Enjoy a 15% discount on all purchases until the 31st of March 2023 using the promo code EOFWEB22 at check out!

B2B Explore insights impacting the B2B environment, including production and supply network, and the trends that are evolving the global consumption of ingredients and packaging materials across a changing consumer goods marketplace.

Industry 4.0: Penetrating Digital Technologies Reshape Global Manufacturing Sector

Justinas Lasinskas Profile Picture
Justinas Lasinskas Bio

The traditional manufacturing process typically consists of three parties: the physical manufacturer; suppliers; and services providers. These parties are usually fairly unconnected and have independent operations, which creates a lot of inefficiency in the supply chain and turns into lost opportunities. Fortunately, development of the fourth industrial revolution, the Industry 4.0, which emphasises digital technologies, such as cloud computing and IoT (Internet of Things), is expected to decrease this inefficiency, as well as refurbish the whole manufacturing supply chain.

This article is part of the global briefing Industry 4.0: The Future Impact of the Fourth Industrial Revolution, which analyses preparedness and implications for the adoption of the fourth industrial revolution.

More complex manufacturing structure to simplify operations

The emergence of Industry 4.0 will be followed by Digital Production, which will transform the manufacturing process as we know it today. This means physical production, through cloud computing, will be connected to digital systems and other players in the supply chain. Digital production will enable the virtual manufacture of products, sense potential issues and communicate these problems to the system, as well as choose the optimal way to manufacture products.

Currently, similar functions are fulfilled by employees, but they lack flexibility and are based on extensive calculations and preferences, etc. Digital production, carried over cloud computing and other technologies, on the other hand, is flexible and can arrange production on-the-go and choose the best way to fulfil an order.


Computer services led by cloud computing will drive the changes

The manufacturing sector remains one of the main investors in computer and related services. The share of the manufacturing sector in total IT services’ capital purchases (GFCF) stood at 10-30% of total investments over 2010-2015. Notably, this figure was higher in developing countries, which were acquiring large-scale foreign direct investments in the manufacturing sector. However, as investment flows to such countries dries up, this share is starting to evaporate. The contrary can be said about innovating countries, which saw IT investments rise in importance over 2010-2015.

Computer and Related Service Purchases by Manufacturing and Other Buyers and Their Dynamics over 2010-2015

Source: Euromonitor International from national statistics

In recent years, developed countries have witnessed notable shift towards innovation in communication technologies, which are seen as a primary future driver of modern economies. Particularly this has been evident regarding spheres like cloud computing, the IoT and the 5G internet, which are poised to become the major driving technologies of the Industry 4.0.

Cloud computing can be called the most important of the three, as it envelops the essence of Industry 4.0. Cloud computing has been expanding at double digits over recent years globally, primarily boosted by SMEs seeking cost reductions on their IT bills. The manufacturing sector has however still been waiting for appealing proposals from technology companies. With Industry 4.0 gaining ground, this is about to change and cloud-based solutions like IIoT (Industrial IoT) are expected to surge in demand.

Major constraints remain unresolved but long-term potential is high

Many issues remain, however, regarding the implementation of technologies like cloud computing in manufacturing operations. Most of these issues are technological, such as security issues surrounding cloud computing networks, uninterruptable 5G internet connection and the absence of common standards. In addition, there is a lack of understanding about how Industry 4.0 can help businesses. Recent studies on cloud computing and Industry 4.0 have shown that businesses in developed countries still have little idea about Industry 4.0, are unsure how these technologies can transform processes and are concerned about data protection.

Over recent years, large efforts to reduce obstacles have been notable. For instance, all of the major telecom infrastructure developers have been working on the launch of 5G equipment by circa 2020, which will create a field of high-speed connectivity for manufacturers to work on, while in Europe, the Alliance for Internet of Things Innovation (AIOTI) was established in 2015 to standardise the development of cloud technologies.

As a result of these restrictions, it is estimated that it will take around five years for the Industry 4.0 revolution to really kick in. Major work will take place in the development of cloud networks with trustable connectivity, while policy makers will have to ensure no constraints exist to adopt these technologies. Developed countries that invest in research and development should be at the forefront of the industrial revolution and thus benefit the most from it, as they have the enforced data protection laws, developed internet infrastructure and tech-savvy population.

Interested in more insights? Subscribe to our content

Latest Insights

Unwrapping Sustainable Packaging

Jorge Zuniga 17 March 2023

Shop Our Reports

Beyond Beer and Soda: Cans and the Future of Beverages Packaging in the Americas

The metal beverage can is gaining ground rapidly in the beverage industries of both Latin and North America. Cans continue to grow share in their core…

View Report

Global Industrial Trends

This report provides a global overview of industrial trends from 2022 through to 2027 for the key manufacturing and service sector industries. Insights analyse…

View Report

The Need for Ingredient Diversification in Foods

In 2022, the combination of COVID-19, geopolitical tensions and increased climate events deepened disruptions to food supply. Combined with mounting health and…

View Report
Passport Our premier global market research database with detailed data and analysis on industries, companies, economies and consumers. Track existing and future opportunities to support critical decision-making across all functions within your organisation Learn More