**1. Introduction**

The chapter is structured as follows: first, an overview of Smart Manufacturing and Industry 4.0 revolution, which is followed by the future competencies required of human capital, conceptual framework for Smart Manufacturing and Industry 4.0 revolution, rewarding human capital in Smart Manufacturing and Industry 4.0 revolution and conclusion.

© 2016 The Author(s). Licensee InTech. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. © 2018 The Author(s). Licensee InTech. This chapter is distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/3.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.

### **1.1. An overview of Smart Manufacturing and Industry 4.0 revolution**

Ever since the origin of Industry 1.0 revolution in the seventeenth century till to date, the world has systematically gone through different phases of rapid industrial revolution with each marked with something totally different from the others. From Industry 1.0 revolution to Industry 2.0 and to Industry 3.0, countries have witnessed and experienced fast pace of technological changes. In Industry 1.0 revolution mass production was by powered steam powered or water engines that characterized it at that time. However, today no country or organisation can afford to take backseat and watch without being actively involved in Smart Manufacturing and Industry 4.0 revolution. The ingenuity of human beings in today's world has surpassed any human definitions of creativity, as human has transformed into super beings. Humans now possess great knowledge and how organisations will trade in such knowledge will make the difference in Smart Manufacturing and Industry 4.0 revolution.

• **Internet of Services** (IoS) – this is new approach to provide Internet-based services, concepts for product specific on demand, knowledge provision and services for controlling product behaviour. Interaction between people, machines and systems improve added value.

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• **Internet of Data** (IoD) – in this scenario, data is managed and shared using Internet technologies. This is because Cyber-Physical Systems are producing big data. There is the de-

The future of production is forecasted in Smart Manufacturing and Industry 4.0 revolution as one that is characterised by significant efficiency gains mainly through consequent digital integration and intelligentization of manufacturing processes [1]. This integration takes place on the horizontal axis across all participants in the entire value chain and on the vertical axis across all organisational levels [2]. In Smart Manufacturing and Industry 4.0 revolution, fully integrated and networked factories, machines and products act in an intelligent and partly autonomous way that requires minimal manual/human interventions [2]. Currently, Smart Manufacturing and Industry 4.0 revolution have introduced new concepts such as: Internet of Things (IoT), Industrial Internet (II), Cloud-based Manufacturing (C-BM) [3] and Smart Manufacturing addresses this vision of digitally enabled production and are commonly subsumed by the visionary concept of Industry 4.0 revolution [4]. In Smart Manufacturing and Industry 4.0 revolution, these concepts are related to recent technological progress where the Internet and supporting technologies (e.g. embedded systems) serve as the mainstay to integrate or create human-machine interface, materials, products, production lines and processes within and beyond organisational boundaries to form a new kind of intelligent, linked and

In Smart Manufacturing and Industry 4.0, learning organisations prove to be an indispensable means for educating students and professionals regarding practical application of production management principles and concepts. Lean management as a learning subject has clearly dominated the scene in the last decades. However, the current and future production scenarios in the sense of Smart Manufacturing and Industry 4.0 revolution also need other competencies to be addressed in order to enable today's managers and workers of organisa-

The Smart Manufacturing and Industry 4.0 is characterised by small decentralised, digitalised production networks, autonomously acting and capable of efficiently controlling their operations in response to changes in the environment and strategic goals [2]. The nodes of such a network are referred to as Smart Factories/Smart Manufacturing (SF/SM). This type of network is linked to a larger value chain network with the responsibility to fulfil a certain customer demand. In addition, assets such as machines and materials are situated at the underneath line of the whole automation pyramid, but are all well integrated through standardised interfaces. Last but not least, during manufacturing process, machines and products are inimitably identifiable and situated at all times in their entire lifecycles. These smart

tions to deal with the challenges of an increasingly digitalised production system [5].

**1.2. Future competencies for smart manufacturing**

velopment of a holistic security and safety culture.

agile value chain [2].

