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“INDUSTRY 4.0”—TOWARDS OPPORTUNITIES AND CHALLENGES OF

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Article  in  DEStech Transactions on Engineering and Technology Research · January 2018

DOI: 10.12783/dtetr/icpr2017/17640

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24th International Conference on Production Research (ICPR 2017)
ISBN: 978-1-60595-507-0

“INDUSTRY 4.0”—TOWARDS OPPORTUNITIES AND CHALLENGES

OF IMPLEMENTATION

M.K. Wyrwicka, B. Mrugalska

Faculty of Engineering Management, Poznan University of Technology, ul. Strzelecka 11, Poznań, Poland

Abstract
In the paper the concept of "Industry 4.0", which is based on self-organizing production systems, is shown. The
attention is paid to the automation which is "an installation" that provides conditions for a human cooperating
with the system as a client, service technician and programmer. The problem of competence understood as a
competence of the person and as the power of position, and creating more and more independence of the
system, independent from the human, way of his functioning, is also presented. Moreover, the comparison of
the assumptions of automation and contemporary solutions is done.

Keywords:
Automation, Industry 4.0, IT, manufacturing.

1 INTRODUCTION appliances, tools) will be firstly designed and tested during

The process of technological changes has resulted in the simulation, and virtual reality will be used to select solution
possibility of a radical change from the computer variants and optimize the systems. The analyses of
integration manufacturing (CIM, ERP) to the concept of production systems are performed in reference to their
"Industry 4.0". The next industrial revolution based on the validity, correctness of spatial layout, quality assurance,
Internet of things and new technologies is not a processing capacity, necessary and possible inputs, and
continuation of current trends in automation. It results from environmental impact. Such a system is often an interim
the changes of the philosophy of creating systems network created on the basis of declarations and
responsible for the product or service [1]. It appears that it information existing in the Internet.
is the customer, his requirements for product quality, price Such cyber physical systems appear on the basis of the
and delivery time that provide are a pulse for initiating such principle of self-organization to realize a customized order
system. In this way, the product becomes the axis of where the conditions are defined in the customer
integration of socio-technical system formed ad-hoc, which specifications. Their different formations and actions - often
should be included - as a subsystem – in the systems of possible without human participation - represent the
higher degree of complexity. In the scale of the enterprise revolutionary nature of the observed changes.
and the economy this phenomenon can be described as Contemporary industrial revolution is the answer to
fractals which are not permanent creations. Therefore, it information age problems which are the consequence of
should be noticed that the implementation and integration the unreliableness of human resources (especially when
of socio-technical systems, even those with a data are enhancement) or individualization of customer
predominance of automated solutions, requires special expectations. It is also the result of new opportunities from
preparation of adaptation processes, and gradual and the development of related technologies. There has been
flexible implementation. The specific technical and made a shift in the foundations which were the basis for the
organizational conditions of production system with a high IT sector - a leader - for many years [2]. Nowadays, "pure
level of customization and those related to the readiness IT" is becoming more and more servile. The concurrent
and preparation of personnel engaged in the product development of information systems and monitoring and
realization, should be also considered. Thus, the new maintenance systems of machines and devices, where the
situation associated with the fourth industrial revolution intention is to control the systems in real-time, has led to
creates different implementation conditions. Moreover, this the appearance of messages originating both from system
revolutionary change concerns creation of production operators and from machines or devices themselves in the
systems that are more and more cyber-physical (Table 1). Internet (Figure1).
Table 1. Industrial revolutions timeline.
Internet of Things (IoT)  CPS systems
Beginning Beginning + IP (identifiability,
18th/19th  dedicated systems
of 20th 1970s of 21st localization,
century  physical objects, tools
century century communication, network
1st 2nd 3rd 4th
industrial industrial industrial industrial
revolution revolution revolution revolution
Use of IT to  data warehouses, cloud computing,
Use of Production automation Use of intelligent tools
steam line with of cyber- (one user - many computers)
power imposed production physical Internet
 data stores, Internet, PC
machine takt time – CIM, systems
 central computer Intranet
ERP
(many users – one computer)
In the concept of cyber physical systems it is assumed that
the products and manufacturing systems, which are
necessary to their creation (factories, equipment, Figure 1. Logic of IT and system solutions development
towards fulfiling servient functions via Internet of Things.

