Industry 4.0

1. Unit V
Industrial
Revolution

2. Fourth Industrial Revolution

3. Industrial Revolution
Britain came in to introduce machines into production by the end of the 18th century (1760-1840). This included going from manual production to
the use of steam-powered engines and water as a source of power.
First Revolution
The second one dates between 1870 - 1914 and introduced pre-existing systems such as telegraphs and railroads into industries. The
electrification of factories contributed hugely to production rates. The mass production of steel helped introduce railways into the system, which
consequently contributed to mass production.
Second Revolution
Third industrial revolution is dated between 1950 and 1970. The third revolution was, and still is, a direct result of the huge development in
computers and information and communication technology.
Third Revolution
Machines will operate independently, or cooperate with humans in creating a customer-oriented production field that constantly works on
maintaining itself. The machine rather becomes an independent entity that is able to collect data, analyze it, and advise upon it.
Fourth Revolution

6. Future challenges in I4.0
A huge issue for many enterprise who wish to implement Industry 4.0 is a buying strategy that is less than clear for a lot of them. As a
result, there are often unclear economic incentives for implementation, and organizations find themselves having to spend over the odds
to implement these new initiatives
Investment
Bringing together manufacturing automation and Smart Factories will bring unprecedented levels of efficiency and speed to a business, but
the downside of this is that many companies will see a workforce that will be unused to the new developments taking place, and ill-
equipped to adapt to them
Workforce
It requires to publicize the data, whereas before industries could use their own in-house data. This puts them at risk of having their
intellectual property stolen by larger organizations, and causes small organizations to hesitate
Data Security
The challenges faced by industry 4.0 should not only focus on the application of new technologies through the improvement of mechanic
and robotic processes; it should also optimize other areas: logistics, customer service, management, etc., through the use of analysis
systems and software development

7. Future challenges in I4.0
Customers are increasingly demanding and have more information on their hands to make decisions. Knowing their needs through
new marketing strategies and data analysis is another big challenge
Competition Concern (comprehensive understanding of the customer)
Operation focuses on providing machines with the ability to see, detect and communicate smartly. This aspect is characterized by
the supervision of production systems, and allows for the detection of failures or errors,
Challenge of sensor technology
• New business models—the definition of a new strategy
• Rethinking your organization and processes to maximize new outcomes
• Helping your organization to understand where action is needed

8. COIN(Collaborative Innovation)
• A positive form of working with others
• A positive and purposeful relationship between organizations
• Performed by number of companies that create and support a service or product
• A process in which organizations exchange information, alter activities, share resources for mutual
benefits
• Collaboration goal is to enable individuals and organization to work together more effectively
• Essential to connect the ingenuity gap and innovate the changes needed for sustainability
Characteristics of Collaboration

9. COIN(Collaborative Innovation)
• Trust
• Time
• Planning
• People
• Learning Together
• Decision Making
• Vision
• Planning
• Flexibility
• Leadership
• Technology
• Communication
Factors affecting Collaboration

10. COIN(Collaborative Innovation)
•Synergy
• Overcome Obstacles
• Effective representation
• Avoid duplication
• Share resources
• Accessing to funding sources
• Access to constituents
•Community awareness
Benefits of Collaboration

11. COIN(Collaborative Innovation)
• Innovation is a dynamic process through which problems and challenges are defined, new and creative
ideas are developed, and new solutions are selected and implemented.
Innovation

12. COIN(Collaborative Innovation)
• A Collaborative Innovation Network (COIN) is a group of self-motivated people with a collective
vision, enabled by the web to collaborate in achieving a common goal by sharing ideas, information
and work
• Collaborative Networks have the ability to bring new ways of thinking, diverse perspectives and
people from different backgrounds outside the paradigm that created the problems to the table to
innovate new solutions
• Collaborative Networks enhance communications within organizations
• Creativity and collaboration are the central tenets of collaborative networks
• COIN Combines six types of networks., Work, Social, Strategy, Learning, Innovation, Knowledge
Collaborative Innovation Network

