Benefits of Industry 4.0

The benefits of industry 4.0 include increased profitability, efficiency, and productivity, combined with more flexibility, better knowledge sharing, and improved decision making. In addition, industry 4.0 smart factories can also benefit from improved sustainability and a better overall customer experience.

The fourth industrial revolution represents the latest and more advanced step in the history of manufacturing from industry 1.0 to industry 4.0.

Industry 4.0 and the associated digital transformation benefits are very exciting. However, it is key to first understand what industry 4.0 is, its benefits, and how those apply to your business.

The return on investment (ROI) of an industry 4.0 implementation can be game-changing because of the benefits offered by those technologies.

Industry 4.0 can bring significant competitive advantages in all areas of the business, from the shop floor to the top floor. Here are the main advantages of industry 4.0.

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14 Benefits of Industry 4.0

What are the benefits of industry 4.0? Here are the industry 4.0 benefits in manufacturing and factory digitalization benefits!

1. Improved efficiency and productivity

Improved efficiency and productivity

One of the main benefits of industry 4.0 is improved efficiency and productivity. Those will improve in multiple areas of the business, from the production line up to the product design and engineering.

We can consider industry 4.0 as the ultimate efficiency optimization and productivity boost. Because the industry 4.0 technologies and infrastructure allow the company to produce more, faster, and better while also spending less.

The production lines will benefit from an increased Overall Equipment Effectiveness (OEE), with faster changeovers, less downtime, predictive maintenance, more effective monitoring, and smart decision-making automation.

It is not uncommon for a business to experience an OEE improvement of more than 90% after correctly implementing industry 4.0 digital transformation technologies.

New Product Introductions (NPIs) will be more streamlined and product customizations will be easier to implement.

Product design and engineering will become more effective thanks to automated reporting, streamlined data sharing, and overall improved visibility of the design and production processes.

Thanks to the unified data structure, it will be easier to develop and deploy Artificial Intelligence (AI) applications, that will help to improve the product design methodologies and discover new innovative solutions.

The company will enjoy plug-and-play software integrations thanks to the unified data structure. This means that any software or machine in the company can be replaced without impacting other areas of the business.

Making any upgrade easier to manage and implement will also contribute to improving the efficiency and productivity of the business.

2. Improved knowledge sharing and collaboration

Improved knowledge sharing and collaboration

An important benefit of industry 4.0 is that thanks to IIoT (Industrial Internet of Things) protocols any person, machine, or software will be able to easily access and share the needed information where needed, when needed, and with whoever needs it in real-time.

In industry 4.0 information is easily shared regardless of location, time zone, or software, facilitating collaborative work. Data can automatically be shared with any entity (human, system, or machine) that needs it.

Moreover, with IIoT most of the information will be shared automatically between machines and systems without any human interaction. For example, the knowledge acquired thanks to a sensor in a specific facility can be used to instruct any other machine anywhere in the world.

This is very different from conventional manufacturing and engineering, where knowledge tends to reside in silos (individual facilities, teams, or machines).

Those information silos tend to make collaboration more difficult, increase the possibility of errors, and duplicate work. This doesn’t happen in industry 4.0 because of the very nature of the technology and underlying infrastructure.

3. Improved decision-making

Improved decision-making

Improved decision-making comes as a consequence of the frictionless sharing of information. Better decisions can be taken when who is making the choice has access to all the relevant data and information. This is true for both, humans and machines.

Making more good decisions is key to improving business performance and efficiency. This is enabled by better-automated reporting and eventually boosted by AI-generated suggestions and insights based on the collected data.

If you are in a very competitive business, this could be one of the greatest benefits of industry 4.0 for your company.

For example, from my personal experience while working many years in an extremely competitive business I know that very often is the company doing fewer mistakes that wins the competition, not necessarily the one with more resources.

4. Reduced costs

Reduced costs

Considering the improved efficiency, productivity, and decision-making, another natural benefit of industry 4.0 is cost reduction.

Smart factories and buildings can enjoy significantly reduced operating costs because they make better use of the available resources.

The production line downtime is minimized and the machines can confidently run closer to their design capacity.

Thanks to this and improved coordination of the machines and operators along the production lines, the production will also run faster.

The product design can be improved further, reducing any quality issues, and being optimized to reduce the necessary resources and materials.

5. Improved sustainability

Improved sustainability

The benefits of industry 4.0 sustainable manufacturing include enhanced sustainability because the company will become much more efficient. The products will have an improved design and there will be less waste of energy and materials during production.

Industry 4.0 sustainability is one of the cornerstones to achieving sustainable development because it allows for minimizing waste in manufacturing and further improving product design. Sustainable manufacturing is one of the great examples of sustainability that will help us to save the planet.

This allows fulfilling important green tech goals, allowing the economic growth required by one of the 3 pillars of sustainability while also having a positive impact on the social and environmental areas.

On the social side, industry 4.0 and sustainability will help to create good employment opportunities and provide the technological resources and innovation required to fulfill the needs of humanity.

At the same time, sustainability in industry 4.0 will help to reduce any waste of energy and natural resources, helping us to reduce our environmental footprint while keeping good standards of living.

6. More innovation opportunities

More innovation opportunities

Thanks to the big data gathered and analyzed by the industry 4.0 technologies you will gain a much deeper knowledge of every area of the business.

Ranging from the details of business performance to the efficiency of supply chains and every component of your production lines.

This level of detail will be coupled with the power of AI to help you in discovering new innovation opportunities such as:

  • Improving the manufacturing processes
  • Improving the product design
  • Creating new design methodologies
  • Streamlining business procedures
  • Increasing the OEE
  • Reducing waste and inefficiencies along the production lines

The industry 4.0 technologies will benefit innovation at every level of the business.