382
Internet of Things (IoT) means network communication
between modules and/or the use of embedded devices (or
limited functionality) and usually some kind of their
connection to the physical world. It is basically the network
connection of everyday devices that were traditionally not
recognized as computers as they worked as IoT thanks to
the data processing and communication capabilities of
traditional computers.
The forecasts show that the number of devices
communicating with each other will also increase in the
near future. According to PricewaterhouseCoopers the
Polish IoT market can grow annually even by 25%, and in
2018 it will reach almost PLN 12 billion. Currently, most IoT
equipment solutions are used in transport and logistics
industry to monitor the car fleet [3].
The result of the synergistic influence of control systems,
the Internet of Things, and the technology of identification,
is that both the product design paradigm and the way in
which such systems are implemented and operated, are
changing. Regardless of media hype, the market for
related, integrated and connected devices is constantly
evolving. The situation is similar to cloud computing, which
is more and more advanced in comparison to the previous
versions and still develops dynamically. It results from the
fact that it is more and more significant and ubiquitous,
however, on the other hand, it is also a source of many
concerns, for both individual consumers and businesses.
In the management of modern manufacturing, information
technologies support the deliberate creation of intelligent
systemic (organizational, logistic) solutions that combine
the concepts of lean, agile and quick response while
preserving cognitive, anticipatory, realization and
adaptability abilities [4].
Therefore, the purpose of this paper is to show the trends
that are emerging in relation to the "4th generation
industry" in the context of the consideration of its
implementation to industrial enterprises.
2 IDEA OF INDUSTRY 4.0
Social, technological and environmental changes have led
to the individualization of mass production. In this
progressive social change the customer will be willing to
pay 10-15% more for a unique product. At the same time, it
will be required to deliver it rapidly what contributes to the
development of local small-scale production [5].
The analysis of the industry show that there are conditions
which allowed for revolutionary changes in manufacturing
activities that will be based on the latest technologies and
nano solutions.
In April 2013 at Hannover Messe, a consortium of
universities, research institutes and industrial plants in
Germany, announced a report on investment, development
awareness, ideas and further research on the
implementation of Industry 4.0. This concept defines a
broad spectrum of innovations in the areas of IT,
manufacturing technology and materials science. Following
it three future-relevant themes can be identified:
 dealing with complexity
 capacity for innovation
 flexibility [6].
According to Voigt and Kiel [7] they can be extended by
complexity of management and data security. On the other
hand, 5 topics that are rated for the implementation of
“Industry 4.0” can be identified [8]:
I. Industrial policy dimension: development of new
business models based on traditional value chains
II. Employment political dimension: development of high-
skilled jobs
383
III. Dimension data security: active protecting confidential
data from unauthorized access
IV. Middle class company’s policy dimension: innovative
action of the middle class companies
V. The regulatory dimension: reference architectures
and application in order to achieve competitive
advantages.
At the same time the Smart Manufacturing Leadership
Coalition (SMLC) in the USA, actively supports the
development of intelligent manufacturing, which uses
intelligent tools that operate in real-time at the level of all
production processes, what was noticed at the
SelectedUSA Summit in 2016 [9]. Moreover, the Plattform
Industrie 4.0, and the Industrial Internet Consortium have
also decided to explore the potential alignment of the
Reference Architecture Model for Industrie 4.0 (RAMI4.0)
and the Industrial Internet Reference Architecture
(IIRA).They extend their cooperation in the areas of
Industrial Internet Consortium Testbeds, I4.0 Test Facilities
and Infrastructure to ensure interoperability on the
technical level [10].
All these actions indicate that the industrialized countries
noticed the unique and complementary effects in new
manufacturing technologies and different production
concepts [11] as global manufacturing trend is in a positive
direction. Everyone wants to be a leader in the industrial
revolution, which is supposed to help to return the industry
to both Europe and North America [12]. For example, in
the U.S. factory jobs are on the rise, and many of new jobs
are coming back to North America from China. Since 2010,
when manufacturing employment in the U.S. was 11.45
million jobs, nearly a million new factory positions have
been created, mostly in the Southern states, particularly
North Carolina, South Carolina, and Tennessee [13]. In
such considerations natural environment plays a vital and
crucial role. All the efforts should be concentrated on
waste-free production, which should be realized efficiently.
For example, it is suggested not to consume valuable fuel
for unnecessary transportation of goods. Such
assumptions lead to the return to local solutions and the
provision of local products. Even Coca-Cola has committed
to “water neutrality” at the local level across its globally
distributed production facilities [14].
In one of the latest reports published by the European
Parliament Industry 4.0 is defined as a change in
organization and value creation where machines and
devices communicate each other and choose the optimal
pathway. The exchange of information, communication
