What is Industry 4.0? (Smart Shop Floor Part 1)

Table of contents:

The First Industrial Revolution shifted manufacturing from skilled, manual cottage industries to centralized factories using steam and water power, leading to specialized production with harsh working conditions, particularly for women and children.
The Second Industrial Revolution, marked by the introduction of electrical power, telegraphs, and railroads, transformed manufacturing with assembly lines and mass production, leading to urbanization and the emergence of a middle class.
The Third Industrial Revolution, emerging with early computers in the 1970s and 1980s, revolutionized information management and manufacturing efficiency through automation, the internet, and various electronic devices.
The shift from the Third to Fourth Industrial Revolution features key advancements such as Big Data, IoT, AI, and advanced robotics. This era focuses on smart, interconnected technologies that enhance decision-making, efficiency, and sustainability in manufacturing.
A digital twin is a real-time digital counterpart of a physical object or system, used for data-driven decision-making.
PowerArena’s one-piece flow assembly line model captures the dynamic interplay between people, materials, and machinery.

The terms “Industry 4.0” and “Smart Manufacturing” (SM) are widely used to describe a major industrial transition underway. This transition is truly revolutionary in that it is now possible to create a digital twin of physical operations to improve operational efficiency, quality and safety. Let’s walk through the previous industrial revolutions and also talk about digital twin in the context of shop floor.


Before the Industrial Revolution manufacturing can best be described as a cottage industry. Picture the village black smith, butcher, and leather shop. All the work was manual and fairly skilled. Starting in the mid 1700’s, the First Industrial Revolution introduced machines using steam and waterpower. The village shops were replaced with centralized and larger factories. The high-skilled workers and craftsmen of collage industries were not essential in factories. Women and children were used as a cheap source of labor. The First Industrial Revolution began in the American colonies, England, and Europe. colonies. Iron and textiles industries were the first to adopt power. 

A summary of the changes from cottage industries to the industries of First Industrial Revolution: 

  • Water and steam and powered production in centralized factories replaced village shops.
  • Harsh and dangerous work environment that mainly used children and women. Possible because mechanical power replaced the need for most of the heavy labor performed by men.
  • Specialization and a division of labor in which machines and workers are organized in a manner to increase efficiency, with little regard for safety or worker wellbeing. 
Exhibit 3 is a painting of a textile mill powered with either steam or
water and a labor force primarily made of children and women. 


The Second Industrial Revolution began in England, the US and Europe when electrical power was transmitted over a grid, when real-time communication was achieved with the telegraph, and when freight and people were transported over railroads. The telegraph and railroad also greatly increased the mobility of people and the spread of new ideas. Telegraph communicated information at the speed of light while railroads made it possible to cross even large countries in a few days, versus the weeks of earlier times.  

With electric power, mass-production and assembly lines in factories became a reality. There followed a mass migration of people from farms to cities creating a major divide between the poorer rural world and more prosperous industrial world. The migration to cities and the rise of the middle class are the most obvious manifestations of the Second Industrial Revolution. In the mid 1800’s only 20% of Americans lived in cities and towns. This rose to over 50% after World War I, and to over 70% by 1970.[3]

This exhibit shows workers on an auto assembly line in the 1930s.

A summary of the changes from First Industrial Revolution to the Second Industrial Revolution: 

  • Assembly lines and electrically powered mass production
  • Telegraph and telephone provide communication in real-time 
  • The efficiency movement with time and motion studies are introduced by Fredrick Taylor, Frank and Lillian Gilbreth 
  • Henry Ford perfects the assembly line, converting molten steel into a car in 72 hours, making cars affordable to the average family. 


Electronic computers fostered the Third Industrial Revolution in the 1970s and 1980s. Primitive by today’s standards, early computers laid the foundation for a revolution in information management. Dramatic improvements in manufacturing efficiency were achieved with automated systems, software applications, the internet, and a wide range of electronic devices. The conversion to Smart machines began with programmable logic controllers (PLC). Barcode scanners replaced paper-based and error-prone processes.

A summary of the changes from the Second Industrial Revolution to the Third Industrial Revolution: 

  • Mainframe and personal computing, semiconductors are introduced in all sizes and types of operations. 
  • The Internet and World-Wide Web become widely available 
  • Manufacturing software such as manufacturing resource planning (MRP) and electronic procurement replace labor-intensive paper-based processes 
  • 3D Printing and Additive manufacturing become available.
  • Robots begin to replace people, especially for highly repetitive tasks.


