Supply Chain Transformation Blog

Supply Chain Transformation Blog

Opinions expressed on this blog reflect the writer’s views and not the position of the Capgemini Group

Industry 4.0: The time to start is now!

The fourth industrial revolution is going on as we speak. Digital technologies already have and will continue to have a disruptive impact on the manufacturing industry. Manufacturing companies find themselves on the verge of a unique strategic opportunity. They must transform or face the consequences. Companies that totally ignore the need for change or late movers, are likely to be forced out of the market. However if one is capable of taking advantage of the digital revolution and transforming the business into an Industry 4.0 business model, success is the most likely alternative.

The concept of Industry 4.0 has, three years after its introduction, turned into a true hype in the market. However, research shows that the market lacks a common understanding of how they should actually address the unavoidable change. Because the idea on how to deal with this revolution becomes increasingly fuzzy, there is a risk that the hype will bypass reality, thereby paralyzing manufacturers and hindering them to act.

Seven digital technologies have been defined as the Technology Enablers of Industry 4.0. One of the most famous technologies at the moment is 3D-printing. Being able to print anything at any time at any preferred location eliminates the efficiency disadvantages of producing individual products and physically transporting them around the globe. Mobile technologies are all communication methods that transfer enormous amounts of information Access to data is crucial and considered a keystone of Industry 4.0. It is necessary to store data in such a way that it is accessible across the globe. Cloud Computing platforms and infrastructures facilitate a borderless flow of data. The data contains enormous amounts of information on operational processes and business performance and should be addressed with Advanced Analytics. Assessing this information and retrieving patterns provide insights that may lead to outstanding performance improvements in both operational excellence and customer focus.

Machine-to-Machine communication is all about the interface between physical and virtual worlds. It enables huge efficiency improvements in production facilities by enabling automated exchange of information between machines. New forms of collaboration and coordination are enabled by Community Platforms, enterprise-wide platforms that stimulate employee collaboration and knowledge sharing. Finally, the human presence in production is decreasing because of the introduction of Advanced Robotics. Robotics fulfill a role as independent production units and will have decisive impact on process efficiencies and the reduction of complexity.


All these technologies will impact the industry. To cope with them, companies first need to develop a deep understanding of the available technologies. Secondly, they should decide what combination of technologies they require in their individual situation to strengthen their competitiveness. This is the target picture. Once this has been defined, a transformation roadmap needs to be built to lead the way forward. Manufacturers should be prepared to transform their business and value chain, and even morph their business model. That’s  the destination of the path. But it will be a bumpy road to get there.

Article based on the report by Jochen Bechtold et al from Capgemini Consulting. For any further reading, see http://bit.ly/1tMPyNn

About the author

Moniek Nelissen & Richard van Schip
Moniek Nelissen & Richard van Schip
Moniek Nelissen

Moniek Nelissen is Managing Consultant in the field of Strategy & Transformation. In her projects she focuses on managing change, using both rational instruments and methodologies on people change. She's Global Content Owner for Capgemini's Business case methodology.

Richard van Schip :

Richard van Schip is Managing Consultant in the field of Supply Chain Management Strategy & Transformation at Capgemini Consulting. Richard brings 19 years of experience and focuses on Digital Supply Chain Strategy and Operating Models Design, Business Transformation, Performance and Process Improvement and e-Fulfillment. He is working with clients in the Telco, CPG and Manufacturing sector.

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