Industry 4.0 : How to Navigate Digitization of the Manufacturing Sector

McKinsey Digital (2015)

Industry 4.0 CoverRaising the topic of a fourth industrial revolution immediately prompts many questions: What does Industry 4.0 really mean? What does digitization entail for manufacturing? How  profound will its impact be on our value pools? What are the near-term business opportunities for my company? Some clients also ask whether the term is simply hype. This myriad of mixed reactions reveals the intense uncertainty associated both with what Industry 4.0 actually is and how companies should respond to the changing industrial environment.

To clarify terms at the outset, McKinsey defines Industry 4.0 as digitization of the manufacturing sector, with embedded sensors in virtually all product components and manufacturing equipment, ubiquitous cyberphysical systems, and analysis of all relevant data. It is driven by four clusters of disruptive technologies. The first consists of data, computational power, and connectivity – low-power, wide-area networks are one example. Analytics and intelligence form the second, while human-machine interaction is the third, comprising, for instance, touch interfaces and augmented reality. Digital-to-physical conversion is the fourth: advanced robotics and 3D printing are two examples. All of these enablers are at a tipping point today – now is the time for manufacturing companies to decide how to respond to them.

Download Full Report