The last 20 years has witnessed the introduction of Smart Manufacturing and Industry 4.0. It is based on these core principles: 

  • Information transparency offering  comprehensive information to facilitate decision making
  • Inter-connectivity allowing  operators to collect immense amounts of data and information from all points in the manufacturing process, identify key areas that can benefit from improvement to increase functionality
  • Decentralized decision making in which smart machines make their own decisions. Humans will only be needed when exceptions or conflicting goals arise[4]
  • Secure connectivity among devices, processes, people, and businesses
  • Flat and real time digitally integrated, monitored, and continuously evaluated 
  • Proactive and semi-autonomous processes that act on near real-time information
  • Open and interoperable ecosystem of devices, systems, people, & services 
  • Flexibility to quickly adapt to schedule and product changes 
  • Scalable across all functions, facilities, and value chains
  • Sustainable manufacturing: optimizing use of resources, minimizing waste[5]

A summary of the changes from Third Industrial Revolution to the Fourth Industrial Revolution: 

  • Big Data analytics and advanced processes
  • Multilevel customer interaction and customer profiling
  • Augmented reality wearables
  • On-demand availability of computer system resources, software as a service (SAAS) 
  • The Industrial Internet of Things (IIOT)
  • Smart sensors, AI and, computer vision to create digital twins
  • Affordable advanced robots and cobots (a robot that supports people)
  • Mainstream 3D printing also known as additive manufacturing 
  • Mobile and Edge computing
  • Location detection technologies (electronic identification)
  • Advanced human-machine Interfaces
  • Authentication and fraud detection


A digital twin is a digital representation of an object or system. It is updated in real-time and allows data driven decision making. Here is an example of the digital twin of an electricity grid network created by GE. It collects data from the physical grid and represents a holistic view of the grid system. It shows past and present performance of the grid, and the data collected can be used to predict future outcomes. Asset management has changed from reactive to predictive. Field workers can be deployed to the right location at the right time to fix problems. 


In the manufacturing shop floor, the digital twin is not restricted to equipment and includes people and how they interact with materials, vehicles, equipment, and vehicles, and materials. Only through capturing the interaction of people, materials and equipment is it possible to truly understand the detail of physical operations.     

Here is an example from PowerArena of a digital twin of a one piece flow assembly line. The bar represents the cycle time of each workstation on the line in real time.

In a one piece flow assembly line, a single unit of product is built step by step through the workstations. This means if one workstation is slow, it slows down the whole line. As you can see below, there is a particular workstation that takes a longer cycle time than it should, creating a bottleneck on the line.

By checking the video in real time, we see that there are people doing maintenance work on the bottom right of the screen and that affects the performance of the production. They should have done their work off hours. 

The digital twins of the production lines create data transparency and allow problems to surface and resolve quickly.

Read More
Time and Motion Study (Smart Shop Floor Part 2)
Supercharging Kaizen & Six Sigma With Computer Vision (Smart Shop Floor Part 3)
4M1E & Computer Vision-1 (Smart Shop Floor Part 4)
4M1E & Computer Vision-2 (Smart Shop Floor Part 4)

Anthony Tarantino, PhD
Six Sigma Master Black Belt, CPM (ISM), CPIM (APICS)
Adjunct Faculty Member, Santa Clara University
Author of Wiley’s Smart Manufacturing, The Lean Six Sigma Waywww.wiley.com (May 2022)
Senior Advisor to PowerArena


[1] Tarantino, A., Smart Manufacturing, The Lean Six Sigma Way, (New York, John Wiley and Sons, 2022), Smart Manufacturing, the Lean Six Sigma Way | Wiley, Ch. 2. 
[2] Hilbert, M., López, P. (April 2011). The world’s technological capacity to store, communicate, and compute information (PDF). Science. 332 (6025): 60–5. Bibcode:2011Sci…332…60H. https://science.sciencemag.org/content/332/6025/60 (accessed 11 June 2021).
[3] US Census Bureau, https://www.census.gov/prod/2002pubs/censr-4.pdf
[4]  Bonner, M. (March 2017) What is Industry 4.0 and What Does it Mean for My Manufacturing?  Saint Clair Systems Blog. https://blog.viscosity.com/blog/what-is-industry-4.0-and-what-does-it-mean-for-my-manufacturing (accessed 17 June 2021). 
[5]  CESMI – The Smart Manufacturing Institute.  https://www.cesmii.org  (accessed 14 June 2021).