**4. Opportunities of Industry 4.0**

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

Another key prerequisite for implementing system 4.0 is related to the skills of operators (the

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

• The need for experimentation and learning, to give a way for companies to strengthen their

• Transformation of the workforce, integrating the system operators with new skills that en-

• Scalability. There are few companies that have now implemented industry-leading 4.0

• The need for funding to start planning at the national or regional level for the implementa-

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

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

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

• Data explosion, to send information more and more quickly and increase data volume

able it to manage work digitally with the help of cyber-physical systems

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

• Training of operators with specific skills in managing digital jobs.

ability to respond to change and innovation management. The most important steps for supporting Industry 4.0 are:

• Step#1: Create awareness of the importance of innovation.

• Step#2: Educate the innovation management.

• Step#3: Identify potential improvements.

10 Digital Transformation in Smart Manufacturing

last paragraph analyzes this topic in depth).

manufacturing, and research organization.

business

systems.

tion of systems 4.0.

companies to invest.

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 new international collaborations, especially at the European level.

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

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 and engineering (**Figure 9**).

Investment priority shows the supply chain at first, followed by engineering and services, while distribution takes on lesser values (**Figure 10**).

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

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, and mining.

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

• *Individualization on demand*: integration of customer through network (cyber-physical

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**Other opportunities** are related to the new technologies integrated into the 4.0 systems. The fourth industrial revolution is characterized by the merger of digitization and automation to make the machines intelligent, interactive, and easy to use. These new technologies will have a huge impact on working patterns. There will be new types of robots that can interact with humans. This technology will complement human activity, in particular cognition, combined with other emerging technologies to give us completely new computer models. Thus, *new skills* are needed to bridge the gap between engineering and computer science, automatic learning, and artificial intelligence. Industry 4.0 must also be a suitable tool for **eco-sustainable production**. This is because industry will continue to depend on resources and energy, and each country will play in the production and supply of resources and energy. In order to combat climate change, China has promised to reduce the intensity

**Figure 8.** Average annual investments in Industry 4.0 applications (Source: PWC Industry 4.0, 2014).

**Figure 9.** Annual investment in Industry 4.0 (Source: PWC Industry 4.0, 2014).

• *Decentralization*: faster and data-driven decision-making

systems)

**Figure 7.** Main initiatives for Industry 4.0 (source: IL sole 24 Ore magazine).

value for countries including the United States, China, Germany, and the United Kingdom by 2030. The United States is likely to have the biggest benefits (US \$ 7.1 billion) followed by China (US \$ 1.8 trillion), Germany (\$ 700 billion), and the United Kingdom (\$ 531 billion). This study highlights the extraordinary opportunities offered by Industry 4.0. The significance becomes even more evident given the value added to GDP by the manufacturing sector in different countries. For example, the production contributed 22% of Germany's GDP in 2013 and 12% of US GDP in 2013 [28]. Another great opportunity created by Industry 4.0 is the strengthening of national production in Europe and North America. As a result, it could also convey the trend of the outsourcing industry to low-cost and low-income countries, due to changes in production requirements and factors [29].

To achieve **business opportunities** at the national level, manufacturing enterprises need to recognize the new possibilities that offer companies Industry 4.0 paradigm [30] that could exist in different fields, as follows:


**Other opportunities** are related to the new technologies integrated into the 4.0 systems. The fourth industrial revolution is characterized by the merger of digitization and automation to make the machines intelligent, interactive, and easy to use. These new technologies will have a huge impact on working patterns. There will be new types of robots that can interact with humans. This technology will complement human activity, in particular cognition, combined with other emerging technologies to give us completely new computer models. Thus, *new skills* are needed to bridge the gap between engineering and computer science, automatic learning, and artificial intelligence. Industry 4.0 must also be a suitable tool for **eco-sustainable production**. This is because industry will continue to depend on resources and energy, and each country will play in the production and supply of resources and energy. In order to combat climate change, China has promised to reduce the intensity

value for countries including the United States, China, Germany, and the United Kingdom by 2030. The United States is likely to have the biggest benefits (US \$ 7.1 billion) followed by China (US \$ 1.8 trillion), Germany (\$ 700 billion), and the United Kingdom (\$ 531 billion). This study highlights the extraordinary opportunities offered by Industry 4.0. The significance becomes even more evident given the value added to GDP by the manufacturing sector in different countries. For example, the production contributed 22% of Germany's GDP in 2013 and 12% of US GDP in 2013 [28]. Another great opportunity created by Industry 4.0 is the strengthening of national production in Europe and North America. As a result, it could also convey the trend of the outsourcing industry to low-cost and low-income countries, due to

To achieve **business opportunities** at the national level, manufacturing enterprises need to recognize the new possibilities that offer companies Industry 4.0 paradigm [30] that could

changes in production requirements and factors [29].

