Enter Industry 4.0. More than just the next step in the march of automation, Industry 4.0 is a fundamental shift in manufacturing businesses' operations. It’s about connected intelligence, where machines, data, the Internet of Things (IoT) and AI-driven insights come together to make operations faster, smarter, and more responsive. That’s before we even talk about the rise of autonomous AI agents. 

Deloitte and MAPI’s Industry 4.0 survey revealed that 86% of manufacturers believe smart factories will be the primary driver of competitiveness by 2025. For manufacturing leaders, the question is not whether Industry 4.0 is necessary but how quickly they can implement it. 

This is easier said than done. McKinsey and others have consistently found that around 70% of all digital transformations fail. 

This article explores four reasons why embracing Industry 4.0 at pace and scale is imperative. We conclude with three simple, actionable recommendations. 

1. The case for Industry 4.0 and cost control 

Before we even begin, let’s address the elephant in the room: cost. Many manufacturers see Industry 4.0 as a high-stakes investment with an uncertain return. But in reality, the ROI is clear. According to McKinsey, manufacturers leveraging Industry 4.0 experience:  

• 30% lower maintenance costs  

• 50% reduction in machine downtime  

• Up to 25% improvement in productivity  

The real risk isn’t investing too soon; it’s waiting too long.  

2. Industry 4.0: beyond efficiency, towards intelligence

A traditional view of automation is a simple equation: replace manual processes with machines, and productivity increases. Industry 4.0 operates on an entirely different level. Instead of just executing tasks, connected systems can learn, predict, and adapt alongside their human teammates. 

Manufacturing market leaders have production facilities where every machine, sensor, and process is linked to a real-time digital ecosystem. Instead of reacting to issues after they occur, problems are detected before they escalate. Supply chains flex automatically based on global disruptions, and production schedules adjust dynamically to match demand.  

Bosch’s predictive maintenance 

This isn’t just theoretical. Bosch has been leading the charge with IoT-powered predictive maintenance. In their factories, machines continuously monitor their own performance, identifying early warning signs of mechanical failure. Instead of waiting for breakdowns, maintenance is triggered before failures occur, reducing downtime and slashing maintenance costs. This is the difference between automation and intelligence: a shift from reactive firefighting to proactive decision-making.  

The key technologies making this possible include AI, IoT, big data, and cloud computing. These technologies aren’t just about optimising existing processes; they fundamentally reshape how manufacturing businesses think, plan, and operate.  

3. From efficiency to competitive advantage

Manufacturers that embrace Industry 4.0 don’t just see increased operational efficiency. Done well, Industry 4.0 can lead to a competitive advantage. 

Siemens takes the lead 

Siemens developed a fully digitalised factory model to meet the increasing demand for customisation. Their production lines can now self-optimise based on demand fluctuations, allowing Siemens to deliver highly tailored products with shorter lead times. While competitors struggle with inflexible production models, Siemens has unlocked a new level of agility, positioning itself as a leader in customer-centric manufacturing.  

This is what sets Industry 4.0 apart. It's about strategic differentiation rather than just reducing costs and increasing efficiency.

4. Overcoming the most significant barriers to adoption  

Despite its clear advantages, Industry 4.0 adoption remains stubbornly slow in many organisations. The biggest obstacles are legacy infrastructure, workforce skills gaps, and cost concerns (we addressed cost concerns at the top of this article).  

Legacy infrastructure 

Manufacturing is an industry built on stability. Many businesses still rely on machinery and systems that predate the Internet, making integrating modern digital technologies seem daunting. But the most successful adopters don’t rip and replace their entire operations overnight. Instead, they start small, targeting high-impact areas where Industry 4.0 can deliver quick wins.  

Mitsubishi implemented digital twin technology to simulate and optimise production processes without disrupting existing operations. This provided quick wins such as increased productivity, reduced costs, and more agile manufacturing processes, all while maintaining legacy infrastructure. 

The key is to view Industry 4.0 as an enhancement layer rather than a replacement. Through middleware solutions, Modern IoT sensors and data analytics platforms can work alongside existing Manufacturing Execution Systems (MES) and Enterprise Resource Planning (ERP) systems. This means manufacturers can preserve their core operational infrastructure while gradually adding smart capabilities where they matter most.

Workforce transformation 

The second big challenge is workforce transformation. Advanced digital tools are only as effective as the people using them. Companies serious about Industry 4.0 invest in technology and upskilling their teams.  

General Electric (GE) tackled this head-on by implementing an AI-driven training system that guides employees through digital interfaces. Instead of relying on slow, traditional training methods, GE’s AI tools offer real-time coaching, helping workers build digital confidence on the job. 

More recently, in 2024, GE Aerospace introduced "AI Wingmate," a generative AI platform developed in collaboration with Microsoft. This platform offers GE's 52,000 employees instant access to information, faster learning and discovery, and advanced support tools. Employees can quickly obtain relevant information, perform advanced searches, and draft tailored communications by engaging in human-like conversations, enhancing productivity and facilitating real-time learning.

The future of manufacturing is already here.  

Industry 4.0 isn’t some distant vision of the future. The leading manufacturers have already shifted, and the competitive gap between early adopters and laggards is widening fast.  

The manufacturers that embrace connected intelligence will define the industry in the next decade. The ones that hesitate? They risk playing catch-up in a world where catching up is no longer possible.  

For manufacturing leaders, the time to act is now.  

Into action

Some key recommendations on how to embrace Industry 4.0 and get ahead:

1. Identify key areas for immediate transformation – Start with small, high-impact use cases rather than aiming for a complete overhaul.  

2. Invest in workforce development – A digital transformation strategy is only as strong as those implementing it.  

3. Build strategic partnerships – Collaborating with experienced technology partners can fast-track implementation and reduce risk.  

At JOURNEY, we help manufacturers Solve & Evolve™ through digital transformation. Want to explore your Industry 4.0 strategy? Let’s talk.