13. COIN(Collaborative Innovation)
• Members of Collaborative Innovation Networks are self-organized as cyber-teams. These teams
connect people through the Internet enabling them to work together more easily by communicating not
through hierarchies, but directly with each other.
• Creator-Guru: provides the overall vision and guidance “ Salesman”
• Knowledge expert: serves as the ultimate source of explicit knowledge “Maven”
• Collaborator Expediter: coordinates and organizes tasks, form the glue of a COIN
• Communicator, Ambassador: Links to external networks, help carry new inventions to their tipping
point “Connector, Gatekeeper
Member Types

14. COIN Characteristics
COINs collaborate under as
strict ethical code
COINs innovate through
massive collaborative
creativity
COINs communicate in direct
- contact networks
COINs communicate in direct
- contact networks
Steve Jobs, Larry Page and
Sergey Brin, Mark
Zuckerberg
There is no formal leadership
A COIN can be seen as a
knowledge network that
primarily operates through the
Internet
They did what they thought
would be the right think
There aren’t CEOs but Chief
Creators

15. COIN advantages
Helps to build organizations that are more creative,
productive and efficient by applying principles of creative
collaboration, knowledge sharing and social networking.
COINs can be leveraged to develop successful products in
R&D
COINs build high performing teams
COIN-enabled organizations demonstrate more efficient
leadership, culture, structure and business processes.
COINs establish better project management processes
COINs grow better customer relationships

16. COIN(Collaborative Innovation)
• The Digital Divide ; Not everyone has access to the Internet
• External Cultural Barriers ; Older generations resist to the flat structure
• Intellectual Property Concerns ; difficult for new innovation models to compete
• Technological Barriers ; Lack of transferable data, information, software compatibility
• Internal ; Vision, Lack of motivation, Communication, Trust, Organizational constraints
Barriers to COIN

17. • Creation of cyber-physical systems of mass production with minimum participation of
human
• Full authomatization of production and everyday non-intellectual processes with the
help of block chain technologies
• Authomatization of intellectual processes with the help of neuron networks
• Full elimination of human from active economic operations with its replacement of new
technologies, equipped with artificial intelligence and Internet of Things.
Stages of Formation of I4.0

18. USA(United States of America)
• In the USA, interest to Industry 4.0 is explained by social goals and changes. Formation of
digital society raises demand for further development of innovational technologies, among which
robototronics is of the highest interest.
• At present, the US government has to solve a serious social contradiction related to striving for
overcoming the unemployment and become the leader in the global competition of industrial
innovations.
• In Industry 4.0, this contradiction is solved with the help of creation of highly intellectual jobs for
servicing robototronics, which will allow overcoming the initial unemployment and satisfying the
growing needs for opening the creative potential
of American workers.
Formation of I4.0

19. UK(United Kingdom)
• In In the UK, close attention in the aspect of strategic management of the process of Industry 4.0 formation is paid to
transformation processes in the market. Deep change of consumer expectations and preferences under the influence of
the process of development of Industry 4.0 is expected in this country.
• The 2016 sociological survey of British industrial companies showed that 74% were not ready for transition to Industry
4.0 and experienced serious worries due to its formation. At the same time, 42% of British companies said that they
tracked the course of formation of Industry 4.0 and had high commercial interest in it. In the macroeconomic aspect, the
UK government expects large growth of the unemployment level (more than by 30%) as a result of formation of Industry
4.0. At the state level there are discussions on “creation of ‘New England’ in the conditions of the Fourth Industrial
Revolution”, in which Internet of Things, cyber-physical systems and “clever plants” are to be used.
• First successes are expected in the sphere of artificial intelligence and unmanned
cars. However, here we speak of long-term forecasts. High expectations of the government regarding unfavorable social
consequences (primarily, growth of the unemployment level) and unreadiness of industrial companies cause slow rate of
formation of Industry 4.0 in the UK, which will lead to visible macro-economic changes only in 10–20 years
Formation of I4.0

