Industry 4.0 and the digitalization of companies

Industry 4.0 and the digitalization of companies

July 27, 2023

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In recent years we have witnessed the digital transformation of companies, both public and private. The industry sector, in particular, has increasingly adopted technological solutions to optimize production. This development is called the Fourth Industrial Revolution or, more commonly, Industry 4.0.

Under the umbrella of the Recovery and Resilience Program, many entities have received investments from the Portuguese government to modernize their operations. Both the modernization of the public sector and the digital transformation of Small and Medium Enterprises (SMEs) are ongoing and have already shown positive results.

By implementing these types of solutions, production can be done more quickly, with fewer errors and budgets can be applied more accurately and securely. The modernization of the enterprises and the implementation of emerging technologies is, therefore, a logical step for companies to remain competitive.

In this article we will review what Industry 4.0 is, what are its greatest benefits, and the challenges companies face when implementing tech solutions.


Table of Contents

What is Industry 4.0?


Technological contributions and challenges that companies face


What is Industry 4.0?

Also called the Fourth Industrial Revolution, Industry 4.0 is the turning point for the digital transformation of the industrial sector.

Companies are making greater use of emerging technologies to modernize and digitalize this sector. By implementing state-of-the-art tech solutions and taking advantage of existing ones, production is optimized, it progresses faster and without errors, ending with a product with added value.

If, just a few years ago, we were still moving towards the Fourth Industrial Revolution, today we are already experiencing it.


Examples of technology used in Industry 4.0

In an Industry 4.0 scenario, companies have to keep up to date and invest in various types of emerging technologies. Thus, companies are implementing and making use of various technological solutions, such as:

  • Big Data – The emerging technology that makes all others possible. With big data it is possible to gather data so that it is later used by artificial intelligence and advanced analytics and stored in a Cloud Computing system.
  • Artificial Intelligence (AI) – AI has revolutionized the way data is intersected and treated. When applied to production processes, it can predict future events and help in decision making. To this end, tools such as Digital Twin, collaborative and cognitive robotics, among others, may be used.
  • Advanced Analytics – These data analysis, simulation and predicting techniques are used to anticipate behavior and provide more information when making a decision.
  • Cloud Computing – By using this data storage system, access to information is more democratic, faster and allows for greater collaboration between workers and departments.
  • Internet of Things (IoT) – The sharing of information with hardware in order to collect or provide data in real time is called IoT. This technology materializes in sensors and production devices that operate intelligently.
  • Virtual and/or Augmented Reality – This emerging technology helps to design and build 3D prototypes that only exist in digital, for example. Thus, it is possible not to spend so many resources on physical prototypes or on small adjustments to them.
  • 5G – In order for all these technological solutions to work without interruptions, companies must be connected to a fast and efficient network infrastructure. This is where 5G has contributed to the modernization of more companies and being included in Industry 4.0.


Technological contributions and challenges that companies face

Contributions to the digitalization of companies

The digital transition process is inseparable from the sustainable growth and competitiveness of companies.

With technological advances being part of the lives of citizens and entities, it would be unthinkable not to appropriate technology for the business world. All over the planet, we are seeing technological solutions being applied in the most diverse areas, with industry being one of those that has already benefited the most from the digitalization of companies.

Thus, the Fourth Industrial Revolution brought to companies in the industrial sector:

  • Optimization of management, production, and logistics processes.
  • The possibility of storing more data, for resource management and monitoring, for quick error correction and for better decision-making.
  • The automation of bureaucratic or operational processes, in order to free workers from repetitive and time-consuming tasks.
  • Better time management through systems integration, allowing for greater collaboration between teams.
  • More opportunities for innovation within the area in which a company operates, as workers are freed from bureaucratic and more time-consuming tasks.
  • Higher remuneration for workers, given that they must be more qualified to operate technological solutions.
  • Better budget management by analyzing data within a predictive model.


Industry 4.0 challenges in companies

Changing the operating processes of a company in the industrial sector entails challenges. Because digital transformation in companies does not only happen at certain stages of the supply chain, implementing emerging tech solutions may be more costly than one might think.

Industry 4.0 brings with it numerous benefits for companies, but digital transformation is always associated with challenges that these entities will have to face:

  • High initial investment. Many of these technological solutions can be expensive, and for them to work, migration has to be done across the company and across the entire production chain.
  • Interoperability of emerging technologies. That is, to ensure that the solutions used are integrated. This ensures the flow of data between all of them and, consequently, collaboration between teams.
  • Constant updating of technological solutions. The digital transformation is not static and new tools appear regularly. Furthermore, existing solutions are frequently updated and may come under different regulations.
  • Maintain compliance with legal frameworks. Many of these emerging technologies have specific legal frameworks, mainly regarding data protection. Companies must operate them in compliance with the law to avoid problems in the future.
  • Cybersecurity. With greater use of digital tools, there is also a greater likelihood of cyberattacks. Companies must put cybersecurity first and implement strategies from day one.
  • Qualification of employees. For these digital tools to play their role, it is necessary to have employees who know how to operate them in order to take full advantage of these solutions.