7. Increased flexibility and product customization

Increased flexibility and product customization

One of the great benefits of industry 4.0 is the increased flexibility and the opportunity for easier product customization. This is because a smart factory is easier to reprogram and adapt to new requirements such as:

  • Increasing or reducing production
  • Mixing up the production of multiple products on the same line
  • Customize a specific production batch
  • Making a one-off manufacturing run

This type of flexibility is an important capability that could help your business acquire new customers and accommodate smaller manufacturing requests from SMEs (Small and Medium Enterprises).

8. Easier regulation compliance

Easier regulation compliance

Regulation compliance for industries like aerospace, automotive and pharmaceutical can be automated thanks to industry 4.0 technologies. This can include things like quality inspections and certifications compliance, track and trace, serialization, and more.

Automating compliance requirements will also help to simplify existing procedures by eliminating the possibility of any manual error. Regulatory compliance doesn’t have to be a manual procedure and industry 4.0 can help the business to reduce the burden.

9. Increased revenues

Increased revenue

A smart factory will generate higher revenues because of improved efficiency, productivity, and flexibility. For example, the increased productivity could be used to win new contracts while the new flexibility could be used to attract new customers that need product customization.

The improved sustainability gained when implementing an industry 4.0 transformation may be used to attract new institutional investors, get government grants or sell eventual carbon credits. Those additional resources can then be used to further increase the business revenues.

10. Enhanced customer experience

Enhanced customer experience

Smart factories can offer an enhanced customer experience. Thanks to complete digitalization, things such as automated track and trace, live order updates, and so on can easily become a reality and improve communication with the customer.

In addition, thanks to the Industry 4.0 flexibility, you will be able to offer unique product customization opportunities and one-off production runs.

Product quality will improve as well, improving customer satisfaction and retention rates.

11. Creates new expertise retention opportunities

New expertise retention opportunities

A little-known but very interesting advantage of Industry 4.0 is the opportunity to better retain expertise and know-how. This can be achieved thanks to technologies such as artificial intelligence.

For example, in a traditional factory, if an expert employee quits, then the only way to retain his expertise and know-how in the company would be to have him train another employee before leaving.

On the other hand, instead, Industry 4.0 offers an additional way to retain expertise. Because the activity of that experienced employee was directly or indirectly recorded by how the machines have been operating during his presence at work.

This means that AI can learn important patterns from the way the machines were operating under the guidance of expert employees. Once learned, AI can instruct the new and less experienced employee to run things in the same way as an expert would do.

Being able to retain indefinitely some of the expert knowledge of employees in the business is definitively an extremely valuable benefit of industry 4.0. While the technology improves, you will be able to retain more and more of that expertise and know-how.

It goes without saying that no machine can fully replace an expert employee, because even the most powerful modern AI doesn’t have the creativity and intuition to solve new problems. Only a human can do this.

12. Increased profitability

Increased profitability

A natural consequence of the industry 4.0 benefits I mentioned above is increased profitability for your business. If you can produce more at lower costs and increase revenue, the company will inevitably be making more profit.

Industry 4.0 technologies will allow your corporation to enjoy higher profit margins while making innovative quality products.

The increased efficiency and flexibility will allow your business to capture new revenue streams with customized products while keeping all the advantages of mass production methods.

13. Improved ESG metrics (Score)

Improved ESG score

Another benefit of industry 4.0 is the improved ESG metrics (Environmental, Social, and Governance) of the company. This comes as a natural consequence of being a much more efficient and environmentally sustainable business.

ESG and sustainability go hand in hand. In fact, the ESG score is used by many institutional investors to decide where to allocate new capital.

By implementing industry 4.0, your business will also benefit from easier access to new financing options. Because a more productive company with higher profit margins and more environmentally friendly operations is a very attractive mix for modern investors.

14. High return on investment (ROI)

High return on investment

Industry 4.0 technologies represent a significant investment in the present and future of your business. The return on investment and potential for the company is huge benefits you should consider when evaluating an industry 4.0 digital transformation.

Enhancing the competitiveness of the company is one of the top priorities of business leaders with a great vision for the future. Technology is moving fast and you can’t afford to be left behind.

Just remember that industry 4.0 is not just a project. It is a journey, and to be more successful it needs to start right now.


The most important benefits of industry 4.0 are:

  1. Improved efficiency and productivity
  2. Improved knowledge sharing and collaboration
  3. Improved decision-making
  4. Reduced costs
  5. Improved sustainability
  6. Improved sustainability
  7. Increased flexibility and product customization
  8. Easier regulation compliance
  9. Increased revenues
  10. Enhanced customer experience
  11. creates new expertise retention opportunities
  12. Increased profitability
  13. Improved ESG score
  14. High return on investment (ROI)

Those are certainly great advantages of sustainable manufacturing!

The fourth industrial revolution offers opportunities in every area of the economy and society. This is inevitably going to impact your business and you should make sure to be prepared to get all the advantages that industry 4.0 will bring.

Industry 4.0 should not be considered just a project, because the transformation will take time and will evolve with the technologies.

Moreover, data is one of the most important resources for the future of your business, because artificial intelligence feeds on it. The more data you have, the more efficiency and profitability you will be able to get.

That’s why you should start your industry 4.0 digital transformation as soon as possible. Put in place the right digital infrastructure, including edge computing devices, and start collecting data in a machine-friendly unified namespace.

The ROI you will be able to get from all of those improvements will be very high and will pay off both in the short and in the long run for your business.

Allowing you to overtake your less visionary competitors and ensure the long-term success of your business is now possible thanks to industry 4.0 technologies. For these reasons, the time to act is now!