Smart Manufacturing and Industry 4.0 revolution are characterised by Mobile, Cloud, Big Data analytics, Machine to Machine (M2M), Man to Machine Interactions (M2MI), 3D Printing, Robotics and many more that will require organisations with specific expertise. It is also said that Industry 4.0 revolution goes far beyond these. Digital networks to Cyber-Physical Systems (CPS) are simple physical objects with embedded software and computing power. In Smart Manufacturing and Industry 4.0 revolution, it is predicted that more manufactured products will be smart products and Cyber-Physical Systems (CPS). This is based on the connectivity and computing power, leading to self-management capabilities. Today, most of the manufacturing equipment transform into Cyber-Physical Production Systems (CPPS), which is software enhanced machinery. This equipment has its own computing power, capitalising on a wide range of embedded sensors and actuators, which is beyond connectivity and processing power. The CPPS act and know their state, capacity and different configuration options and are able to take decisions independently just like human beings. This gives way to a mass production, which in turn gives mass customisation, each product at the end of the supply chain. The mass customisation ensures unique characteristics as defined by the end customer. The characteristic of the Smart Manufacturing and Industry 4.0 revolution supply chain is extremely visible, integrated and the physical flows continuously mapped on digital platforms. This makes individual service provided by CPPS available to achieve the needed activities to make each tailored product. Therefore, characteristics of Smart Manufacturing and Industry 4.0 revolution are as follows:


The future of production is forecasted in Smart Manufacturing and Industry 4.0 revolution as one that is characterised by significant efficiency gains mainly through consequent digital integration and intelligentization of manufacturing processes [1]. This integration takes place on the horizontal axis across all participants in the entire value chain and on the vertical axis across all organisational levels [2]. In Smart Manufacturing and Industry 4.0 revolution, fully integrated and networked factories, machines and products act in an intelligent and partly autonomous way that requires minimal manual/human interventions [2]. Currently, Smart Manufacturing and Industry 4.0 revolution have introduced new concepts such as: Internet of Things (IoT), Industrial Internet (II), Cloud-based Manufacturing (C-BM) [3] and Smart Manufacturing addresses this vision of digitally enabled production and are commonly subsumed by the visionary concept of Industry 4.0 revolution [4]. In Smart Manufacturing and Industry 4.0 revolution, these concepts are related to recent technological progress where the Internet and supporting technologies (e.g. embedded systems) serve as the mainstay to integrate or create human-machine interface, materials, products, production lines and processes within and beyond organisational boundaries to form a new kind of intelligent, linked and agile value chain [2].

In Smart Manufacturing and Industry 4.0, learning organisations prove to be an indispensable means for educating students and professionals regarding practical application of production management principles and concepts. Lean management as a learning subject has clearly dominated the scene in the last decades. However, the current and future production scenarios in the sense of Smart Manufacturing and Industry 4.0 revolution also need other competencies to be addressed in order to enable today's managers and workers of organisations to deal with the challenges of an increasingly digitalised production system [5].

### **1.2. Future competencies for smart manufacturing**

**1.1. An overview of Smart Manufacturing and Industry 4.0 revolution**

Industry 4.0 revolution.

42 Digital Transformation in Smart Manufacturing

and Industry 4.0 revolution are as follows:

connectivity.

Ever since the origin of Industry 1.0 revolution in the seventeenth century till to date, the world has systematically gone through different phases of rapid industrial revolution with each marked with something totally different from the others. From Industry 1.0 revolution to Industry 2.0 and to Industry 3.0, countries have witnessed and experienced fast pace of technological changes. In Industry 1.0 revolution mass production was by powered steam powered or water engines that characterized it at that time. However, today no country or organisation can afford to take backseat and watch without being actively involved in Smart Manufacturing and Industry 4.0 revolution. The ingenuity of human beings in today's world has surpassed any human definitions of creativity, as human has transformed into super beings. Humans now possess great knowledge and how organisations will trade in such knowledge will make the difference in Smart Manufacturing and

