Stages of developing Industry 4.0 maturity


There should not be any doubt at this point that your organizations MUST undertake the journey towards building Industry 4.0 capabilities. But what will the journey look like ? What should be realistic timelines ?Where does your enterprise stand today vs others in journey towards Industry 4.0 ?

There have been may proposed stages of evolution towards Industry 4.0 capabilities and all of them can be used to evaluate and plan your journey. Each one of them have a different focus but at a high level they all seem to touch upon the same aspects. In this article, I will share my own perspective on this and discuss the stages of journey towards Industry 4.0 maturity.

Understanding the drivers first

Before we start exploring the journey, we need to understand what are the drivers of change behind Industry 4.0. At a high level, these are driven by two types of capabilities:

  • IoT Enablers
  • IoT Value drivers

Below is a pictorial representation of what are some of the drivers that fall within these capabilities.


Note from the illustration above that Sensors, devices, networks etc. are just enablers, as I consistently emphasize in my posts. The real value drivers are what kind of solutions you develop leveraging the data generated by enabler platforms.

Stages of Evolution

Stage I: Connected Operations systems and processes

Companies see “Smart” manufacturing as a panacea but the fact is that many studies indicate that just by implementing digitally automated manufacturing, companies can boost productivity by as much as 30 %. And what does Digitally automated manufacturing mean. It  means a scenario in which, from manufacturing shop floors to executive leadership suites, embedded software enables the connected and intelligent applications, machines, products and people that sustain a more operationally efficient enterprise.

Most enterprises are halfway through only, even for this preliminary stage.  Research shows that around 40 percent of US companies consider their industries to be digital leaders, whereas in Germany and France, not even 20 percent believe that. Note that this stage also covers the optimization of business operations through connectivity. This allows companies to create more customer touch points, thus driving revenues.

Stage 2: Developing new products and services

In this stage, a plethora of new products and services will start appearing, propelled by technologies like cloud computing and the commodification of analytics. On the foundation of connected, operationally efficient manufacturing processes, businesses will look further downstream to their final markets. Due to the proliferation of “Smart” products by then, companies will find a large clientele base, either consumer or other businesses, with substantial appetite for intelligent products that can offer added services and value via embedded software.

Stage 3: Platform enabled marketplaces

At this stage, the connected products and services will be perceptive enough to sense needs of customers. This will be the phase where connected products will be replaced by connected product systems. By this time, products would have evolved from hardware to smart item to one that can serve as a platform. At this stage, companies should be able to create hyper personalized offering entirely new levels of user experience.

This stage will also be marked by removal of the final barriers in enterprise processes. By embedding software in production machinery as well as products, meaningful and flexible business ecosystems can be built that will be able to share risk and create integrated, cross industry products and services.

Stage 4: The Automated enterprise

This is the nirvana stage. This stage will be focused on further deepening and detailing of digitally orchestrated smart manufacturing processes. It will be marked by autonomous control and full automation from end to end. This will mark the full establishment of the IIoT across most industry sectors in the developed world.


Views my own.


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