A Digital Framework for Industry 4.0: Managing Strategy

By Ana Landeta Echeberria

This book examines the impact of industry 4.0, and constructs a strategic digital transformation operational framework to prepare for it. It begins by examining the background of industry 4.0, exploring the industrial internet, new business models and disruptive technologies, as well as the challenges that this revolution brings for industries and manager.

The research enhances our understanding of strategic digital transformation framework within industry 4.0. It will be valuable reading for academics working in the field of industry 4.0 and strategy, as well as practitioners interested in enhancing their firms’ readiness for industry 4.0.

• Language: English
• Publisher: Palgrave Macmillan
• Release date: Dec 18, 2020
• ISBN: 9783030600495

Book preview

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2020

A. Landeta EcheberriaA Digital Framework for Industry 4.0https://doi.org/10.1007/978-3-030-60049-5_1

1. The Industrial Internet and the Potentially Economically Disruptive Technologies

Ana Landeta Echeberria¹  

(1)

Universidad a Distancia de Madrid, Madrid, Spain

Keywords

Industry 4.0Fourth Industrial RevolutionDisruptive technologies

This first chapter is based on Industry 4.0 in its entirety; origin, definition of the Fourth Industrial Revolution, its main characteristics, current transformation segments, challenges and opportunities, the presence of companies in worldwide network Industry 4.0, the disruptive technologies with a significant potential to drive economic impact and disruption, implications and challenges for business leaders in this new technological and business landscape.

1 The Industrial Internet (Industry 4.0): Concept and Context

Acccording to the findings of an analytical study on ‘Industry 4.0’ carried out by Policy Department of the European Parliament, the concept of Industry 4.0 (German Federal Ministry of Education and Research, Project of the Future: Industry 4.0) regards it as a series of disruptive innovations in production and leaps in industrial processes resulting in significantly higher productivity. It is viewed as the fourth time such a disruption took place following

1.

The First industrial revolution when steam power combined with mechanical production led to the industrialisation of production in the late 1700s.

2.

The Second industrial revolution when electricity and assembly lines resulted in mass production from the mid-1800s onwards.

3.

The Third industrial revolution when electronics and IT combined with globalisation greatly accelerated industrialisation since the 1970s.

According to this logic, the fourth industrial revolution links intelligent factories with every part of the production chain and next generation automation that has started to occur since about 2010 (Werner and Shead 2013).

In their view, it is somewhat of an oversimplification to characterise the first and subsequent industrial revolutions in this way, and economic historians will differ as to whether this would be a continuation of the third or the beginning of a fourth industrial revolution. Also, this model does not point out that with each revolution, national industrial leadership has changed—from England, to Germany and the Continent of Europe, and then the United States. But two key questions to be answered are about the extent to which this would be a disruptive technology that changes the rules of the game and leads to a leap in productivity (rather than incremental change), and if so, the extent to which such change can be generalised throughout the economies of Member States (all, some, which, how, etc.) and sectors that can be affected (and to what extent, etc.). Nevertheless, the argument does fit in with the observed evolution of industrial systems away from the Taylorist and Fordist¹ approach that has increasingly characterised production systems since the 1970s.

Although it may be that Artificial Intelligence is the disruptive technology with the greater applicability in the near future.

This is corroborated by the The One Hundred Year Study on Artificial Intelligence, launched in the fall of 2014 produced by Stanford University.

AI is a science and a set of computational technologies that are inspired by—but typically operate quite differently from—the ways people use their nervous systems and bodies to sense, learn, reason, and take action. While the rate of progress in AI has been patchy and unpredictable, there have been significant advances since the field’s inception 60 years ago. Once a mostly academic area of study, twenty-first century AI enables a constellation of mainstream technologies that are having a substantial impact on everyday lives.

Nilsson (2010) has provided a useful definition of AI:

Artificial intelligence is that activity devoted to making machines intelligent, and intelligence is that quality that enables an entity to function appropriately and with foresight in its