Smart Manufacturing and Industry 4.0 revolution are characterised by Mobile, Cloud, Big Data analytics, Machine to Machine (M2M), Man to Machine Interactions (M2MI), 3D Printing, Robotics and many more that will require organisations with specific expertise. It is also said that Industry 4.0 revolution goes far beyond these. Digital networks to Cyber-Physical Systems (CPS) are simple physical objects with embedded software and computing power. In Smart Manufacturing and Industry 4.0 revolution, it is predicted that more manufactured products will be smart products and Cyber-Physical Systems (CPS). This is based on the connectivity and computing power, leading to self-management capabilities. Today, most of the manufacturing equipment transform into Cyber-Physical Production Systems (CPPS), which is software enhanced machinery. This equipment has its own computing power, capitalising on a wide range of embedded sensors and actuators, which is beyond connectivity and processing power. The CPPS act and know their state, capacity and different configuration options and are able to take decisions independently just like human beings. This gives way to a mass production, which in turn gives mass customisation, each product at the end of the supply chain. The mass customisation ensures unique characteristics as defined by the end customer. The characteristic of the Smart Manufacturing and Industry 4.0 revolution supply chain is extremely visible, integrated and the physical flows continuously mapped on digital platforms. This makes individual service provided by CPPS available to achieve the needed activities to make each tailored product. Therefore, characteristics of Smart Manufacturing

• **Cyber-Physical Systems** (a fusion of the physical and the virtual worlds) CPS.

• **Internet of Things** (IoT) – comprises communicating smart systems using IP addresses. This communicates objects based on Internet technologies. Also, detect and identify using IPv6 addresses (128 bit address space). The advantage of this is that the detection, identification and location of physical objects and it communicates through The Smart Manufacturing and Industry 4.0 is characterised by small decentralised, digitalised production networks, autonomously acting and capable of efficiently controlling their operations in response to changes in the environment and strategic goals [2]. The nodes of such a network are referred to as Smart Factories/Smart Manufacturing (SF/SM). This type of network is linked to a larger value chain network with the responsibility to fulfil a certain customer demand. In addition, assets such as machines and materials are situated at the underneath line of the whole automation pyramid, but are all well integrated through standardised interfaces. Last but not least, during manufacturing process, machines and products are inimitably identifiable and situated at all times in their entire lifecycles. These smart materials and products are custom-built to a large extent at the costs of mass production in Smart Manufacturing and Industry 4.0 revolution.

and creativity is strategic. Therefore, allowing creative activities to be performed in distributed social settings, involving heterogeneous interdisciplinary and inter-organisational teams, require the ability to communicate complex problems in different languages as well [4].

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Therefore today, managers must build or act as mediators that permit social processes such as mutual decision processes, which is not only within customary organisational borders but also for the whole network [8]. Social media play a key role as supporting technology in the Smart Manufacturing and Industry 4.0 revolution [2]. Managers, engineers and workers now have to show literacy, skills, knowledge and abilities with different tastes of technical com-

Action-related competencies of a worker can be understood as 'the ability to take individual or socially constructed ideas to action' that transforms dreams into reality in Smart Manufacturing and Industry 4.0 revolution. It is the ability of an individual to integrate concepts into its own agenda, to successfully transfer plans into reality, not only on the individual but also on an organisational level [6]. It is worth noting that these concepts could be in their

Digitalisation production inevitably leads to high financial and technological efforts for the Smart Manufacturing and Industry 4.0 revolution. The inherent risk associated with such efforts needs pragmatic thinkers and actors to bring down the 'sky-high' vision of Industry 4.0 revolution to the shop floor, where majority of the workers are engaged [4]. Both managers and workers require strong analytical skills and ability to find domain-specific and practicable solutions without losing the overall goal, which is the key competencies. To accomplish this, therefore, managers must break down complex concepts into realistic work packages, to find and to assign appropriate people and teams [2]. Smart Manufacturing and Industry 4.0 are not a straightforward methodology or technology. Managers are required to encourage taking new routes but also take into account the risk of failures. For workers and managers alike a strong interdisciplinary "out-of-the box" orientation is likely to facilitate solutions