between participants leads to flexible changes in the
implemented path what finally influences economy and
social aspects. It is predicted that within 5-10 years the
productivity of the economy of Germany will increase from
15 up to 25% [15].
After the fourth industrial revolution the factories will be
able to self-organizing. In order to achieve it, it is very likely
to use fractal models that allow even a description of
chaotic processes occurring in dynamic systems [16]. The
management concept based on the notion of "fractals" as
self-organizing and self-optimizing, small and fast
regulatory systems assume that production fractals
communicate directly with the relevant supplier or recipient
fractals. Due to self-organization, they choose each time
methods, such as planning and control methods, and use
machines and robots that are suitable for carrying out
particular tasks. The management and creation of such a
structure is becoming more and more difficult. The
requirements towards individual employees or groups are
getting more and more sophisticated. The creation and
management of such information and communication
networks is a personal, organizational and technical
challenge for the future.
In the organizational structure of an enterprise fractals are
self-contained units that operate on the principle of self-
organization: at the operational level, self-organization
refers to business processes, and tactical and strategic
levels refer to the formulation of goals and the formation of
internal and external relationships and interactions.
The products and machines will communicate each other
using integrated circuits with strict production instructions.
It is predicted that more and more devices will be available
online. However, this situation requires appropriate
protection of the devices, information and communication
systems, data processing and users applying intelligent
industrial networks model and best cyber security practices
[17]. It results from the fact that such systems generate,
process, and exchange security-critical and privacy-
sensitive data that are often targets of cyberattacks. Such
attacts can be very dangerous as they may lead to physical
damage of the system and even endanger human lives
[18].
In Industry 4.0 infrastructure and technology overlays make
it possible to better and faster use information, which
results in a shift of the foundations of information transfer in
production activities. The innovation initiative should not
only refer to a new discovery in basic research and search
for its applications, but primarily it should be focused on
specific procurement, problems or needs of society.
It is assumed that the product or service will be an
integration axis around which an ad hoc system is ready to
develop, produce and offer, and ultimately to provide
service and finally dispose. A client’s order, which contains
a specification of requirements, should be an inspiration to
act - to design, configure, use the manufacturing system,
and disintegrate it after performing the task.
However, a question arises what producers should do to be
ready for Industry 4.0. The answer seems to be easy – Figure 2. Value drivers and their Industry 4.0 levers
such an enterprise should be flexible, use new (Adopted from [19]).
technologies and processes, which can be adopted, and
achieve significantly faster return on investment [5]. As it can be noticed this compass consists of eight basic
Furthermore, it should be prepared for the digitization of value drivers and 26 practical Industry 4.0 levers which
the manufacturing sector, driven by four disruptions: “the should be taken into account by manufacturing leaders. It
astonishing rise in data volumes, computational power, and is supposed that cross-functional discussions can facilitate
connectivity, especially new low-power wide-area networks; the companies to find the levers which are the best
the emergence of analytics and business-intelligence appropriate to solve their particular problems [19].
capabilities; new forms of human-machine interaction such
as touch interfaces and augmented-reality systems; and According to Mike James (a board member of the MESA
improvements in transferring digital instructions to the International Board of Directors) organizations, which
physical world, such as advanced robotics and 3-D would like to adapt this idea and make changes to their
printing” [19]. On the other hand, the executives wonder production, should start from six basic steps [5]:
which data will be the most important, which data leakage  create a team to study Industry 4.0,
can lead to the biggest lost and which technologies would  order the team to study what Industry 4.0 means and
increase the return on investment for a company. In order how it will affect the company,
to sort out these choices, Industry 4.0 levers perceived in  encourage the team to participate in events related to
the context of value drivers can be used (Figure 2). Industry 4.0 and discusses its issues at regular
meeting,
 control and manage current investments,
 experiment with new technologies,
 be open to try new strategies even if they mean risk of
losing money.
It appears that the greatest challenge for companies, which
move their business to the digital model, is to change
business processes and organizational structures in the
enterprise related to migration [20]. There is often a need
to radically reorganize sales department to meet the
requirements of the digital model and connect new sales
channels with the traditional ones. The best customer
service procedures have to be developed as it is easy to
change the provider of goods via the access to the
Internet. However, the challenge is to broad the access to
the sources of data to external ones (eg social media),
which results in more data and business processes to be
processed and analyzed. It is also important to provide an

