**3. Digital technologies and industrial transformations**

The key objective of Industry 4.0 is to be faster and to drive manufacturing to be more efficient. The main technology used in the context of Industry 4.0 is **cyber-physical systems (CPS)** [19]. CPS are considered a Key Enabling Technology (KET) in the fourth industrial revolution. CPS are a set of different enabling technologies, which generate a stand-alone, intercom, and intelligent system and, therefore, can facilitate integration between different and physically distant subjects. This system enables three sequential scenarios: *data generation and acquisition*, *computation and aggregation of previously acquired data*, and finally *decision support*. This definition includes the presence of interconnected objects which, by means of **sensors**, **actuators**, and a **network connection**, are able to generate data, thus reducing the distances between the various subjects involved. Therefore, a CPS can be defined as a system in which physical objects are required to be flanked by their representation in the digital world; are integrated with elements that are capable of computing, memorizing, and communicating; and are networked with each other [20]. The functionality of a CPS can be summarized in five levels, as defined below:


3D printing for the production of finished products is used for highly personalized products, such as biophysical part or parts for cars of formula 1. New educational models 4.0 exploit increased reality technology, through **augmented reality**. Through virtual reality it is possible to educate operators, by teaching the right operations to do for maintenance or machine setup. The augmented reality system aims to replace old paper manuals that are difficult to understand. Through **horizontal and vertical integration** technology, it is possible to cross company data integration based on data transfer standards. In other words**,** computer and

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Finally, **simulation systems** and software are also very much used. Through these tools it is possible to simulate business systems and manufacturing processes by analyzing system input and output in real time and obtaining a detailed report about the process under study. Industry 4.0 has developed a profound impact on society, factories, household, public sector, economies, etc. There are developing countries that are already preparing for and adopting strategies regarding Industry 4.0, such as China and India. A major challenge for developing countries is to reverse their strategy. In the past, they have pointed to low labor costs. With the advent of Industry 4.0, this is not possible because it is necessary to have highly specialized operators. Industry 4.0 offers opportunities, such as increased productivity, reduced waste, and promotion of the circular economy and more sustainable patterns of production

Industry 4.0 requires different **prerequisites** for its application. Digital skills are definitely the most important factors. In addition, other important elements are automation and big data

command processes are increasingly networked and integrated.

**Figure 6.** Enabling technologies for Industry 4.0.

and consumption [22].

Following the development of CPS, the fourth industrial revolution is characterized by the use of specific enabling technologies. The main nine technologies are described below and depicted in **Figure 6**.

**Big data** is certainly one of the most important technologies adopted in Industry 4.0. It is related to the large collection, processing, and analysis of structured and unstructured data with intelligent algorithms. It has recently become a topic widely debated in the business and university world, as it offers a number of new opportunities for businesses. Another important technology is **cloud computing** that allows to manage huge data volumes in open systems and ensure real-time communication for production system. Cloud computing allows access to information from anywhere in the world at any time, thus increasing flexibility [21]. In intelligent factory, data are transmitted digitally, so **cybersecurity** plays a key role in the new industrial revolution. IT security systems are important to enable the full potential of the other technologies. Industry 4.0 includes the use of **automated robots** managed directly by the intelligent factory and connected to the rest of the enterprise system. Processing is automatically handled by cyber-physical systems. Generally, automatic robots are used for ergonomically difficult or highly tiring jobs. The evolution of technological systems and the increasingly personalized demands of customers have led to the evolution of **additive manufacturing** techniques and 3D printing. Through this technique, it is possible to construct prototypes but also finished products in three sizes for the most different purposes. With prototypes it is possible to test the material while the finished products are used. In particular, Fourth Industrial Revolution: Current Practices, Challenges, and Opportunities http://dx.doi.org/10.5772/intechopen.72304 9

