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Implementation Strategies for I4.0

Jhanvi Jigneshkumar Patel, Hani Gaurang Desai, Bhavini Rajendrakumar Bhatt, Vivek Chetanbhai Joshi

Department of Computer Science & Engineering, R. N. G. Patel Institute of Technology, GTU, India

In today's age of Internet, the fourth revolution of industry I4.0 is challenging the industrial companies in different sectors i.e. manufacturing, logistics, business and many more. Therefore, there is need for a strategic approach to implement it. This paper gives a detail implementation strategies of I4.0 with respect to the different business models and the aspects.

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The physical and virtual worlds are increasingly merging together. The physical objects having the sensors are being connected through the development of Internet of Things. And the availability of information and data collected in real time through networking leads to the best possible value stream from it and triggering the next stage of industrial revolution known as Industry 4.0.

This will have revolutionary effects on the existing business processes enabling the new business models and will influence the evolution of technologies. The expression Industry 4.0(I4.0) emerged out of working group of the research alliance for the development of vision for a future industrial landscape influenced by the internet [2].

The term I4.0 has spread rapidly and established itself in science and practice as a buzz-word that challenges. Therefore, the focus is on optimizing the core industrial processes of development, production, logistics and services.

The Industrial Internet Consortium (IIC) is the world's leading organization that serves to transform business and society by accelerating the adoption of IIOT [1]. The I4.0 is based on the concepts of IOT i.e. Internet of Things, CPS i.e. Cyber-physical system: physical entities, which are equipped with technologies such as RFIDs, sensors, microprocessors, etc., Artificial Intelligence i.e. providing intelligence to machines, Robotics, Big Data Analysis, etc. I4.0 can be adopted in industries like- healthcare, transportation, energy, public domain information as well as manufacturing.

The availability of a new technology alone does not mean that its use can be commercially justified, i.e. that industrial companies benefit from it. One of the author had described a model which shows significant productive process types of an industrial company and the effects of I4.0 on them [2]. The model is as shown in fig.1

Graphic symbols in the Y-Model shows functions and the bar contains the operational driving forces from I4.0. Significant technologies associated with I4.0 are shown outside these. The upper section of the model shows planning activities and the lower section shows short term control and realisation layer.

Business administrative driver, individualisation, decentralization, self-control, open innovation, service oriented are the factors which will change companies. New business model are being created. One business model describes principles upon which company achieves the profits and turnover. This model includes revenue model.

Fig. 1. | Industry 4.0: The big change

Different implementation strategies are there for I4.0 which is based on this business models. They are Blue ocean strategy, step by step and smart services which are explained in detail in next section.


This section describes the implementation approaches being conducted practically. In Fig.2, x-axis shows the order of investment necessary and y -axis shows the extent to which aim complete fulfillment of I4.0 vision has been reached [2].

Fig. 2. | Implementation Strategy

The strategies are as follows:

A. Blue Ocean Strategy

Strategy 1: With a Blue Ocean Strategy (in Fig. 2) disruptive innovation through I4.0 is strived for (cp Kim/Mauborgne, 2005) [4] [2]. This means that a break with the existing is made and by virtually following a green-field strategy, a new company with new business model is created. An example of this is Google car.

A car spends 95% of its time stationary and is driven for only 5% of time. Google car aims to reverse this: the car should be 95% of time driven and remain 5% of time stationary. This leads to the requirement of a car sharing concept, a car can be delivered to its next user. Google propagates 10x quite emphatically: this means that innovation does not aim to provide improvement rather it should 10x better than existing concept. The Tesla car with its uncompromising approach is example of Blue Ocean Strategy.

The characteristics of this strategy are not that an existing business model is further optimized; it is rather that it is broken with as many principles as possible. The mobility of UBER-POP also breaks with the principles of commercial taxi service and follows the principles of service without marginal cost.

In Germany, the Blue Ocean Strategy for I4.0 is hardly visible. This may lie in the fact that German industry continues to be very successful with its traditional business model. A tendency in Germany exists that I4.0 projects are more likely to be realized by hidden champions in mid-sized industrial companies than by "lighthouse" projects backed by large marketing budgets.

In Fig. 2 the disruptive strategy 1 is distinguished though a high degree of realization for the vision of I4.0.

B. Step by Step concepts

In many cases, companies approaches vision of I4.0 step by step.

Strategy 2: Solving conventional problems with new technologies

As yet complex or unsatisfactory individual solutions to problem can be re-visited with I4.0 techniques. For Eg.: Through the mobile querying of material stocks at production or assembly station by switching from fixed transport run plans to runs controlled by need, a machine manufacturer can reduce internal material transport runs.

A car parts manufacturer improves its goods- in process through the use of RFID technology to automate counting controls and warehousing. In Fig. 2 these approaches are characterized by comparatively modest capital requirement that due to their specialist nature, nevertheless yield only limited potential for the I4.0 vision.

