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Industry 4.0

Impact on Manufacturing Strategies and Performance

Written by A. Pehrsson

Paper category

Master Thesis


Business Administration>Supply Chain & Logistics




Master Thesis: Industry 4.0 involves different technologies, different functions and ways of use. ManufacturingStrategies involves operational planning and management for specific goals, as well as concepts related to manufacturing practices, such as lean production and operational strategies. Operational performance considers internal performance related to operational measurement. These three components will be explained in the following chapters. 2.1 Industry 4.0 There is clear evidence that it is currently undergoing a smooth transition to the fourth industrial revolution. Bartodziej (2017) defines the fourth industrial revolution as a digital revolution or evolution. In order to obtain strong competitiveness through technological innovation, the German government has been pursuing a high-tech strategy to coordinate research and innovation initiatives. Industry 4.0 was proposed by the German government as a strategic initiative in 2011. One definition of Industry 4.0 is that FU described Industry 4.0 in 2011 as the fourth industrial revolution and a new level of organization and control over the entire value chain. The product life cycle includes meeting customized customer needs from ideas, orders, development, manufacturing, and delivery. Development is based on the availability of real-time information and connects all functions involved in value creation (Bartodziej 2017). The transformation of technological progress includes sensors, machines, workpieces, and IT systems, which are connected through value chains (Rüßmann et al., 2015). The connected systems are also called CPS (Cyber ​​Physical System), and they interact with each other using Internet-based protocols. Bartodziej (2017) described another definition of Industry 4.0, which was synthesized by Acatech in 2013 as a CPS technology to manufacturing and logistics, as well as the use of IoT and services in industrial processes. This is of great significance for value creation, business models and downstream services. Industry 4.0 is based on nine pillars of technological progress, five of which are used in this research. The researched technology is illustrated in Figure 2.2 below, and is introduced and described in the subsequent sections. The diagram shows the five technologies considered as the backbone of Industry 4.0. They are autonomous robotics, big data and analytics, simulation, Internet of Things (IOT), and the cloud. Big data and analysis-In the context of Industry 4.0, big data and analysis are used to collect and extensively evaluate data from different sources (Rüßmann et al., 2015). Sources include production equipment and enterprise and customer systems. Industrial Internet of Things-Rüßmann et al. (2015) described the Industrial Internet of Things in Industry 4.0 as devices, sometimes including unfinished products, enhanced by embedded computing and connected using standard technologies. In the current manufacturing industry, sensors and machines are connected through a network, and sensors and field devices with limited intelligence and automation controllers provide information for the control system in the manufacturing process. The Internet of Things is based on three distinctive features: context, ubiquity, and optimization (Witkowski, 2017). Context refers to objects that can interact with its environment. Context includes information such as location, physical conditions, or atmospheric conditions. Ubiquitous means the ability of objects to communicate with each other, not just connect to the network. Optimization means the function of the object. Cloud-Within Industry 4.0, a cloud-based software service for analysis applications, increases data sharing across company boundaries (Rüßmann et al., 2015). The performance of cloud technology will improve with the development of Industry 4.0, thereby shortening the response time, and the data from the deployment of machines and functions to the cloud will increase, thereby improving the data-driven services of the production system. Cloud-based manufacturing is a technology that can provide substantial support for the realization of Industry 4.0 (Xu et al., 2018). Cloud manufacturing is similar to cloud computing and uses resource networks in an extremely decentralized manner. 2.2 Manufacturing strategy Manufacturing strategy is described by Corrêa (2001) as a framework. The goal is to improve the competitiveness of the organization. This goal can be achieved by designing, organizing, managing and developing resource manufacturing. Manufacturing decisions directly affect how companies compete in their markets, but there is no such thing as the "best way" to manage manufacturing resources. Different manufacturing resource structures lead to different manufacturing performance levels. Gain greater potential through the development of manufacturing technology. According to Stonebraker and Leong (1994), technology can include tools, equipment, materials, and information to expand the physical and mental scope of labor. Research and development efforts are aimed at introducing and applying new knowledge, products or services or process technologies. Changes in processes, materials, products or services, information systems or management techniques in operations have a significant impact on policies and procedures for guiding the work and labor skills required for operations. According to Bates et al. (1995) and Pretorius and Wet (2000) Read Less