Smart Factory

Industry 4.0 and the emergence of a smart factory

When all the important components in a factory are networked, this is called a smart factory. In an era of connected things and the Internet of Things, this plays a particularly large role for industries. This is why this “fourth phase of the industrial revolution”, in which so many things are changing for industrial production processes due to the fusion of digitalization with traditional processes, is called Industry 4.0.

These industrial changes are based primarily on the following principles:

  • People, machines and things are connected in physical and virtual areas (Internet of Things).
  • Tools and systems use collected data to increase the efficiency and flexibility of production.
  • Virtual tests before production can increase the quality of the products and introduce the product to the market more quickly.
  • Planning, production, manufacturing and maintenance are supported and controlled by artificial intelligence and data. Thus, information and communication technology are used to create an intelligent network of machines and processes.

The result of these changes are intelligent value chains and product life cycles. These range from optimized development to manufacturing, assembly, product delivery and maintenance and end in recycling.

Companies on the way to become a Smart Factory
For companies, there are a variety of ways to use this intelligent connection of machines and information technology and become a smart factory:

  • Networked production: Many different companies are involved in the manufacturing process of a product. It is easier to plan the production and the usage of machines in the most economical way if everything is connected.
  • Flexible factory: Future production lines can be built in modules so that they can be quickly assembled for other tasks. This improves productivity and efficiency and manufacturing of individualized products in small quantities at affordable prices is possible.
  • Customer-oriented solutions: producer and consumer move closer together and it and it becomes possible for customers to design their products themselves (e.g. designing parts of sneakers). Products that have already been delivered can send data to the manufacturer, who can use this for further product improvements.
  • Improved logistics: Machines report on their own when they need new material and ideal delivery routes can be calculated automatically. This enables an optimal flow of goods.
  • Data is used in the best possible way: data from production processes and product properties are linked, evaluated and analysed. This provides indications for more efficient product design and offers a basis for new business models and services (e.g.: predictive maintenance)
  • Conservation of resources: products are observed over their entire life cycle and designed in a way that they can be recycled. This leads to a sustainable circular economy.

Important key points on the way to Industry 4.0
Digitisation and networking within Industry 4.0 is creating many interfaces between different players. For this reason, uniform norms and standards, data protection, IT security and legal framework conditions are essential. The Guiding Principles 2030 for Industry 4.0 emphasize sovereignty, interoperability and sustainability as central guiding principles and show how the global, digital ecosystems of the future can be designed.


Cf. Gabler Wirtschaftslexikon, Industrie 4.0, accessed: 18.05.2020

Cf. Verein Industrie 4.0, Was ist Industrie 4.0, accessed: 18.05.2020

Cf. Alexander Thamm GmbH, Das Internet of Things und die Industrie 4.0: Wie Smart Factory & Co. die Wirtschaft verändern werden, accessed: 18.05.2020

Cf. Bundesministerium für Wirtschaft und Energie, Was ist Industrie 4.0, accessed: 18.05.2020

Cf. Industry of things, Was bedeutet Industrie 4.0? accessed: 18.05.2020