This is referred to the ability to access and use domain knowledge for a job or a specific task [6]. The key elements of the domain knowledge are methodologies, languages and tools that are designed for problem solving or business domain and reaches beyond marginal. A core element of Smart Manufacturing and Industry 4.0 revolution is the full digitalisation of planning and the exploitation of data. The full digitalisation acts facilitates intelligent planning, control production processes and networks [2]. Production processes and networks (also those in the future) have domain peculiarities that require domain-specific competencies. Digitalised and intelligently managed production processes require works that are capable to understand the basics of network technologies and data processing [4]. Therefore, workers need to appraise whether the subsystems are performing as expected and must be able to interact with such

abstracts forms and therefore need to be reflected in their real sense of meanings.

munication and support systems [9].

finding in complex environments [2].

*1.2.4. Domain-related competencies*

*1.2.3. Action-related competencies*

#### *1.2.1. Personal competencies*

The question that one may want to ask is what type of personal competencies, skills and abilities is needed to fit well in Smart Manufacturing and Industry 4.0 revolution? Such competencies can be viewed as the ability of a person to act in a reflective and autonomous manner [2]. In nutshell, such competence comprises the ability to learn (develop cognitive abilities), to develop an own attitude and ethic value system that a person may possess. In addition, at the level of a worker, Smart Manufacturing and Industry 4.0 have created an increased automation of routine tasks never witnessed before. Today's workers have to face the fact that their present tasks no longer exist in the future, because the future promises uneven playground. The workers tasks keep on changing rapidly and there is a need to upkeep with the changes in the tasks. The rationale is that the digitals, Internet of Things and Networked Systems have eradicated some or most of the tasks, the worker currently performs [6]. This may require the ability to look at a person's own task perspective taking into account the bigger picture of the society as a whole (the challenges, resource scarcity, opportunities and wealth). In addition, opportunities for a person's own development and the commitment to lifelong learning should be the responsibility of both the individual and the organisation [3]. However, rather than developing naïve technology, devoutness as a critical attitude towards technological developments is a key asset for the future worker and organisation in Smart Manufacturing and Industry 4.0 revolution [2].

Personal flexibility with respect to work time, work contents, workplaces and mindsets are prerequisites competencies for an agile production, to respond quickly to market need and environmental situations. In addition, today and future managers need the ability to transform their management and leadership styles from power-driven to value-driven [7], as the teams of the Smart Manufacturing and Industry 4.0 are diverse both in culture, education and geographical location.

#### *1.2.2. Social/interpersonal competencies*

This is conceived as an individual who is embedded in a social setting, for example, like human beings and organisations also need the ability to communicate, cooperate and establish social connections, structures with other individuals and groups [6]. This is because organisations are social systems where interactions take place between different players (human-machines, human-human, etc.). The full digital integration and automation of the Smart Manufacturing processes in the vertical and horizontal dimension entails as well an automation of communication and collaboration mainly along standardised processes. Consequently, workers are responsible for a broader process scope and need the capability to comprehend the relations between processes, information flows, possible disturbances and potential solutions to such interfaces. The increase in scope and complexity of Smart Manufacturing and Industry 4.0 require a mindset geared towards building and maintaining networks of experts that are capable of cooperating in finding the ideal solutions to a particular problem. Currently, human work now concentrates at the edges of interfaces in which human flexibility in problem solving and creativity is strategic. Therefore, allowing creative activities to be performed in distributed social settings, involving heterogeneous interdisciplinary and inter-organisational teams, require the ability to communicate complex problems in different languages as well [4].

Therefore today, managers must build or act as mediators that permit social processes such as mutual decision processes, which is not only within customary organisational borders but also for the whole network [8]. Social media play a key role as supporting technology in the Smart Manufacturing and Industry 4.0 revolution [2]. Managers, engineers and workers now have to show literacy, skills, knowledge and abilities with different tastes of technical communication and support systems [9].