**Figure 7.** Main initiatives for Industry 4.0 (source: IL sole 24 Ore magazine).

• *Efficiency*: savings of raw materials and energy

• *Flexibility*: use of cyber-physical systems

• *Productivity*: intelligent technologies that are more productive

exist in different fields, as follows:

12 Digital Transformation in Smart Manufacturing

**Figure 9.** Annual investment in Industry 4.0 (Source: PWC Industry 4.0, 2014).

**Figure 10.** Priority of investments (Source: PWC Industry 4.0, 2014).

**Figure 11.** Degree of digitization of the value chain by industry sector (Source: PWC Industry 4.0, 2014).

of carbon dioxide emissions from 60–65% by 2030, compared to 2005. The main objective of the strategy is to ensure that Chinese production is geared toward innovation and green. It has ten priority development areas, including energy conservation and new energy vehicles, electrical equipment, and modern rail equipment, which aim to reduce carbon dioxide emissions. Some examples are energy-saving (mainly electric) vehicles, third-generation nuclear power plants, and the construction of new high-speed railways between Beijing and Shanghai, 1200 km away. The PWC survey reports the percentage of companies that have increased their efficiency and that have decreased costs. **Figures 12** and **13** show the quantitative effects of the benefits of Industry 4.0 applications, considering the efficiency increase and cost reduction, while **Figure 14** describes the quality benefits of Industry 4.0 applications.

**5. Qualification and skills of Industry 4.0**

**Figure 12.** Increase in efficiency (Source: PWC Industry 4.0, 2014).

**Figure 13.** Cost reduction (Source: PWC Industry 4.0, 2014).

have some different skills than those required today [31].

**Figure 14.** Quality benefits of Industry 4.0 applications (source: PWC Industry 4.0, 2014).

The work of the future will be very different from the traditional work, so traders will also

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**Figure 12.** Increase in efficiency (Source: PWC Industry 4.0, 2014).

**Figure 13.** Cost reduction (Source: PWC Industry 4.0, 2014).

of carbon dioxide emissions from 60–65% by 2030, compared to 2005. The main objective of the strategy is to ensure that Chinese production is geared toward innovation and green. It has ten priority development areas, including energy conservation and new energy vehicles, electrical equipment, and modern rail equipment, which aim to reduce carbon dioxide emissions. Some examples are energy-saving (mainly electric) vehicles, third-generation nuclear power plants, and the construction of new high-speed railways between Beijing and Shanghai, 1200 km away. The PWC survey reports the percentage of companies that have increased their efficiency and that have decreased costs. **Figures 12** and **13** show the quantitative effects of the benefits of Industry 4.0 applications, considering the efficiency increase and cost reduction, while **Figure 14** describes the quality benefits of Industry 4.0

**Figure 11.** Degree of digitization of the value chain by industry sector (Source: PWC Industry 4.0, 2014).

**Figure 10.** Priority of investments (Source: PWC Industry 4.0, 2014).

14 Digital Transformation in Smart Manufacturing

applications.

**Figure 14.** Quality benefits of Industry 4.0 applications (source: PWC Industry 4.0, 2014).

### **5. Qualification and skills of Industry 4.0**

The work of the future will be very different from the traditional work, so traders will also have some different skills than those required today [31].

Influence on the human factor is linked to four elements: (1) tools and technologies, (2) organization and structure, (2) working environment, and (4) organizational cooperation.

computer science. Fundamentals are also visits to smart factories, to introduce students to the

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*Phase #2: School (work transition)*. Professional development courses are crucial to giving a first technical qualification to future workers. Workshops are recommended as they strengthen technical skills and qualifications. Workshops cannot only tackle both technical issues but also refine soft skills (self-management, teamwork, stress management, etc.) that are fundamental to the worker. The collaboration of university companies that allows to adapt the student profiles with the demands of the companies is very important. Students will be in contact with companies through their university. Developing professional bachelor's degrees to train the intelligent factory operator and give more insights than those already provided in

Finally, the internships are very important, as they allow students to know experiences in the company. They include not only both technical aspects but also interdisciplinary models such

*Phase #3: Continuous training*. The last phase involves the continuous training of the operator in the workplace. Companies can only be competitive by investing in continuous training and improvement. Accenture [34] reviewed more than 300 US manufacturing companies between 2013 and 2014 and found that 80% of companies invest around \$ 1000 each year in training of each employee. Professional courses enhance technical and personal skills such as World

