Benefits of Industry 4.0

The goal of implementing Industry 4.0 is to produce a higher quality product with a shorter time to market. (Photo courtesy of Unsplash)

The automotive industry has been a forerunner in the race to install Industry 4.0 in daily business processes. It’s easy to see why: technology opens the door to significant improvements in efficiency and quality.

Industry 4.0 is not about making assembly lines capable of producing more cars with fewer employees, or simply about reducing product lifetime costs during production. It is about adding value by integrating the supply chain in a new way that improves communication between all stakeholders involved.

Suppliers working with OEMs can benefit from increased flexibility in production planning and more efficient ordering, logistics and quality assurance processes.

At the same time, Industry 4.0 paves the way for a more innovative and sustainable business model that has an impact on society. With the growing trend towards electric vehicles comes questions such as:

  • Where does the energy that powers these cars come from?
  • How to replenish their batteries?
  • And how can we ensure that these resources are not depleted at an accelerated rate?

This is what this guide seeks to answer. It offers insight into how Industry 4.0 is changing the automotive industry, what it means for suppliers, and what you can do to prepare your business.

What is the impact of Industry 4.0 on the automotive industry?

Industry 4.0 refers to the current automation, data exchange and connectivity between machines, devices and factories in an industrial environment.

This involves digitizing, integrating and networking physical products, production lines, business networks and supply chains.

In the context of the automotive industry, Industry 4.0 involves focusing on smart factories that brands can improve through digital updates enabled by big data analytics.

The goal is to provide a higher quality product with a shorter time to market.

To achieve this, you need to ensure that all parts of the production process and supply chain work together: automation, robotics, IoT, data, analytics and connected workers need to work together. interconnect in a synchronized way.

Benefits for automotive suppliers

The next revolution in smart manufacturing is supposed to bring together the physical, digital and biological worlds. Therefore, Industry 4.0 has many advantages for automotive OEMs.

Some of the benefits include:

  1. Increased efficiency: Industry 4.0 helps you reduce costs by automating processes that were previously done manually, allowing your employees to focus on more strategic tasks that set your business apart from the competition.

    Machine data exchange allows you to track performance and flag issues before they escalate into larger problems.

    This means you can reduce inventory levels and avoid carrying excess inventory, helping you reduce costs.

  2. Reduction of waste: Industry 4.0 creates a closed loop that allows you to follow your production process and reduce the necessary waste.

    It can also help you identify the cause of production problems much faster than before, saving your business money in terms of raw materials, time and energy.

  3. Improved product quality: the data exchanged between machines allows them to communicate their operational problems. This can help the problem be dealt with much faster, helping you avoid defective products being shipped to your customers.

    Automated systems that are part of Industry 4.0 can be made to the traceability standards demanded by car manufacturers.

    As a result, you can supply quality parts while avoiding costly delays and penalties for missed delivery dates.

Industry 4.0 is meant to help manufacturers stay one step ahead. (Photo courtesy of Unsplash)

Getting the most out of Industry 4.0

The benefits of Industry 4.0 for automotive OEMs are clear, but how can they get the most out of this revolution?

There is no one-size-fits-all approach to success with Industry 4.0, as it depends on several factors, such as your company’s size and business goals.

However, some of the actions you can take to get started include:

  1. Build a culture of continuous improvement and learning: Industry 4.0 is about embracing and adopting new technologies so your employees can work together to implement new solutions – those that deliver tangible process benefits and the performance of your business.

    They must also learn how to create closed-loop systems monitored by software.

  2. Work with solution providers for additional expertise and resources: System integrators and cloud-based software vendors bring the expertise required in Industry 4.0, making them a valuable resource for assistance with implementation, process re-engineering, training your workforce, etc.

    These experts can also help you develop a smart manufacturing strategy that helps you achieve your goals.

  3. Learning by doing: Your business leaders should support the initiative and promote agile and adaptive learning within your workforce. This will allow them to adapt to Industry 4.0 as it takes hold in the automotive industry.
  4. Work with your suppliers to create a partnership approach: Industry 4.0 can be difficult to implement in isolation, so building strong relationships with your automotive suppliers is essential. It also makes sense for you and your suppliers to work together on re-engineering processes, so that they are improved across your entire supply chain.

    This way you can optimize your value stream and help different departments of the company to cooperate on a common goal.

How to start with Industry 4.0?

To get started with Industry 4.0, you must first embrace automation and analytics technology in your processes.

These support human operators and help them make better decisions in the factory. They are already an integral part of Industry 4.0 even before it became widespread in the automotive industry.

Case study of automotive suppliers who successfully implemented Industry 4.0 in their business

Various case studies on the subject of Industry 4.0 show how large, established companies and small and medium-sized enterprises are reaping the benefits of new technologies.

An example of how companies like Volkswagen are using Industry 4.0 technology in their production process comes from the Volkswagen plant in Bratislava. Volkswagen uses Industry 4.0 technologies in its production process to increase flexibility and efficiency within the plant.

Challenges of the transition to Industry 4.0

Despite its many benefits, the Industry 4.0 revolution is not without its challenges, and one of the most important is knowing how to overcome them.

Some of the challenges include:

  1. Data Sensitivity and Security The Industrial Internet of Things (IIoT) is an essential part of Industry 4.0. Yet, since these are internet-connected devices that collect and transmit data, there are also serious security challenges to overcome.
  2. Standardization issues: Industry 4.0 promises to help bring all the different systems in your factory together by connecting them through the cloud. However, without a common set of industry standards, such as those established by OPC (Open Platform Communications), these systems will not communicate.

    To make your Industry 4.0 project more cost-effective and less time-consuming, you need to work with reliable vendors who can configure their hardware for specific factory applications.

  3. Lack of technical skills: For manufacturers who are just starting to explore Industry 4.0, getting their workforce up to speed with all the new technology can be a challenge. Providing the tools that make their jobs easier (rather than forcing the use of systems that may not meet their needs) is key to successful adoption of new technologies.
  4. Interoperability issues: Industry 4.0 technologies are designed to work together seamlessly, but that doesn’t necessarily mean they all do, at least not yet. You may find that some systems don’t work well with others, so it’s essential to choose a vendor that can configure their hardware to meet your interoperability requirements.
  5. Hardware compatibility issues: As already mentioned, Industry 4.0 promises to connect devices throughout your factory via the cloud. However, some hardware components are more compatible with this system than others, especially those designed for Industry 4.0 from scratch.


The automotive industry is moving towards Industry 4.0, the next step in developing smarter factories. Companies are finding ways to circumvent their traditional approach to leveraging technology by accelerating product development times.

Industry 4.0 has already started to impact supplier development, helping them to speed up the product development process. By being more collaborative, suppliers can take advantage of emerging technology by making their operations more efficient and thus creating a better product.

Eric Whitley has 30 years of manufacturing experience and is now a senior account manager for L2L, which has an intelligent manufacturing platform.

About Donnie R. Losey

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