**Figure 6.** Enabling technologies for Industry 4.0.

CPS are a set of different enabling technologies, which generate a stand-alone, intercom, and intelligent system and, therefore, can facilitate integration between different and physically distant subjects. This system enables three sequential scenarios: *data generation and acquisition*, *computation and aggregation of previously acquired data*, and finally *decision support*. This definition includes the presence of interconnected objects which, by means of **sensors**, **actuators**, and a **network connection**, are able to generate data, thus reducing the distances between the various subjects involved. Therefore, a CPS can be defined as a system in which physical objects are required to be flanked by their representation in the digital world; are integrated with elements that are capable of computing, memorizing, and communicating; and are networked with each other [20]. The functionality of a CPS can be summarized in five levels, as defined below:

• **Level #1. Smart connection**: The ability to manage and acquire data made available in real time thanks to intelligent sensors and to transfer them with specific communication

• **Level #2. Data-to-information conversion**: The ability to aggregate data and convert it to

• **Level #4. Cognition**: The ability to identify different scenarios and support a proper deci-

• **Level #5. Configuration**: Provides feedback on physical reality from virtual reality and ap-

Following the development of CPS, the fourth industrial revolution is characterized by the use of specific enabling technologies. The main nine technologies are described below and

**Big data** is certainly one of the most important technologies adopted in Industry 4.0. It is related to the large collection, processing, and analysis of structured and unstructured data with intelligent algorithms. It has recently become a topic widely debated in the business and university world, as it offers a number of new opportunities for businesses. Another important technology is **cloud computing** that allows to manage huge data volumes in open systems and ensure real-time communication for production system. Cloud computing allows access to information from anywhere in the world at any time, thus increasing flexibility [21]. In intelligent factory, data are transmitted digitally, so **cybersecurity** plays a key role in the new industrial revolution. IT security systems are important to enable the full potential of the other technologies. Industry 4.0 includes the use of **automated robots** managed directly by the intelligent factory and connected to the rest of the enterprise system. Processing is automatically handled by cyber-physical systems. Generally, automatic robots are used for ergonomically difficult or highly tiring jobs. The evolution of technological systems and the increasingly personalized demands of customers have led to the evolution of **additive manufacturing** techniques and 3D printing. Through this technique, it is possible to construct prototypes but also finished products in three sizes for the most different purposes. With prototypes it is possible to test the material while the finished products are used. In particular,

• **Level #3. Digital twin**: The ability to represent real time in a digital reality

protocols

value-added information

8 Digital Transformation in Smart Manufacturing

sion-making process

depicted in **Figure 6**.

plies corrective actions to the previous level

3D printing for the production of finished products is used for highly personalized products, such as biophysical part or parts for cars of formula 1. New educational models 4.0 exploit increased reality technology, through **augmented reality**. Through virtual reality it is possible to educate operators, by teaching the right operations to do for maintenance or machine setup. The augmented reality system aims to replace old paper manuals that are difficult to understand. Through **horizontal and vertical integration** technology, it is possible to cross company data integration based on data transfer standards. In other words**,** computer and command processes are increasingly networked and integrated.

Finally, **simulation systems** and software are also very much used. Through these tools it is possible to simulate business systems and manufacturing processes by analyzing system input and output in real time and obtaining a detailed report about the process under study.

Industry 4.0 has developed a profound impact on society, factories, household, public sector, economies, etc. There are developing countries that are already preparing for and adopting strategies regarding Industry 4.0, such as China and India. A major challenge for developing countries is to reverse their strategy. In the past, they have pointed to low labor costs. With the advent of Industry 4.0, this is not possible because it is necessary to have highly specialized operators. Industry 4.0 offers opportunities, such as increased productivity, reduced waste, and promotion of the circular economy and more sustainable patterns of production and consumption [22].

