Is Your Company Ready for Industry 4.0?

The concept of Industry 4.0 arose in the light of information technology (IT) and has evolved rapidly due to the high demand for personalized products and the accessibility of new solutions. It is a digital transformation that merges technologies such as cloud computing, process automation, robotics, artificial intelligence, and big data, among others.

In the business world, the so-called fourth industrial revolution involves a comprehensive digital transformation focused on improving operational efficiency through connectivity throughout the supply chain to optimizing customer relationships, improving energy efficiency and customizing products. A smart factory is a production plant that uses Industry 4.0 technologies.

However, the implementation of Industry 4.0 now faces enormous challenges, such as a lack of technical skills, outdated equipment, and unclear strategic direction. Many organizations struggle to understand this technological revolution and comprehend how to prepare for digital transformation. Existing maturity models often focus too much on technology and overlook critical aspects of implementation, such as culture, leadership, and talent.

In response to the lack of tools and models capable of assessing the technological and organizational needs to integrate Industry 4.0, I published the paper “A Review of Industry 4.0 Assessment Instruments for Digital Transformation” (Applied Sciences, 2024), co-authored with my colleagues from the School of Engineering and Sciences at Tec de Monterrey, Miranda Zamora, Claudia L. Garay, and Rodrigo E. Peimbert. This research develops a digital transformation assessment instrument by analyzing existing tools and identifying the key components of Industry 4.0. To do this, we carried out a systematic review of the literature following the PRISMA methodology. Our analysis yielded some important findings for industry.

1. There are diverse tools and specific applications to evaluate digital transformation in Industry 4.0. Some of their functions are to:

• Guide companies through digital transformation
• Offer an assessment of process maturity
• Generate questionnaires and frameworks for practical assessment
• Analyze data utilization and support technology selection
• Demonstrate tool effectiveness through case studies
• Adapt models for services, operations/supply chain and Quality 4.0

2. Different dimensions are recognized that are crucial in guiding digital transformation, including:

• Strategy: Its objective is to make the organization more competitive through innovation culture, continuous improvement, the implementation of new IT, an efficient organizational structure, and client satisfaction. It is considered the “input” for the transformation of Industry 4.0 and includes the development of new smart products, services and business operations, as well as the promotion of collaboration between stakeholders.
• Workforce: Digital transformation requires the application and development of suitable technical and management skills. In addition, the willingness, autonomy, openness and flexibility of the workforce are fundamental aspects of rapid industry 4.0 changes.
• Leadership: Implementing a vision or strategy to encourage digital technology and its drivers is necessary, together with organizational alignment to adopt concepts of the fourth industrial revolution.
• Clients: Enhancing client satisfaction and their relationship with the company, and maintaining effective communication are essential.
• Smart factories and services: Technologies that promote real-time communication between machines, products, people, and infrastructure must be included. Smart factories are composed of smart sensors and actuators, embedded systems, and connectivity. Smart services present extensive digitalization and connectivity, and real-time information.
• Smart products: The implementation of products with embedded systems is the foundation for real-time data collection, promoting communication between customers, factories, and value-chain processes.
• Technology: The implementation of smart factories and processes requires the use of interconnected technologies (cyber-physical systems, the Internet of Things, big data, and cloud manufacturing, among others).
• Governance: Complying with rules and regulations and creating suitable structures to manage the organization’s operation.
• Operations: Managing, measuring, and controlling the company's processes and services, including technologies that enhance its productivity.
• Supply chain: It promotes visibility and connection between several business functions by implementing advanced technology across the supply chain. An integrated supply chain connects suppliers and customers, developing processes, capabilities, and systems to support digital collaboration.

3. Technological and organizational Industry 4.0 drivers are taken into account, including:

• Leadership
• Collaboration
• Vertical integration
• Data analytics and managements

4. The importance of data analytics and management being implemented correctly and considered to create the best practices for digital transformation is highlighted.
5. This study takes a holistic view of assessment instruments and constructs defined as maturity models, roadmaps, frameworks, readiness assessments, questionnaires, checklists, and surveys by clarifying the diverse tools used when implementing Industry 4.0. These instruments are useful in diagnosing a company’s readiness level.
6. When defining an assessment instrument for Industry 4.0, incorporating the perspective of a maturity model is  crucial to allow progress to be assessed. Its purpose is to help improve technologies, strategies, and capabilities in diverse dimensions within the organization. This tool works through a set of guided questions that measure the company’s level of maturity in relation to Industry 4.0. However, before administering the instrument, the company must have a basic understanding and have experts to ensure that the results accurately reflect the current situation of the company. The results of the model can be used to develop a roadmap that will guide the company’s transformation.

The concepts of Industry 4.0 and digital transformation are rapidly gaining traction and transforming the way in which businesses, governments and individuals operate, integrating the physical and virtual worlds through advanced technologies such as big data, automation, cloud computing, and hardware and software systems.

The lack of adequate tools and models to assess the needs of Industry 4.0 represents a significant challenge for companies seeking to adopt this digital transformation. Without an accurate assessment, organizations can invest in technologies that do not fit their real needs, resulting in a waste of time and resources. Furthermore, the absence of clear metrics makes it difficult to measure the impact of these initiatives and identify areas for continuous improvement.

However, many businesses feel overwhelmed by the rapid evolution of these technologies and struggle to implement the initiatives of the fourth industrial revolution correctly. Therefore, the tools analyzed in this article serve to provide guidance for assessing digital transformation in companies.

The author is research professor at the Department of Entrepreneurship and Technological Innovation, EGADE Business School.