Industry 4.0: What it is, how it works, maturity model, importance and trend.

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BY : adminJanuary Wed, 2023
What is Industry 4.0

If you want to know what Industry 4.0 is, it is a term that was first coined in 2011 by the German government to describe its strategy for the digitalization of manufacturing industry. Since then, it has been adopted worldwide to describe the digital transformation in industry.

What is Industry 4.0?

Industry 4.0 is a technological revolution that is transforming the way companies operate and produce goods and services. It refers to the integration of advanced technologies such as artificial intelligence, the Internet of Things (IoT), robotics and 3D printing in production processes, with the aim of improving efficiency, reducing costs and improving the quality of products and services.

Industry 4.0 is based on the digitalization and automation of production processes, which allows greater integration and collaboration between the different areas of the company, as well as the collection and analysis of data in real time to improve decision-making, improve efficiency and reduce errors, which translates into greater productivity and better quality products and services.

In addition, Industry 4.0 also allows companies to customize their products and services to meet specific customer needs, which increases their competitiveness in the global market as well as improving safety in production processes and reducing the environmental impact of production.

▶ You may be interested in: Buy a Company in Industry 4.0

How does Industry 4.0 work?

Industry 4.0 is based on the integration of different technologies that enable more efficient and customized production. These technologies include:

1. Internet of Things (IoT)

IoT enables the connection of devices and systems, such as sensors and machinery, via the internet. This enables remote monitoring and control of production processes, which increases efficiency and responsiveness.

2. Big data and data analysis

Collecting and analyzing large amounts of data, or big data, enables companies to identify patterns and trends in their production processes, which can lead to improvements in efficiency and quality.

3. Augmented and Virtual Reality (AR/VR)

AR/VR can be used to enhance worker training, problem solving and decision making, as well as for visualization of product designs and models.

4. Robotics and automation

Robotics and automation enable repetitive and hazardous tasks to be performed efficiently and safely, which can improve product quality and consistency.

Industry 4.0 Maturity Model

The Industry 4.0 Maturity Model is a tool that allows companies to assess their level of digitalization and automation in relation to Industry 4.0 standards. This model is used to identify opportunities for improvement and design an action plan for the implementation of Industry 4.0 solutions in the company.

The model is based on five maturity levels, which are described below:

Level 1: Reactive

At this level, companies use manual and isolated technologies and processes. There is no clear vision of digitalization and automation, and solutions are implemented reactively, in response to specific problems.

Level 2: Proactive

At this level, companies have a clear vision of digitalization and automation, and are working on implementing solutions. However, there are still some manual and isolated processes.

Level 3: Established

At this level, companies have implemented digitization and automation solutions in some key processes. However, there are still areas of the company that are not fully integrated.

Level 4: Advanced

At this level, companies have implemented digitization and automation solutions in most of the company's processes. Processes are integrated and data analysis tools are used for decision making.

Level 5: Leader

At this level, companies have implemented digitalization and automation solutions in all company processes. The company is leading in the implementation of Industry 4.0 solutions and is using advanced technologies such as artificial intelligence and augmented reality.

Why is Industry 4.0 important?

Industry 4.0 has a major impact on the way companies operate and compete in the global marketplace. By adopting digitization and automation solutions, companies can improve their efficiency, reduce their costs and improve the quality of their products and services. Below are some of the main impacts of Industry 4.0 on companies:

1. Improved efficiency

Industry 4.0 enables companies to improve the efficiency of their production processes through the automation of repetitive tasks and the integration of real-time data. The digitization of processes also allows companies to collect detailed information about their performance and improve decision-making.

2. Cost reduction

The adoption of Industry 4.0 solutions can reduce companies' production costs through process optimization, reduced downtime and the elimination of manual tasks. In addition, improved efficiency and reduced production time can increase companies' ability to meet market demand and increase their profitability.

3. Improving the quality of products and services.

The digitization of processes and real-time data integration enable companies to enhance the quality of their products and services. Task automation also reduces the likelihood of human errors and improves process accuracy.

4. Customization of products and services

The Industry 4.0 enables companies to customize their products and services more effectively to meet specific customer needs. Advanced technologies such as artificial intelligence and data analytics enable companies to gather detailed information about customers and their preferences, allowing them to tailor their products and services to meet their needs more effectively.

5. Competitiveness in the global market

The adoption of Industry 4.0 solutions enables companies to compete in the global marketplace by improving their efficiency and reducing their production costs. This enables them to offer products and services at more competitive prices and improve their ability to meet global market demand.

Industry 4.0 trends

Industry 4.0 continues to evolve as new technologies and solutions emerge. Here are some of the most important trends:

1. Artificial Intelligence (AI)

AI can be used for task automation and real-time decision making, which can improve efficiency and quality.

2. Blockchain

Blockchain technology can be used to ensure the security and traceability of data and products throughout the supply chain.

3. Additive manufacturing (3D printing)

Additive manufacturing enables the production of customized and complex parts and components, which can improve efficiency and quality.

4. Cloud computing

Cloud computing enables remote access to data and systems, which can improve efficiency and collaboration.

▶ You may be interested in: Industry 5.0: new investment trends


Industry 4.0 is transforming the way goods are produced and distributed around the world. Digitization, automation and interconnection are enabling more efficient, customized and sustainable production. It is important for companies to adopt these technologies to remain competitive in the global marketplace.

At Baker Tilly GDA, we are professionals with over 25 years of experience in the market, being a leading firm in consultancy services such as business advisory in the purchase of the most relevant 4.0 companies that have emerged in recent years.

If you would like to learn more about how we can assist your company, feel free to visit our website at and get in touch with us. We would be delighted to help take your company to the next level.

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