were identified as key requirements, which again, many companies simply offered as a re-packaged legacy bespoke product. Such technologies as IIoT, cloud-based data storage and computing etc. This led to significant confusion in the market, including a wide range of reinterpretation of what Industry 4.0 represents, especially as customers realized that in the vast majority of cases, what they were now buying was little different from what they had before, made up of existing technologies and proprietary data. The initial real-world effect of Industry 4.0 however, has been for equipment vendors to rush out with their Industry 4.0 messaging, so as to ensure that their existing products are perceived as “future-proof” in the eyes of customers.

Since labor rates are a key element in cost differentiation between local and remote manufacturing, the balance of competitiveness tips in favor of local manufacturing, as long as such automation can be effectively utilized. As increasingly intelligent and flexible automation becomes available, fixed costs of labor can be reduced. The German government recognized the need and opportunity to support small and medium sized business to be better prepared in terms of competitiveness, as the true costs of the mass production business in remote areas of the world was realized, in terms of distribution costs, investment and price depreciation of an escalating amount of stock, and environmental concerns. Trends that have been affecting the industry progressively over the last decades, specifically the increase in the number of products and variants, the cost of finished goods stock, and the resultant need for high-mix, low-volume production have drastically changed the way in which assembly manufacturing works. A simple phrase “build to order with mass production efficiency” is often used to summarize this so-called 4th Industrial Revolution.

The focus of industry 4.0 in manufacturing has been mainly on the technology required to connect machines and systems together, with digital solutions that use the data to optimize production and related activities, especially in cases of high-mix and low volume. What is Industry 4.0? The intent of Industry 4.0 is to drive flexibility in manufacturing operations, in order to meet emerging demand patterns of local customers, with the capability of making a high range of products in small batches without the sacrifice of performance as compared to higher volume and more dedicated production scenarios.

Industry 4.0 elements