#### *1.2.3. Action-related competencies*

materials and products are custom-built to a large extent at the costs of mass production in

The question that one may want to ask is what type of personal competencies, skills and abilities is needed to fit well in Smart Manufacturing and Industry 4.0 revolution? Such competencies can be viewed as the ability of a person to act in a reflective and autonomous manner [2]. In nutshell, such competence comprises the ability to learn (develop cognitive abilities), to develop an own attitude and ethic value system that a person may possess. In addition, at the level of a worker, Smart Manufacturing and Industry 4.0 have created an increased automation of routine tasks never witnessed before. Today's workers have to face the fact that their present tasks no longer exist in the future, because the future promises uneven playground. The workers tasks keep on changing rapidly and there is a need to upkeep with the changes in the tasks. The rationale is that the digitals, Internet of Things and Networked Systems have eradicated some or most of the tasks, the worker currently performs [6]. This may require the ability to look at a person's own task perspective taking into account the bigger picture of the society as a whole (the challenges, resource scarcity, opportunities and wealth). In addition, opportunities for a person's own development and the commitment to lifelong learning should be the responsibility of both the individual and the organisation [3]. However, rather than developing naïve technology, devoutness as a critical attitude towards technological developments is a key asset for the future worker and organisation in Smart Manufacturing and Industry 4.0 revolution [2]. Personal flexibility with respect to work time, work contents, workplaces and mindsets are prerequisites competencies for an agile production, to respond quickly to market need and environmental situations. In addition, today and future managers need the ability to transform their management and leadership styles from power-driven to value-driven [7], as the teams of the Smart Manufacturing and Industry 4.0 are diverse both in culture, education and

This is conceived as an individual who is embedded in a social setting, for example, like human beings and organisations also need the ability to communicate, cooperate and establish social connections, structures with other individuals and groups [6]. This is because organisations are social systems where interactions take place between different players (human-machines, human-human, etc.). The full digital integration and automation of the Smart Manufacturing processes in the vertical and horizontal dimension entails as well an automation of communication and collaboration mainly along standardised processes. Consequently, workers are responsible for a broader process scope and need the capability to comprehend the relations between processes, information flows, possible disturbances and potential solutions to such interfaces. The increase in scope and complexity of Smart Manufacturing and Industry 4.0 require a mindset geared towards building and maintaining networks of experts that are capable of cooperating in finding the ideal solutions to a particular problem. Currently, human work now concentrates at the edges of interfaces in which human flexibility in problem solving

Smart Manufacturing and Industry 4.0 revolution.

*1.2.1. Personal competencies*

44 Digital Transformation in Smart Manufacturing

geographical location.

*1.2.2. Social/interpersonal competencies*

Action-related competencies of a worker can be understood as 'the ability to take individual or socially constructed ideas to action' that transforms dreams into reality in Smart Manufacturing and Industry 4.0 revolution. It is the ability of an individual to integrate concepts into its own agenda, to successfully transfer plans into reality, not only on the individual but also on an organisational level [6]. It is worth noting that these concepts could be in their abstracts forms and therefore need to be reflected in their real sense of meanings.

Digitalisation production inevitably leads to high financial and technological efforts for the Smart Manufacturing and Industry 4.0 revolution. The inherent risk associated with such efforts needs pragmatic thinkers and actors to bring down the 'sky-high' vision of Industry 4.0 revolution to the shop floor, where majority of the workers are engaged [4]. Both managers and workers require strong analytical skills and ability to find domain-specific and practicable solutions without losing the overall goal, which is the key competencies. To accomplish this, therefore, managers must break down complex concepts into realistic work packages, to find and to assign appropriate people and teams [2]. Smart Manufacturing and Industry 4.0 are not a straightforward methodology or technology. Managers are required to encourage taking new routes but also take into account the risk of failures. For workers and managers alike a strong interdisciplinary "out-of-the box" orientation is likely to facilitate solutions finding in complex environments [2].

