Smart Factory Implementation – Industry 4.0

Industry 4.0

Industry 4.0 (Smart factory) refers to the convergence of information technology (IT) and operational technology (OT) for digital transformation of operations. This article will provide a practical industry 4.0 technology implementation roadmap with maturity, challenges and implementation advantages based on my 20+ years of experience in the manufacturing and distribution sector.

Current State of Operations (Manufacturing / Distribution Factories):


  • IT and OT teams working in silos with minimal interaction.
  • Employees who are pessimistic about end-to-end process automation.
  • Limited organizational cybersecurity awareness & planning.


  • Manual processes. (Excel usage for process flows and tracking)
  • Lack of real-time end to end process visibility.
  • Productivity metrics calculated from multiple unreliable sources.

Technology :

  • Legacy systems and machines that are not connected.
  • Reactive use of data with storage limitations.
  • Wi-Fi dead zones with Internet bandwidth issues.

Smart Factory Capabilities

  • Integrated Business technology team developing products providing competitive advantage.
  • Automated processes with interconnected machinery (Machine-to-Machine (M2M ) with seamless data flows, leveraging technologies like Internet of things (IOT), cloud compute, 3D printing, robotics, big data, artificial intelligence (AI), predictive analytics, virtual and augmented reality, digital twins and digital thread. (based on need and return on investment)
  • Security team performing continuous vulnerably assessment to secure infrastructure protecting data and intellectual property due to increased cyber risk with Interconnected systems generating massive amounts of data.  



Following is a five step generic process that need to be customized to align with your current state and business strategy for a successful implementation:

1.  Understand business vision and expected outcomes driving the initiative

  • Understand business drivers, budget, expected outcomes and risk tolerance to ensure we develop a realistic implementation roadmap.
  • Identify and analyze stakeholders (conduct stakeholder analysis)
  • Develop change management plan considering the business process changes.

2.  Develop plan and select experienced team

  • Select team with credibility and experience with business and technology.
  • Empowered digital innovation team with innovative Business leaders, manufacturing leaders, engineers, technology leaders, data scientists and analysts.
  • Select third party service providers with proven industry 4.0 strategic and implementation experience.
  •  Define scope (start small): Narrow initial sites/factories with motivated stakeholders with high probability of success.
  • Align implementation with business goals and strategy
  • Understand inefficiencies and improvement opportunities at the selected site / factory.
  • Identify technologies to drive value and productivity.
  • Document productivity key performance indicators (KPI’s) that are agreed upon and signed off by stakeholders.
  • Develop initial implementation plan draft based on current state, business drivers and stakeholder expectations providing incremental value. 

 3.  Implement foundational technology needed to support smart factories

  • Update relevant systems (ERP/MRP/MES/PLM) to ensure they are reliable and can interface with other systems and sensors (Interoperability).
  • Ensure you have enough bandwidth from each site with redundancy to transfer significant amount of data to/from cloud.
  • Enhance communication hardware in the plant (switches / access points) to proactively manage entire plant remotely.
  • Implement Cloud compute capacity with scalable storage to store big data and perform predictive analytics.
  • Implement cyber security standards and frameworks like NIST, Critical Security Controls (CIS), and/or ISO/IEC 27001 to ensure that intellectual property (IP) is protected.

4.  Integrate Information Technology (IT) with Operational Technology (OT)

The success of Industry 4.0 is based on integrating both IT and OT (people, process and technology). This is probably the most difficult step since it includes technology and factory transformation that impacts internal and external stakeholders. 

  • Conduct workshops for technology teams to understand operations and for operational teams to understand technology.
  • Document current operational processes with strengths and weaknesses.
  • Involve Industry 4.0 experts to leverage technology to automate.
  •  Design smart factory involving all stakeholders and finalize implementation roadmap considering benefits and risks.

5.   Implementation, Lessons Learned and Rollout (Smart Factories -> Smart Company)

  • Incremental implementation of Industry 4.0 roadmap.
  • Understand the lessons learned and remediate.
  • Measure and communicate the expected benefits vs actual benefits.
  • Develop global rollout plan to transform your organization to enable a smart company.

Industry 4.0 Implementation Maturity


In conclusion, 4th Industrial revolution is here with opportunity to merge operations and technology. Organizations that embrace Industry 4.0 and successfully digitize their operations will be leaders in their market place.  

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Sri Adusumilli

Sri Adusumilli is Technology Executive and Author. He has over 25 years of diverse leadership experience in both start-ups & fortune 500 companies including TruckPro, Centric Parts, AP Exhaust, Hino Trucks, Dana and Chrysler.