IIoT And Industry 4.0: The Basics You Need to Know

IIoT And Industry 4.0: The Basics You Need to Know

Sensors Insights by Simon Weallans

IoT, IIoT, and Industry 4.0, chances are you’ve heard these terms tossed around at some point, but still can’t quite put a finger on what they mean. This article aims to solve the confusion surrounding each of these, along with outlining the benefits to businesses that choose to embrace them. To accomplish this, we will cover the basics of connected devices and how they can change our world. We will focus on industrial products and applications rather than trending IoT sensations (like Pokemon Go), so that organizations can better understand their everyday practicality and uses.

Before we dive in, it should be noted that just 10% percent of small-to- medium-sized, Michigan-based businesses currently have an Industry 4.0 strategy in place. This low number is not only shocking—, it’s bad for business. Industry 4.0 is not just another buzz term; it provides significant improvements in productivity, quality, product purchasing costs, and manufacturing costs. To put it simply, companies cannot afford to ignore it.




IoT is short for Internet of Things. The Internet of Things refers to the ever-growing network of physical objects that feature an IP address for internet connectivity, and the communication that occurs between these objects and other internet-enabled devices and systems. Your Wi-fi doorbell, or smart refrigerator are everyday examples of IoT devices.



Industrial Internet of Things (IIoT) is a subset of IoT, aimed specifically at industrial applications. IIoT is about connecting machines to other machines/data management and the optimization and productivity that is possible to make “smart factories.”


Industry 4.0

This is a phrase coined in Europe. It means the same as IIoT and refers to the fourth industrial revolution, as depicted in the title image. The term is interchangeable with IIoT and is now recognized globally.


Industry 4.0: Sub Components

To take full advantage of IoT, IIoT, and Industry 4.0 benefits, there are several components that must first be understood. Let’s look at each of these in more detail.


1. The Cloud

Utilizing the intranet to access data at any location where internet connectivity is possible, the cloud is an IT paradigm. Moving from conventional servers to the cloud empowers the availability of data wherever and whenever needed. Furthermore, the cloud enables companies to focus on their core expertise rather than investing large sums of money on computer infrastructure and maintenance. Cloud computing relies on the sharing of resources to achieve economies of scale, like a public utility.


2. Sensors And Connected Devices

Just about every product bought today is equipped with an IP address. Those who use Nest at home, view home cameras from a mobile phone, or start a car from an app are all using IOT. IIOT provides the same capabilities, but for larger pieces of equipment. This typically requires integration into corporate software like Manufacturing Resource Planning (MRP), Product Lifecycle Management (PLM), or asset management software. In some cases the equipment is older and might not have internet connectivity; thankfully, there are numerous sensors available on the market for making old equipment compatible.


3. Augmented Reality

Data is available almost everywhere, which also increases our urge to be able to view it almost anywhere. Providing data with context almost immediately makes it more meaningful. This is where augmented reality (AR) comes in, and it can be implemented in many variants:

  • Phone/Tablet: When you hold up your device to view a piece of equipment, a digital overlay can provide additional data regarding that equipment, KPI’s, Graphical Data, Schematics, Graphical Data, and Digital twin data, among others.
  • Assisted Reality Wearable: Like Google Glass, this displays an image of computer screen typically to one eye, providing on-the-spot data.
  • Immersive Augmented Reality Wearable: Typically, this involves glasses that attempt to cover your most of your viewing field, with the potential to show KPI’s, graphical data, schematics, and digital twin data, among other functionality.

It doesn’t take much to notice that phone, tablet, and immersive AR wearables share many of the same display opportunities. Phones and tablets are excellent in many use cases, but the distinguishing factor comes in when you need to perform work at the point-of-use. In these cases, wearable devices are easier to utilize.


4. Artificial Intelligence

Artificial Intelligence (AI) is the phenomenon of computer and machine learning. Devices are now available that recognize their environment and begin to take actions based on that environment to maximize achieving a goal or a result.  AI is also now being used to recognize and separate parts (sorting good from bad parts). We have seen it in the food industry for years, but it is now capable of sorting parts by size or in so cases a good part vs a bad part.