384
acceptable level of data security, which often requires
substantial investment. It leads to the appearance of new
roles in the company, for example such as a chief digital
officer (CDO). It is possible to find some variations in the
actual title of this job. However, the role of this person is to
define the company’s digital strategy and execute its cross-
functional transformation into a fully digital enterprise, but
the question arises what such a digital leader is supposed
to accomplish. In order to achieve it, it is possible to find
five CDO “archetypes” — the progressive thinker, the
creative disrupter, the customer advocate, the innovative
technologist, and the universalist. The provided models are
suposed to indicate the potential range of CDOs roles and
responsibilities [21].
3 PROBLEM OF COMPETENCE
Competences consist of qualifications (formally confirmed),
skills and experience, and attitude (in respect of duties,
regulations, co-workers, supervisors, but also techniques
or new concepts). New technology areas, related to the
idea of Industry 4.0, require new skills from specialist staff.
It should be underlined that there is a tendency is that
mechanical, repetitive activities will be performed mainly by
machines or robots. Thus, people should primarily develop
such skills as creativity, experimenting, situational
assessment, design, organization and reengineering. The
4.0 engineer must be able to process and analyze large
amounts of data from multiple sources, assess the validity
of the information, their credibility, and draw relevant
conclusions. It will help him to get to know this information,
including using electronic media and BigData tools [22].
For example, the integration of control systems with IT
systems, the programming of industrial robot assemblies,
the integration of analytical systems in data clouds with
local systems, cyber security and the application of artificial
intelligence algorithms in automation systems can be
mentioned among others.
Competence - the key is also openness - modern experts
cannot be limited to their narrow specialization. They must
have the ability to understand notions and concepts from
other disciplines. They should be open to changes, both in
the area of specialization and in the team in which they
work. The more and more important is becoming the ability
to communicate, intercultural one and using virtual tools.
Employers should completely change organizational
structures, create systems managing talents, and use
human resources strategies to keep up with the pace of
technological revolution.
In 2017 the survey was carried out among more than 10
400 heads of companies and HR divisions from 140
countries, including 22% of the correspondents from large
companies (employing over 10,000 employees), 29% from
medium-sized companies (from 1 to 10 thousand
employees) and 49% from small companies (less than 1
thousand employees). Its results show that 56%
companies modify human resources programs to make it
possible to use digital and mobile tools, while 33% already
use various forms of artificial intelligence applications to
solve HR problems. At present, the company's personnel is
not only full time employees, but also professional,
seasonal, commissioned and "crowd" employees. The
employers should also perceive robots, cognitive tools and
artificial intelligence systems as new types of personnel.
However, only 17 percent board members is ready to
manage personnel, robots and artificial intelligence. This
level is the lowest one observed for five years in the Global
Human Capital Trends survey [23].
It is also indicated that by 2020, the European labour
markets may be short of as much as 825 000 ICT
385
professionals. This lack of employees can be particularly
visible in advanced manufacturing settings where there is a
need of analysis of big data and cybersecurity. In spite of