Industry 4.0 requires different **prerequisites** for its application. Digital skills are definitely the most important factors. In addition, other important elements are automation and big data analysis that connect all stakeholders of a system and create a smart network that transmits real-time data. The correct implementation of a 4.0 system within a company depends on its ability to respond to change and innovation management.

analyze the data [25]. Companies should take advantage of the opportunities offered by CPS

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Further challenge for companies will be the security of computer data. Standard will be needed to ensure communication between intelligent systems by avoiding any external intrusion. Companies face the challenge of ensuring that their operations are safe to avoid data leaks that could compromise their competitiveness and include the loss of confidential infor-

Companies implement 4.0 systems that have been developed and tested by **research organizations**. Therefore, it is crucial to invest and progress technologically in research centers that

In Germany, Industry 4.0 was born in the direction of developing a collaboration of all stakeholders. Now, a new phase has started that aims to overcome national borders and establish

From a PWC analysis on a sample of 235 European companies (**Figure 8**), it is noted that an average about 3.3% of 4.0 investment revenue is invested in Industry 4.0 applications [26].

Only a quarter of the surveyed companies do not have the skills related to Industry 4.0. Intelligent industrial solutions enable to improve efficiency and reduce costs across the value chain. The investments of the analyzed companies correspond to 140 billion euros. Of these, 3.9% is intended for information and communication, and 3.5% is for industrial production

Investment priority shows the supply chain at first, followed by engineering and services,

In 5 years, more than 80% of companies will have to digitize their value chain. The industrial Internet has now been added to the agenda of the majority of companies. One-fourth of the respondents already classify the current degree of digitization of their value chain as high. In concrete terms, this means that most of the companies are already using or have implemented

Industry 4.0 affects different sectors, and this is one of its strengths. The major industrial sectors examined by Accenture and General Electric [27], which are heavily influenced by the industrial revolution, are manufacturing, oil and gas, power generation/distribution, railway,

The **economics opportunities** of Industry 4.0 are wide and affect the entire economies and countries. Several studies and figures have been published in recent years illustrating the value of these new developments. A survey developed by Accenture [28] predicts the IoT

to generate added value from the collected data to meet customer needs.

new international collaborations, especially at the European level.

**Figure 7** shows the main initiatives for Industry 4.0.

while distribution takes on lesser values (**Figure 10**).

industrial Internet solutions in different divisions (**Figure 11**).

mation on major customers.

and engineering (**Figure 9**).

and mining.

are the lifeblood of the industrial system.

**4. Opportunities of Industry 4.0**

The most important steps for supporting Industry 4.0 are:


Another key prerequisite for implementing system 4.0 is related to the skills of operators (the last paragraph analyzes this topic in depth).

It is crucial to distinguish the expected **changes** with the implementation of the 4.0 systems. In this case it is considered the change of a developed country, developing country, business manufacturing, and research organization.

For **a developed country**, the implementation of 4.0 systems involves several challenges:


There are three major challenges for **developing countries**:


The implementation of an Industry 4.0 system involves significant changes to **business manufacturing.** Firstly, it is necessary to attract strong investments, as the industrial Internet is expecting a great digitization and therefore a strong investment [23]. In addition to investments, it is important to promote strong leadership practices to promote the proposed changes. If the company is not open to change, it will fail. Another major obstacle to the digitization process is the inability to predict the return on investment, and this pushes many companies to invest.

According to Accenture and General Electric [24], a major change concerns big data analytics, since all operations will be managed by intelligent sensor systems, which will have to transmit huge volumes of data in a shorter time. The task of the operator will be to capture and analyze the data [25]. Companies should take advantage of the opportunities offered by CPS to generate added value from the collected data to meet customer needs.

Further challenge for companies will be the security of computer data. Standard will be needed to ensure communication between intelligent systems by avoiding any external intrusion. Companies face the challenge of ensuring that their operations are safe to avoid data leaks that could compromise their competitiveness and include the loss of confidential information on major customers.

Companies implement 4.0 systems that have been developed and tested by **research organizations**. Therefore, it is crucial to invest and progress technologically in research centers that are the lifeblood of the industrial system.