5. Big Data

 Big data refers to data sets that are so big and complex even traditional data-processing application software are inadequate to deal with them. Big data challenges include capturing data, data storage, data analysis, search, sharing, transfer, visualization, querying, updating, information privacy, and data source.


6. Digital Twin

Digital twin is a digital representation of a physical asset. Digital twins can be used to show how an item is serviced. This can also be used in combination with AI tool sets, software analytics, and real-world data to create living digital simulation models that update and change along with their physical counterparts.


7. Cybersecurity

The increased demand for cloud and internet-based services increases the need for protection of computer systems from theft of or damage to their hardware, software or electronic data, as well as from disruption or misdirection of the services they provide. Cyber security includes controlling physical access to system hardware, as well as protecting against harm that may be done via network access, malicious data and code injection.


8. Additive Manufacturing and Digital Scanning

The significant price reduction of digital scanners and 3D printers enables much faster prototyping of products/product development. A few large companies are now looking to use 3D printing in production, allowing more complex parts to be made in significantly less time.


Immediate Benefits Of Industry 4.0 

With a basic understanding of the technologies that combine to create Industry 4.0, let’s look at some examples of how it can help the manufacturing environment.


Predictive Maintenance

Years of machine data analysis reveal events that have triggered failures in equipment, coupled with real-time monitoring, can warn of performance trends. This can provide advanced warnings when pieces of equipment are about to fail. In turn, workers can schedule equipment maintenance at a convenient time rather than reactive maintenance when the machine crashes and the assembly line comes to a stop.


Demand Prediction

Big data analysis can review market trends associated with your commodity, AI can then assist with inventory review and tracking market pricing. The result is having more accurate demand prediction, along with the ability to buy at market lows. This ultimately results in improved margins.


Inventory Optimization

Real-time inventory management is available with scanners connected to inventory management systems. AR devices can assist with picking/kitting instructions, with potential productivity improvements up to 40 percent.



Many companies utilizing AR work instructions have reported 30+ percent productivity on certain operations. Companies using this technology have also realized improved quality over paper instructions for complex tasks.


Expedited And Improved Training

The utilization of VR and AR in training scenarios means that someone wishing to learn a new operation can simply put on a set of glasses and instantly get guidance. Since this is an experiential activity versus reading a manual or sitting in a class, retention is improved and training time is significantly reduced. Once the training application is completed the trainer also does not have to spend all that time teaching the same class over and over.


Improved Robotics

Once upon a time, robots were all caged, preventing them from contacting a shop floor worker. With the advancement in sensor technology, robotics can be used in an open environment, the combination of AI and smart robots results in robots that can adapt to challenges in their environment and make the best possible choice to accomplish a task.



Given how great this all sounds, you may be starting to think about the associated costs. Many people get to this point and assume the cost is prohibitive. But the fact is that some of your new machines may already be compatible. Cost is entirely dependent on each situation and facility, but talk to an Industry 4.0 specialist, and you may be surprised to find you can get started for as little as $20,000.  This allows businesses both big and small to get up and running while still being mindful of their bottom line.



As America pushes to remain competitive with manufacturing throughout the rest of the world, it is imperative that all companies—large and small—investigate and embrace Industry 4.0. In most cases, the technology will provide such enhancements to the bottom line that the investment will pay for itself within just a year or two. Yes, you can hold out and wait for the technology prices to drop, but competitors might not share that mentality. The bottom line is this: You really cannot afford to wait.


About the author

Simon Weallans is the Vice President of Sales & Marketing at Team Brightly. He has spent most of his career in the automotive industry and has spent the past few years managing sales of IIoT products and services. This blend in knowledge of manufacturing and Industry 4.0 Technology allows Simon to quickly understand how the latest technologies can be applied with existing systems to assist customers to improve their productivity and quality. [email protected]