chain management, reducing lead times and costs.

• v.

  Cost Reduction: Automation and predictive maintenance can lead to cost savings in production and maintenance.

• vi.

  Innovation and New Business Models: Industry 4.0 fosters innovation by enabling the development of new products and services, as well as the creation of entirely new business models.

• vii.

  Global Connectivity and extensive reach: Businesses can connect and collaborate with partners and customers globally, expanding market reach.