Several advanced economies are implementing the concept of Industry 4.0, marking the fourth industrial revolution. Increasingly, companies are applying innovative solutions, including through the "Internet of Things" (IoT), cloud computing, miniaturization, and 3D printing, that will enable more interoperability, flexible industrial processes, and autonomous and intelligent manufacturing. The new industrial revolution will be characterized by merging of technologies. Among the consequences of "Industry 4.0" and structural problems in the world, economy will be an escalation in competition at the geo-economic level. Industry 4.0 will concur to create new wealth and further improve living standards. The implementation of a 4.0 systems has considerable advantages. This chapter has analyzed a series of data showing efficiency increase and cost reductions for European companies that have implemented smart manufacturing systems. The implementation of a 4.0 system represents a real revolution within the company. In addition, the implementation of intelligent systems implies a considerable economic investment, and often the company cannot assess the economic return of that investment. For this reason, it is necessary to develop national or regional investment plans to encourage companies to invest in the 4.0 revolution. Companies that remain out of this revolution could disappear, as they would remain technologically obsolete with respect to their competitors. Before developing digitized systems, it is necessary to check if there are any prerequisites within the company to ensure the correct implementation of the new system. If there are no proper prerequisites, the first step to digitizing the company is to invest in training and information activities to train operators. As far as training

company and to give the company the opportunity to present their technologies.

high school and to develop technical skills and soft skills.

Class Manufacturing or Six Sigma belt, which also enable certifications.

as personal skills and teamwork.

**6. Conclusions**

In the future factory will increase the need for skilled digital work, will decrease the need for manual work, and will provide the worker with the exact information they need in real time or in a certain situation to perform their task efficiently. Workers are able to control and monitor production processes through the analysis of data and information supported by these devices. Intelligent systems will further make it possible for the worker to make qualified decisions in a shorter time. Collaborative robotics will share a work station with humans. These robots support the worker, for example, in situations that are critical with respect to ergonomics. Intelligent tools and technologies will become more autonomous and automated, but the supervision and efficient application of machines by humans will become more important than ever before.

Technologies can perform at high efficiency if the organization and structure of a company provide the right environment for them [32]. So, a significant change in the used technologies should and will proceed jointly with a significant change in organization and structure. Workers, capable of working with the information and data flow, will not necessarily be bound to a certain production area anymore, but the new operator skills will improve job management by making it more qualified, responsive, and more decision-making.

In the recent past, the world of industrial production was perceived from the outside as being a dark and dirty place with no windows where raw physical work is carried out by a horde of [33]. The perception of the working environment of the future will again be different. The future working environment will be an open and creative space. Work will be more flexible and transparent, more planned, and balanced. Surely, the homework will increase. Modern assistant systems will provide the workers with the ability for quick decision-making despite the increased complexity of their job contents. The work will be improved with respect to ergonomics. In particular, non-ergonomics processes are likely to become automated to improve the production workers' conditions.

In the factory of the future, intraorganizational cooperation and communication will be fundamental. Networking and interconnectedness are focal components of the Industry 4.0. Workers will collaborate and communicate real time without borders using smart devices. The Internet provides the possibilities to meet globally in virtual rooms at almost any time and to reach out for required information as needed. All kinds of information and data will be ubiquitous and at the fingertips of the workers leading to a whole new level of knowledge management. Humans communicate with other humans and with intelligent machines.

It is necessary to define a model to identify the skills of operators required in the factory of the future, from the school's point of view, and after school.

Here, below is a summary of the main phases required to ensure appropriate skills.

*Phase #1: Education*. It is necessary to attract the attention to the manufacturing topics already in the school education system. The ideal would be the creation of educational courses required for the introduction of the systems behind the factory of the future, to prepare future workers. Similarly, computer courses and foreign language that often are optional should be mandatory. The school placements should become more common, limiting the bureaucracy. Extension of the offer summer schools with enhanced programs to raise awareness of computer science. Fundamentals are also visits to smart factories, to introduce students to the company and to give the company the opportunity to present their technologies.

*Phase #2: School (work transition)*. Professional development courses are crucial to giving a first technical qualification to future workers. Workshops are recommended as they strengthen technical skills and qualifications. Workshops cannot only tackle both technical issues but also refine soft skills (self-management, teamwork, stress management, etc.) that are fundamental to the worker. The collaboration of university companies that allows to adapt the student profiles with the demands of the companies is very important. Students will be in contact with companies through their university. Developing professional bachelor's degrees to train the intelligent factory operator and give more insights than those already provided in high school and to develop technical skills and soft skills.

Finally, the internships are very important, as they allow students to know experiences in the company. They include not only both technical aspects but also interdisciplinary models such as personal skills and teamwork.

*Phase #3: Continuous training*. The last phase involves the continuous training of the operator in the workplace. Companies can only be competitive by investing in continuous training and improvement. Accenture [34] reviewed more than 300 US manufacturing companies between 2013 and 2014 and found that 80% of companies invest around \$ 1000 each year in training of each employee. Professional courses enhance technical and personal skills such as World Class Manufacturing or Six Sigma belt, which also enable certifications.