Strategy 3: Factory Islands

Using the I4.0 principles, a car parts manufacturer installs a new production line. All workstations are connected to the internet and fulfill CPS criteria. Using RFID techniques, mostly the material flows are controlled by themselves. Materials and equipment are monitored in real time by sensors and maintained predictively [5]. To build a data filter to planning system lying above it, a mid-sized foundry business implements a Manufacturing Execution System (MES) in order to connect data capture system to control layer.

This example shows an approach valid for the entire manufacturing process moving in the direction of real time manufacturing, but it is missing the use of CPS. The approach of MES in fact contradict the principle of self control.

Although only minor aspects of I4.0 have been tracked examples require high capital input and can be seen as starting points for further steps.

Strategy 4: PLM and open innovation Islands

A manufacturer of motors sets up a product memory database in line with PLM. At same time, it reorganizes its development department. From ERP system, along with the construction data, the manufacturing parts lists and the work flow plans were removed and included in new product database. These measures indicate a new information system architecture for company. Accommodate the trend towards greater product variation and product individuality by focusing on creation and administration of product data.

The logistics functions in sales and procurement, as well as in production planning become applications accessing a product database and no longer require the administration necessary with current ERP systems. In Fig. 2 the example is used as benchmark. It leads to end-to-end flexibility in product design and opens the way to new business models.

Strategy 5: Logistic Islands

The end-to-end reorganization of supply chain management requires the involvement of customers and suppliers as well, possibly over multiple stages. From the viewpoint of an individual company, through the integration of direct supplier and customers as well as transport systems, improved flexibility and cost savings can be achieved. Use of RFID technologies as well as real time monitoring of transport statics gives early indications of expected arrival times as well as contents based on type, measurement and quality.

Using sensors, specific incidents such as unusual temperatures or vibrations is captured. RFID controlled goods yard management regulates the transport from the entry gate to arrival in the warehouse. Notification of means of transport and the allocation of warehouse space belong to this system as well.

This example serves more the improvement of internal logistics processes. Due to its selective approach, the investment required is mid-level and the strategy opens up moderate development perspective.

C. Smart Services

I4.0 opens industrial companies to far reaching strategic potential through new types of services. Ownership of products and resources is no longer in the forefront of client demands, it is rather now access to services associated with them [2]. This means that companies are taking character of service providers for the functions associated with their products.

Strategy 6:I4.0-Consulting

As pioneers for I4.0, the industrial companies that have gathered experience with the new technologies and forms of organization can pass this on to other companies. They can set up their own consulting company. This can be happen by hiving off the IT department which can now offer its services to the market. A benefit exists is that the company can now address new customer needs thus increasing its rate of innovation, benefiting its parent company.

If industrial world-wide market leaders include their hundreds or possibly thousands of IT and manufacturing specialists then major service providers for the design of comprehensive I4.0 solutions can be created at a large scale. In Fig. 2. However, the high potential of reaching comprehensive I4.0 concepts has been allocated to the strategy of limited investment costs.

Strategy 7: Product related services

The connection to the internet of complex products such as printing machine leads to a significant gains in information about the worldwide performance of these products under diverse operating conditions. This knowledge can be used by companies to offer their customers maintenance contracts at especially competitive rates.

Still some problems are there to overcome. For eg. An industrial company that receives data from a supplier for its own manufacturing processes must reformat it in its own data organization or vice versa. With multiple type of data and differing customers, a set of data standards are essential. Problems of data security are also solvable.

A complex world wide infrastructure consisting of one's own and customer organizations as well as the corresponding IT, must be built up, for the data administration concept and the services. Fig. 2. A mid-level investment requirement has therefore been estimated.


I4.0 will be making great demands on the further development of IT systems. A particular requirement is a new software architecture. From a user point of view, it has already been noted that future software architecture for industrial companies should be more product centered. This means that the product definition take center stage and logistical functions access product database. Balance between technical and business administrative function and fundamental changes would be trigger in a product orient architecture, Software architecture will also changes. This paper describes different implementation strategies of I4.0 and concludes that different strategies have different concept and works in different sectors.


  1. Shi-Wan Lin , Brett Murphy, Arhitecture Aligment and Interoperability- An Industrial Internet Consortium and Plattform Industriee 4.0 Joint Whitepaper. LINK
  2. Industry 4.0 : From vision to implementation , August-Wilheim Scheer. LINK
  3. Ernst Pessl, Sabrina Romina Sorko, Barbara Mayer, Roadmap Industry 4.0- implementation guidline for Enterprieses. International Journal of Science, Technology and Society. LINK
  4. Kim, W. , Mauborgne, R., Blue-Ocean-Strategy, Boston 2005
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  6. Scheer, A.-W.,CIM -The computer controlled industrial company, 4th edition, Berlin u.a.1990