Evolution of manufacturing enterprise and Industry 4.0 | HCLTech
Internet of Things

The evolution of manufacturing enterprises and Industry 4.0

Industry 4.0 (I4.0) emphasizes both technology and processes. It has a balanced approach and industries are adopting it step by step on a bigger scale.
5 minutes read
Arindam Sen


Arindam Sen
Senior Sales Director – Industry NeXT and IoT, HCLTech
5 minutes read
The evolution of manufacturing enterprises and Industry 4.0

In the initial days of the First Industrial Revolution, when organizations were just forming, there were no information systems to support their activities. Most of their decisions were impulsive, and there was a lack of teamwork. There were hardly any known means for information exchange. This can be classified as a multiple dysfunction enterprise. 

Over time, organizations matured. Though operations were primarily manual, people tried to improve certain KPIs by reducing inventory, reducing procurement cost,  training workers and creating job enrichment for higher efficiency. This was when enterprises were trying to be organized. We call that a semi-functional enterprise.

Gradually, ERP and other enterprise transaction IT systems were introduced. Organizations started to connect internally between different departments, and silos eventually started to fade away. Enterprises began focusing on processes across different departments. Operations in logistics and warehousing were enhanced due to new material handling equipment, storage solutions and use of IT systems. Organizations were using tools to forecast demand and getting closer to fulfilling client demands. We refer to this as the era of integrated enterprise.

Now, organizations are trying to integrate with the external enterprise. Organizations want to implement EDI and other business means for integrating data exchange from and to suppliers, clients and other stakeholders. Organizations are gradually evolving into a big extended supply chain, and most of the competition is shifting from individual organization effectiveness and efficiency to the entire supply chain. This is the era of extended enterprise.

Industry 4.0 (I4.0) framework is expected to take extended enterprise concepts further. It breaks the silos within the organization, and with the help of cyber-physical systems, it takes collaboration activity and visibility to a higher level, including OEM and its ecosystem of multilevel partners. I4.0 contains the following components — integrated planning and execution, logistics visibility and procurement 4.0 — sourcing on demand, smart warehousing, efficient spare parts management, autonomous and B2C logistics and prescriptive supply chain analytics. 

This ecosystem will be enabled by a wide range of digital levers (i.e., cloud, big data and analytics, IoT, 3D printing and augmented reality). With a combination of these digitalization levers, it allows a new business model of products and services. Digitization levers are integration factors for each link of an organization's value chain. 

While the and APQC process classification framework exclusively focus on processes at various levels, KPIs and best practices, these do not focus much attention on technology and its enablers. From that perspective, the I4.0 framework emphasizes both technology and processes. It has a balanced approach, and industries are adopting it step by step on a bigger scale. Manufacturing companies will exclusively center on the I4.0 framework in the future, but it will be partial adoption in the initial days that will lead to full adoption.

Share On