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Industry 4.0: the terms you need to know

10 minutes | 29 Aug 2018

Lady with VR headset in factory

What is Industry 4.0?

To benefit from the advantages that Industry 4.0 can bring, it’s important to understand its terminology. The next stage in the evolution of industry, like the previous three, the fourth revolution is a response to the rise of new technologies.

As the rise of the smart factory is set to transform manufacturing, some businesses are already taking the lead in:

developing their Industry 4.0 strategies

• making targeted investments

adopting the right technologies

making the necessary changes to their business and operating models

A coherent Industry 4.0 strategy has the potential to create new ways of collaborating, boost the speed and efficiency of performance levels, enhance the customer experience and, ultimately, develop a complete end-to-end supply chain.

Success, however, lies in having a thorough understanding of manufacturing’s new landscape. If you want to know your big data from your cloud robotics, take a look at our handy glossary of key terms.

Additive manufacturing

The process of joining materials to make objects from 3D model data, generally layer upon layer, as opposed to via subtractive manufacturing methods. Although commonly also referred to as 3D printing, increasingly manufacturers are differentiating the two. Additive manufacturing now refers to the production of more complex products for a designated end use whereas 3D printing is primarily used to create prototypes.

Example of additive manufacturing – 3D printing

Artificial Intelligence (AI)

The capability of a machine to perceive its environment and make rational decisions based upon its surroundings, displaying problem-solving capabilities similar to that of humans. Often used in consumer-facing businesses as an intelligent, voice-driven interface, in manufacturing its further applications include: machine learning algorithms; the ability of motion sensors and machine vision to spot and even predict defects, then adjust accordingly; and adaptive manufacturing where robots are able to learn new tasks rather than be reprogrammed.


A sequence of mathematical instructions and rules that a computer uses to calculate an answer.

Augmented Reality (AR)

A technology that superimposes a computer-generated image on to a user's view of the real world in real-time via a headset, providing a composite view. This is ideal for prototyping and hand assembly. This is distinct from virtual reality in that in VR, the user only sees an artificial environment.

Two architects using augmented reality


Describes the use of digital systems to control equipment and machinery within a factory.

Big data

The collection and storage of massive amounts of structured, unstructured and semi-structured data that has the capacity to be mined and analysed. It enables organisations to have information about every part of their business and use it to predict and plan future production and supply possibilities.


A blockchain is a continuously growing list of decentralised, digitised public records, called blocks, of all cryptocurrency transactions, which are linked and secured using cryptography.

Block chain concept

Cloud computing

Not just a fluffy cloud: using a network of remote servers to host your data on the internet, not on your PC or local server. This – pretty much – allows you almost infinite space to store data, plus negates the potential for data loss and reduces investment in hardware. It also enables collaboration irrespective of geographical location and offers always-on availability.

Cloud robotics

Communication between the physical and digital worlds that is controlled in the cloud and extended to robots used in mobile applications.


A cobot, or collaborative robot, is a robot intended to physically interact with humans in a shared workspace, as opposed to ones that are designed to operate autonomously or with limited guidance. Cobots that can work safely alongside humans are already being used in some manufacturing plants in Britain, improving the efficiency of the manufacturing process. A key difference is that cobots are adaptive – able to learn new tasks rather than having to be reprogrammed.

Cyber-Physical Production Systems (CPPSs)

Physical and digital items are connected, monitored and managed with computer programming and algorithms.

Digital supply chain

An environment where processes are web-based. If organisations want to successfully implement Industry 4.0 concepts, they will need to integrate a digital supply chain into their processes. Greater connectivity allows greater sharing of manufacturing processes, production control and scheduling.

ERP software

Enterprise resource planning (ERP) refers to business-management software, usually comprising a suite of integrated applications, that an organisation uses to collect, store, manage and interpret data from its many business activities, including inventory management, cash flow, raw materials, CRM (customer relationship management), production capacity and the status of orders, purchase orders and payroll. Often for the first time in a business, it allows individuals to access data from other departments, therefore, using the same information to base their decisions on.

Fog computing

Extending cloud computing to the edge of an enterprise’s network, reducing the amount of data transferred to the cloud for processing and analysis, improving security. This creates efficiencies and has opportunities for companies concerned with compliance issues.

Human-Machine-Interface (HMI)

HMI is the space where interactions between humans and machines take place. Applications within Industry 4.0 centre around machine control achieving new levels of safety and efficiency. For example:

• machine operators using wearables or AR glasses receive physical feedback from haptic technologies

• maintenance professionals are able to visualise machine status in real-time, allowing them to prioritise workload and anticipate tooling and material requirements

• remote collaboration allows off-site specialists to consult or guide local technicians through tasks that would otherwise require travel

• managers are able to survey status of all operations inside a facility.

Internet of Things (IoT)

A network of physical devices, vehicles, home appliances and products embedded with electronics, software, sensors, actuators and connectivity enabling connection via wireless technology.

Internet of Things concept


A computer system or software’s capacity to communicate and exchange data with other machines and software systems.

Lights out environment

Lights out manufacturing is a methodology rather than a specific process, referring to fully automated factories that run ‘lights out’ and require no human presence on-site, hence, they can run with the lights off. A fully automatic factory is one where raw materials enter and finished products leave with little or no human intervention.


Machine-to-machine communication: when networked devices can exchange information and perform actions without the manual intervention of humans. The technology that underpins the Internet of Things.

Close up of Industry 4.0 machine at work

Open data

Data that is available for public use without restriction.

Overall Equipment Effectiveness (OEE)

The evaluation of how effectively equipment is working in a manufacturing environment.


A system comprising a hardware device together with an operating system that an application, program or process can run upon.

Predictive maintenance

The capacity to predict the productivity and maintenance needs of machines within a smart factory. Where predictive maintenance also has potential is for machine manufacturers to have data coming back to them after their products are installed in the customer’s factories. By better understanding how a product is used and being able to detect defects (and ideally, remote maintenance) leads to better future design and improved customer relationships.

Device demonstrating predictive maintenance

Smart factory

Factories that are monitored by artificially intelligent machines that oversee the manufacturing process, reducing the manpower traditionally required on the factory floor. The data provided by the connected elements brings huge opportunities for businesses to better understand their process, potential flaws and, ultimately, to implement considerable efficiencies.

Smart manufacturing

An environment where computers control decision-making in which the physical and digital are connected and communicate with one another to improve production.

SCADA (supervisory control and data acquisition)

This is an application rather than a specific technology. A control system in which peripheral devices are used to interface, in addition to computers and other networks.


Refers to the savings that integrated Industry 4.0 technologies and factory processes are expected to bring.

Virtual Reality (VR)

A computer-generated simulation of a three-dimensional image that can be interacted with in a seemingly real or physical way by a person using special electronic equipment. In the manufacturing environment it can allow for rapid visualisation, prototyping and simulation.