Industry 4.0 : How can Industry 4.0 create value in manufacturing companies?

Abstract: At Hannover Messe in 2011, an annual German industrial fair, a term called Industry 4.0 was first mentioned. It defines the fourth industrial revolution. Industry 4.0 focuses on how to integrate new technologies and digitization to gain manufacturing advantages. It visualizes a fully automated manufacturing system with total adaptability and minimal environmental impact while improving product quality. The purpose of this report is to identify what can create value for manufacturing companies when implementing Industry 4.0 concepts. Since Industry 4.0 consists of many different aspects and areas this reports mainly focuses on how to create value in terms of costs, lead time and environmental impact. In order to answer these questions a literature study was done together with semi-structured interviews with employees in major Swedish manufacturing companies. The main conclusion of this report is that Industry 4.0 certainly can create value for manufacturing companies when implemented. Costs can be reduced with automated machines and predictive quality,lead times shortened by using models that can predict failure and a decreased environmental impactcan be achieved by implementing Industry 4.0 tools. However, it also highlights the difficulties when trying to implement Industry 4.0 in practice and were theory lacks application in practice. Finally, the report concludes that further research should investigate in how companies are implementing Industry 4.0 concepts into their businesses and how a business can ensure that it generates value.