#### *1.2.4. Domain-related competencies*

This is referred to the ability to access and use domain knowledge for a job or a specific task [6]. The key elements of the domain knowledge are methodologies, languages and tools that are designed for problem solving or business domain and reaches beyond marginal. A core element of Smart Manufacturing and Industry 4.0 revolution is the full digitalisation of planning and the exploitation of data. The full digitalisation acts facilitates intelligent planning, control production processes and networks [2]. Production processes and networks (also those in the future) have domain peculiarities that require domain-specific competencies. Digitalised and intelligently managed production processes require works that are capable to understand the basics of network technologies and data processing [4]. Therefore, workers need to appraise whether the subsystems are performing as expected and must be able to interact with such systems through suitable interfaces. In case of disruptions, workers and engineers must be able to analyse complex systems through specialised software [6]. Engineers are required to acquire skills, knowledge and abilities about state-of-the-art software architectures, modelling and programming techniques [4]. In addition, statistical methods and data mining techniques are key capabilities for future production engineers [10].

Industry 4.0 revolution. Education revolutions require a national culture that is supportive to such initiatives from government, where the citizens feel they have something to contribute towards achieving Smart Manufacturing and Industry 4.0 revolution goals. Hence, result in producing human capital that is capable to benefit Industry 4.0 revolution needs for Smart

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There is enough evidence that a country's education system plays an important role in its social, economic and political development. Most successful countries are successful because of their education system, for example, Japan education system requires that from class one to three, children are only taught Japanese moral values and nothing else. This is to ensure that they are imbibed with the Japanese's culture and education system that is supportive of Japanese's work environment ethics. Classrooms should foster quality environment capable of creative thinking and divergent views among children irrespective of their ages and stages of their education. Embracing technologies at an early age make such children more adaptable to the needs of Smart Manufacturing and Industry 4.0 revolution as opposed to adoptions and diffusions of such technologies at a later stage. Education for Smart Manufacturing and Industry 4.0 revolution is defined by technology literacy, information literacy, media creativity, social competence and responsibility, workplace skills and civic engagement. This is because the information made available dramatically increase, hence requiring people to have new skills to critically access and process content to ensure the best social communication and interaction. Smart Manufacturing and Industry 4.0 revolution present an opportunity as well as challenges to nations' education systems and only those nations whose education systems are anchored in inclusiveness and technologies imperatives will remain competitive. It is evident that, Smart Manufacturing and Industry 4.0 revolution rely more on the convergence of networks and devices to build bridges between people and countries. On the one hand, nations are already moving towards digital democracy to make their citizens productive and engaged participants in democracy. While on the other hand, in the workplace, more people are needed with technological skills to meet the demand of digital workplace worldwide. To meet all these demands for Smart Manufacturing and Industry 4.0 revolution, lifelong learning is necessary to ensure that everyone can stay informed. Universities have to lead research efforts not only to identify the skills but also to produce calibre of workforce that have the skills needed in the Smart Manufacturing and Industry 4.0 revolution. The questions that we need to address are: what sort of education systems is conducive for the Smart Manufacturing and Industry 4.0 revolution? How can we match education,

**3. Education in Smart Manufacturing and Industry 4.0 revolution**

knowledge and skills with that of Smart Manufacturing and Industry 4.0 revolution?

The evaluation of the competitiveness in the higher education sector should apply the approach that appraises the competitive advantage of the present systems with its legal, political, economic, social and technological factors [11]. The appropriateness of this method is based on the growth of a higher education environment that inspires, allows and safeguards a competitive higher education system. This takes an active part in increasing the standard of public (society) welfare and satiating the public interests through innovative approaches [11] as shown in

Manufacturing competitiveness.

In summary, human-machine interfaces in the Smart Manufacturing and Industry 4.0 revolution have to be developed based on the user-centred approach with a task- and situation-orientation.