20. Germany
• In Germany, Industry 4.0 is the basis of the national strategy of development of industry. Germany started
implementing this strategy in 2013; by 2025, serious results are expected—increase of gross added value by $14.8
billion in car industry, $23 billion—in machine building, $12.1 billion—in production of electric energy, and 12%—in
chemical industry. Germany featured the highest readiness (as compared to other studied countries) for the process
of starting Industry 4.0.
• The German Government did not stop at compilation of forecasts but set the people who were responsible for
practical implementation of specific measures. Thus, the Ministry of Economy and Energy is responsible for
stimulating sectorial cooperation during implementing the initiatives in the sphere of Industry 4.0, the Federal
Ministry of Education and Science—for stimulating scientific R&D in the sphere of Industry 4.0.
• The Federal Ministry of Labor and Social Affairs regulates employment and stimulates increase of living standards
of German specialists to the level that is necessary in Industry 4.0. The Federal Ministry of the Interior is responsible
for provision of security of data in Industry 4.0, the Federal Ministry of Justice and Consumer Protection—for
protection of consumers and confidential information during consumption of products of Industry 4.0, and the
Federal Ministry of Transport and Digital Infrastructure—for formation and support for necessary infrastructural
provision of Industry 4.0
Formation of I4.0

21. JAPAN
• The Japanese Strategy of formation and development of Industry 4.0 is oriented at gaining
advantages related to optimization of social systems, business-Processes, and production of
technologies and equipment, by formation of transport, electric energy, medical, and
industrial networks. At that, the main load on formation of Industry 4.0 in Japan is set on
private business—the government’s national strategy urges companies to develop and adopt
long-term strategies of their development (for future 5–10 years) in view of their contribution
in formation of Industry 4.0.
• Japan entered the path of formation of Industry 4.0 later than other studied countries, so in
its national strategy of development of Industry 4.0 it uses the initiatives of other countries.
The Japanese government set the goal of formation of Industry 4.0 as overcoming other
countries and supporting high global competitiveness of its socio-economic systems in the
long-term
Formation of I4.0

22. Process of Industry 4.0 formation in different countries

23. Economic Reality
• Industry 4.0 will preserve the trend of reduction of prices for industrial goods. As a result, marginality of
productions will reduce, and centers of profit will move to IT corporations that implement technologies. If the
country does not have its own suppliers of technologies, the companies will have to use foreign suppliers.
• Goods and services of Industry 4.0 have higher functionality and quality, but have zero threshold
expenditures. Due to digital globalization, the Fourth Industrial Revolution will enable certain people and
society to obtain access to required products in all countries of the world. This will lead to increase of demand
and economic growth.
• The current trends show that prices for goods will continue reducing, and share of digital companies and IT
corporations in GDP will continue increasing, as they will become the main centers of cost formation.
Economic reality in I4.0

24. Economic Reality
• Manufacturers of industrial products from various countries of the world plan to invest into development of Industry 4.0
$907 billion per year until 2020. The World Bank and General Electric estimate that Industry 4.0 may bring $30 trillion for
the global economy.
• Industry 4.0 is based on mass distribution and implementation of a lot of new technologies, which will lead to global and
deep changes in all spheres of society’s life.
• Thus, it is expected that Industry 4.0 will have the fundamental influence on the global economy and will influence all
large macro-variables: GDP, investments, consumption, employment, trade, inflation, etc.
Economic reality in I4.0

25. Economic Reality
1. Self-optimization and self-adaptation of cyber-physical systems” the means of self-optimization and self-
adaptation, endogenous adaptation of the system’s goals to changing external influences, which conforms to the tasks
of activities and ensures effective correction of the system’s behavior. Reliability of such cyber-physical systems will
grows substantially, as they will be more reliable against temporary errors.
2. Man-machine symbiosis: growing complexity of intellectual systems set high requirements to natural and
intuitively understandable man-machine interfaces. Flexible setting for developer ensures consecutive and well-
structured interaction, which supports convenience of usage of technical systems.
Main directions of changes

26. Economic Reality
3. Intellectual networks (artificial intelligence): intellectual technical networks consist of a lot of closely
connected and complex systems which connection leads to global changes in production. Global optimality of
production system becomes a result of connection of local decentralized sub-systems.
4. Energy efficiency: cyber-physical systems allow determining and using reserves of economy of electric, heat,
and other energy from the stage of design to exploitation, changing the structure of costs along the whole chain
of formation of product’s cost.
Main directions of changes