the fact that various actions have been undertaken to boost
the acquisition of eskills, the young generation is not
particularly interested in the digitalization of the workplace.
In the survey, conducted among young German, only 13%
of the respondents definitely would like to work in ICT, in
spite of the fact that they perceive this sector as the most
prospectus [24].
4 READINESS OF ENTERPRISES TO IMPLEMENT
IDEA OF INDUSTRY 4.0 IN POLAND
According to the Welcoming Innovation Revolution report
of the GE Global Innovation Barometer [25] 77% of Polish
entrepreneurs are optimistic about the Industry 4.0 and
83% of the respondents are interested in its technologies.
The global business optimism results from the fact of the
dynamics of corporate investments in Big Data analysis
tools. In the recent years, this indicator has grown at a two-
digit rate. In Poland, the scale is much small and it
increased from 49% in 2014 up to 68% in 2016.
Data-driven business is getting more and more tangible,
and data do not only are important for the advertising
industry or IT sector. Their benefits are also noticed in the
fin-tech sector such as banks, telecoms, consulting and
insurance companies. It results from the fact that the
information coded in the Big Data allows to have a 360-
degree view of the business situation and implement the
effective strategy.
The companies, which refer to Big Data in their decision-
making processes, are more flexible, respond faster to
market trends, and have the ability to anticipate problems
or threats that may appear in the future months. These
data have also a positive influence on corporate revenue.
When implementing new concepts beyond the substantive
one, it is important to have an application knowledge that
allows you to creatively introduce new solutions, not just
reactive to duplicate what has already been created
somewhere.
5 CONCLUSIONS
In Poland many companies are not prepared for the 4.0
revolution. They are ready to improve their elements or
departments, but not to do the overall integration.
However, today at the stage of purchasing of new
machinery it is important to know their possibilities, how
they will work with other machines and even if they can be
integrated in the future [26].
The level of the introduction of robots to carry out industrial
tasks in Poland is growing much faster than on the
matured markets (in the years 2010-2014 it increased by
20%). However, it should be emphasized that in Poland
most of the enterprises are small and medium-sized which
that are not "technological leaders in comparison to the
enterprises located in Western European countries. The
level of process automation is far from expected. In spite of
the fact that Polish society is well educated, the degree of
saturation of business with digital competence is not high.
The investigations show that among 28 European Union
countries of the European, Poland is in the 25th position.
However, the interest to implement the Industry 4.0
concept can result from increasing labor costs. There is a
need to search for new approaches to achieving the same
efficiency with less engagement of human resources [27].
In Industry 4.0, IT is a driver of change and innovation in
terms of process and technology, however, it is not a
prerequisite. The production system require digital models,
simulations and analysis of large data sets to produce
products that meet quality standards. At the design and
construction stage, a mathematical approach and IT
technology are needed. It is much cheaper than running a
6 ACKNOWLEDGMENTS
This research was undertaken within the framework of the
statutory activity, project 503217/11/140/DSPB/4151.
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Retrieved from
http://www.controlengineering.pl/menu-
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