Industry 4.0

A Guide to Digital Transformation in Manufacturing

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Industry 4.0 – the automation of manufacturing through the use of smart technologies like artificial intelligence and the Industrial Internet of Things (IIoT) – involves:

  • digitization of formerly analog processes,
  • automation by transforming human activities and knowledge into system performed actions and decisions,
  • and continuous optimization.

Industry 4.0

For this reason, individual digital transformation projects should be considered cyclical efforts which exist along a continuum of automation. In other words, each automation initiative and its component parts should be treated as an ongoing and continuous cycle of digitization, automation, and optimization in an effort to advance towards increasing levels of automation capability. The future of automation is unknowable, however, it is safe to bet that there is no foreseeable limit to what is possible as technology, computing power, and knowledge progress.

Navigating the Automation Continuum

For many manufacturers, strict regulatory and quality standards, complicated processes and customized products, cutting-edge methods and equipment, and advanced materials add additional levels of complexity to already challenging production targets. Digital transformation in the context of manufacturing is the process of moving through the automation continuum by replacing analog activities with digital infrastructure and processes in order to minimize complexity, improve productivity, reduce misprocessing, and reduce production costs. 

Navigating the automation continuum from analog to digital is a huge undertaking but, with careful planning, benefits can be seen early on in the process, while the number and scope of the improvements grow with each step approaching higher levels of automation.  

Due to the complexity and risk associated with digital transformation projects, it’s imperative to properly assess, scope, adhere to strict project management principles (either traditional or agile methodologies) and enlist the assistance of a project manager with both breadth and depth of industry expertise and experience in the area of manufacturing automation.

MES with
Manual Interactions

Basic Equipment


Integration of
Complete Lines

High Automation

Lights Out Fab

Automation: A Human-Centric Effort

As human activities and knowledge are transformed into system performed actions and decisions, digital transformation is necessarily a human-centric effort. With all digital transformation initiatives, it is important to consider the affect they will have on the people involved. Remember to ask questions like:


How can the digital transformation improve operator safety and ergonomics?


In what ways can automation free people in the factory from the burden of remembering far more details and procedures than is reasonable?


How can digital transformation help improve productivity by managing and executing tedious or time-consuming tasks?

professional development

What professional development opportunities exist for affected workers as a result of our automation initiatives?

Remember to engage people early to get their input, understand their concerns, and share with them how the automation initiatives will benefit them. Gather their requirements and feedback, and incorporate their suggestions into the planning throughout the digital transformation process. Additionally, identify opportunities for the creation of new roles within the organization which will allow workers to apply their skills and experience in new ways. By focusing on people first, any “disruption” caused by digital transformation will help those who are affected to see how the disruption will be a change for the better.

A Guide to Digital Transformation

This guidance is based on SYSTEMA’s 30 years of experience in manufacturing automation. The approach in which the path to high automation is presented below is based on that experience as well as any dependencies that exist between automation initiatives (e.g. digital backbone is a prerequisite for equipment integration and automation). It may also be helpful, conceptually, to classify the sections of this guide in terms of organizational efforts, core processes and functionality, and system components.

Organizational Efforts

Organizational efforts are largely addressed in the project management section. Organizational efforts include identification of business objectives, stakeholder alignment, agile methodologies, project planning, organization of project teams, development of change management strategies, and project execution.

Core Processes & Functionality

Determining the core processes and functionality required to support your digital transformation strategy will inform which system components will be needed and will also offer some insights regarding how to continue to progress along the automation continuum. Core processes and functionality may include WIP management and control, data collection, reporting and analytics, advanced manufacturing intelligence and high automation.

System Components

Identifying the system components which align with, and are required by, your digital transformation strategy will play a key role in determining an implementation and roll-out strategy. System components include MES, digital backbone, equipment integration and automation, Industrial Internet of Things (IIoT), recipe management, and automated material handling systems.

Digital Transformation: Key Benefits

  • Improved productivity
  • Staffing flexibility
  • Reduced operator training time
  • Reduced operator training expense
  • Improved quality
  • End-to-end manufacturing transparency
  • Paperless manufacturing
  • Manufacturing agility
  • Improved efficiency
  • Transparency
  • Reduced costs

The digital transformation process produces both short- and long-term benefits. Of course, there is a cost to undertaking a digital transformation and every factory is different. For this reason, appropriate analysis should be done to determine what makes sense for your individual situation.

SYSTEMA has experience with the digital transformation process as realized in several world-class manufacturing facilities.

One Fortune 100 technology manufacturer SYSTEMA worked with on their digital transformation reported the following benefits:



A 50% increase in operations productivity as measured by WIP moves per operator per day

staff requirements

More flexible manufacturing staff requirements


Reduced cost and time for operator training


The company’s internal cost-benefit analysis shows the program saving the company $30 million USD per year

In short, they reported improved productivity, more flexibility, less training, and big savings. Your priorities might be different. Keep them in mind as you learn more about approaching digital transformation and think about how each step along the automation continuum can benefit the people and processes in your organization.