27. Measuring Technology Upgrading
Framework For Measuring Technology Upgrading
Technology upgrading is a multidimensional process. It is multi-level process which means that it is micro, mezzo
and macro grounded but which also means that at its core is structural change in various dimensions: technological,
industrial, organizational.
There is degree of overlap between industry and technology upgrading as some industries are based on more
complex technologies than others. In that respect, technology upgrading is about changes in technology intensity
but equally about structural change. In fact, these two are inextricably linked. These two dimensions – technology
upgrading and structural change – should be considered jointly with the way economy integrates itself in global
value chains which are today an important determinant of technology upgrading.
•Dimension 1 (vertical axis) which is about intensity of technology upgrading as depicted by different types of
innovation activities
•Dimension 2 (horizontal axis) which is about spread or width of technology like diversity of technological
knowledge, types of supporting infrastructure and organizational capabilities of firms which are the main carriers
of technology upgrading
•Dimension 3 (diagonal axis) which depict knowledge inflows into economy through a variety of forms like trade,
FDI and GVC.

28. Measuring Technology Upgrading
Framework For Measuring Technology Upgrading

29. Measuring Technology Upgrading
Framework For Measuring Technology Upgrading
Intensity and types of technology upgrading (scale)
Production capability
Production capability is capability to produce with given level of technology at world levels of efficiency or productivity. This requires primarily
good operational efficiency. The key workforce to operational efficiency is skilled technicians or blue-collar workers. A more complex capability is product and
process engineering, which involves improvement in existing products and processes.
Technology capability
A developed technological capability indicates capacity to significantly change product and processes through organized innovation process. There is
not sharp boundary between production and technology capability but we can assume that technology capability is about development, not necessarily about
research. A first stage of development is advanced development or prototype for manufacture which should be distinguished from exploratory development which
is about prototype in a system
Research & development
R&D is usually considered as the major component of innovation and therefore one of the major drivers of growth. Research and development are
usually treated as one category though this seems to be mainly due to statistical convention rather than belief that research and development are indeed similar
categories. The Frascati definitions are not specific enough to allow an R&D project to be classified accurately by conventional type (basic, applied and
development). Under technological capability we capture patents as they have intended commercial application. However, R&D has far broader aims and its links
to growth and productivity is far from straightforward.

30. Measuring Technology Upgrading
Framework For Measuring Technology Upgrading

31. Measuring Technology Upgrading

32. ICT Infrastructure
•Used as an extended synonym for information technology (IT).
•Refers to the convergence of audio-visual and telephone networks with computer
networks.
•Term ICT became popular in 1997 and was First used by academic researchers in 1980.
•ICT and education today.
ICT Convergence
•INTERNET (source)
• WIRELESS NETWORK
• CELLPHONES
• REALTIME COMMUNICATION
• INSTANT MESSAGING
• VOICE OVER INTERNET PROTOCOL (VOIP)
• VIDEO CONFERENCING
• SOCIAL NETWORKING ( Facebook, twitter, whatsapp,etc)

33. Benefits of ICT
Large Storage: Large amount of data can be stored on
compact storage devices which allows organization's to cut down on office space.
• Quality Information: Data stored in digital form can be quick and flexible.
• Better Presentation: ICT allows organizations to present information about itself in a
visually impressive manner.
• New Services: ICT can enable an organization to provide services that it previously
could not.
• New communication methods: ICT has opened up a wide range of new
communication methods.

34. Drawbacks of ICT
Capital Investment: Setting up a computer based system
cost money.
• Over Dependence: Organizations have become over
dependent on ICT.
• Staffing Difficulties: Introducing new ICT systems often
means the retraining of staff or in some cases employing of
special staff.
• Security Issues: ICT provides a range of ways to gain
access to your personal details.
• Lack of Body Language: Communication through voice
chat or instant messaging does not take body language into
account.

35. Thank You