The technological advances of the 21st century exert a profound influence over virtually all sectors of the economy and, in particular, revolutionize the way in which production operates. Many scholars agree that the technological developments of today constitute the Fourth Industrial Revolution, also referred to shortly as Industry 4.0. These advances revolutionize industrial production and offer considerable advantages to those embracing them but also require management to adapt to new challenges to reap the benefits of Industry 4.0. Technologies like the internet of things, cloud computing, big data, robotics, and additive manufacturing tune production toward unprecedented efficiency but require managers to adapt quickly and increase the importance of correct data interpretation.
Generally speaking, the changes in Industry 4.0 management have become a necessity because of the main technological drivers of industrial progress. One crucial technology that is at the helm of this process is the internet of things (IoT), which links physical objects through digital connections. From a management standpoint, it means that once operational, the production line may be easier to operate, but setting it up requires additional effort. Cloud computing is important for rapid data exchange within and between IoT frameworks. It effectively means outsourcing data storage for greater efficiency and requires the management to find an option that allows optimizing data use without compromising digital security. Big data is crucial in analyzing the rapidly growing amounts of information generated in digitalized industrial production, but it is the management’s job to decide what to focus on in these data massifs. Robotics offers increased precision and better workplace security, but incorporating robots to operate instead of or together with human employees is an organizational challenge in itself. Finally, additive manufacturing allows production lines to adapt quickly to changing conditions but comes with considerable logistical and maintenance challenges.
General Electrics may serve as an example of a company that is able to embrace Industry 4.0 and address some, if not necessarily all, management challenges coming with it. On its production lines, the company uses the platform Predix – an IoT-based platform that relies on cloud computing and serves to continuously optimize the manufacturing process. Another example of the IoT, as used by General Electrics, is the Digital Windfarm technology that uses the networks of digitally connected sensors to maximize the sustainable energy output for turbines. The efficiency of Predix and Digital Windfarm illustrates the positive trade-off between the managerial effort required to set up complex IoT networks and the decrease in day-to-day optimization and regulation. Naturally, the amounts of data produced by any IoT network complex enough to manage a production line would be too vast to analyze manually with a speed sufficient to aid the decision-making progress. Consequently, General Electric management also has to make use of big data to make sense of the increasing amounts of information produced due to the adoption of Industry 4.0.
As one can see, the Fourth Industrial Revolution utilized technologies that changed manufacturing in profound ways and removed some aspects of management to put an additional emphasis on the others. The combination of the internet of things, cloud computing, big data, robotics, and additive manufacturing allows creating the creation of highly adaptive automated production lines that require less human effort in day-to-day operation and maintenance. However, they also vastly increase the organizational effort necessary to set up these networks and require the management to operate large massifs of information, which may be challenging even with the help of big data. Ultimately, production management in Industry 4.0 is information management to a greater degree than ever before.