**4.1 Vertical networking of smart production**

Industry 4.0′s first main characteristic is the vertical networking of smart manufacturing systems. Vertical integration in Industry 4.0 establishes a connection between the many levels of the industry, from the manufacturing floor up, via production monitoring, control, and supervision, quality management, operations, product management, processing, and so on. This interconnectedness across all corporate levels provides for a fluid, transparent data flow, allowing for data-driven strategic and tactical choices [20]. Hence, the main objective behind vertical networking is to utilize Cyber-Physical Production Systems (CPPSs), to enable industries to quickly respond to unexpected order changes resulting from demand fluctuations, equipment failure or stock shortage. Vertical networking improves an organization's capacity to adequately adapt to changes in market requirements and benefit from new possibilities [22].

Furthermore, it makes it easier to link resources to goods and find supplies and parts at any time. Similarly, processing data, anomalies, and defects from various processing stages of the manufacturing line are automatically captured and registered, allowing for quick responses to order changes, quality variations, and even machinery breakdowns. As a consequence, waste is decreased, and resource efficiency, notably in terms of material usage, energy consumption, and human resources is improved [28].
