Industry 4.0 | an overview

Which technology makes the Internet of Things possible for industry

In this guide we give a comprehensive introduction to Industry 4.0 and the Internet of Things (IoT). Take a look with us at past technological developments and the challenges of tomorrow!
Industry 4.0


  • What is the Internet of Things?
  • What separates the IIoT from the IoT?
  • What exactly is the difference between Industry 4.0 and the Internet of Things?
  • What is the Industrial Internet of Things currently being used for?
  • Why switching to Industry 4.0 is worthwhile
  • What challenges does Industry 4.0 face?
  • IIoT networks and protocols
  • IIoT data protocols
  • frequently asked Questions

What is the Internet of Things?

In short, it is the general term for connecting devices, much more than just PCs, smartphones or other telecommunications devices, to the Internet. These are often referred to as “smart devices” or smart devices, such as fitness trackers or voice assistants.
The abbreviation IoT ( Internet of Things ) is also common in German and English. The term has been on everyone’s lips for years and the industrial sector, in particular, has long since discovered it for itself.

What does IIoT mean?

This brings us to the so-called Industrial Internet of Things, which is often equated with Industry 4.0. The IIoT takes the concept of internet-connected devices and extends it to factories, manufacturing and industrial plants to share data quickly from near or far. For example, sensors can collect information and transmit it to the local network via a gateway and from there upload it to a cloud server so that you can access it from anywhere at any time. Incidentally, the direct, automatic control of networked devices is also referred to as a cyber-physical system.

What separates the IIoT from the IoT?

The main difference between IoT and Industry 4.0 lies in the application. While the former is for comfort, health and entertainment, the latter is all about collecting and processing sensor data in real-time to increase efficiency, optimize processes and save costs. It is not for nothing that one also speaks of a fourth industrial revolution.
The Industrial Internet of Things is based on a well-known form of computer-aided control, the distributed control system, which connects several autonomous devices and assigns them functions. These devices are thus able to continue to adjust and optimize the section of the production line they monitor independently, without the risk that a single fault in the system will bring the entire production to a standstill, as is the case with a centrally regulated controller would. The IIoT takes advantage of modern cloud computing to enable data sharing, visualization, and analysis—all in near real-time.
Within a few years, Industry 4.0 has developed into a huge sector. More than 60 per cent of global manufacturers now use IIoT-Tec.

What exactly is the difference between Industry 4.0 and the Internet of Things?

Although the terms Industry 4.0 and Internet of Things are sometimes used interchangeably, they are not synonymous. In fact, the Internet of Things and IIoT are part of Industry 4.0.
Industry 4.0 is generally used to describe the accelerated use of all advanced automation technologies available to industry and intelligent manufacturing today and the resulting benefits. The key components are:

  • Machine-to-Machine Communication (M2M)
  • Implementation of autonomous systems
  • Seamless cloud computing
  • Artificial intelligence and related ‘cognitive’ technologies such as image recognition

The history of the IoT and Industry 4.0

The Internet of Things may seem like a very modern concept but in fact some of the core technologies that make up Industry 4.0 date back to the 1960s. As early as 1968, programmable logic controllers (PLC’s) – essentially early industrial computers – were developed to fine-tune the manufacturing process. From the 1970s, the first industrial process control systems appeared, which gradually supplemented the manual work in the factories.
The Internet of Things as we know it today first came into focus in the following decade. In the early 2000s, the IoT gradually left research institutions such as universities and laboratories to reach the end-user. The development of enabling technologies such as Bluetooth, Near Field Communication (NFC) and 3G cellular networks accelerated the growth of this market. At the beginning of the millennium, cloud computing technologies, in particular, favoured the development of the IIoT.

What exactly does Industry 4.0 mean?

The term “Industry 4.0” first appeared in public at the Hanover Fair in 2011 to describe the use of information technology in production. The neologism was intended to place the impact of modern technologies on automation and data exchange in the wake of earlier industrial revolutions. These are:

  • The development of steam and water-powered manufacturing technology in the second half of the 18th and the first half of the 19th century,
  • The use of electrical energy, especially in connection with assembly line work between about 1870 and the beginning of the First World War,
  • The third, so-called digital revolution, with the creation of modern IT in the second half of the 20th century and the developments already described above.

What is the Industrial Internet of Things currently being used for?

Industry 4.0 can bring a variety of benefits to a wide range of industries and sectors, including:

  • Smart production facilities and buildings
  • Supply chain and inventory optimization
  • data analysis
  • condition monitoring

The IoT has already found its way into various sectors, of which pure production is by far not the only sector that can benefit from Industry 4.0. The energy industry and retail can also participate in the revolution thanks to ever-smaller smart devices and intelligent solutions.

Why switching to Industry 4.0 is worthwhile

Despite the boom, not everyone is aware of the concrete benefits Industry 4.0 is supposed to bring. Therefore, we would like to give some examples below of how the manufacturing industry has benefited from the implementation of IIoT so far:

  • Production line optimization: Industrial IoT sensors enable continuous monitoring of the production line from start to finished product. This allows operators to continuously fine-tune the manufacturing process, saving time and money.
  • Inventory and Supply Chain Management: Manufacturing depends on the delivery of raw materials and components. ⦁ Radio Frequency Identification ( RFID) tags and similar wireless technologies enable real-time tracking of components and shipments from site to site, making inventory and reconciliation monitoring much easier.
  • Packaging assessment: Industrial IoT sensors enable manufacturers to monitor the condition of packaging during transport and storage, and even assess how customers typically interact with it. The data submitted is extremely valuable because it allows for design improvements.
  • Real-time manufacturing data: By transmitting operational data, suppliers can remotely manage the factory units at any time, conveniently.
  • Maintenance data: Smart devices and sensors can issue alerts as soon as an error occurs and maintenance work is required. In the same way, malfunctions or the exceeding of limit values, such as excessive operating temperatures or excessive vibrations, can be reported. In this way, maintenance can be planned in advance, downtime can be minimized and the risk of accidents can be significantly reduced. When combined with health and safety records, such sensor data can contribute even more to safety.
  • Quality Control: Combining IIoT data from various sources, including suppliers, manufacturing processes and end-users, provides a more comprehensive picture that can be used to drive overall improvements from production and delivery processes to optimized user experience.

What challenges does Industry 4.0 face?

Industry 4.0 is basically an interaction of several network technologies. The three main challenges can therefore be summarized as follows:

  • The selection of strong signal networks, both wireless and wired
  • Adoption of standardized protocols, e.g. OPC UA
  • Network security vigilance to ward off any cyber threats

The technological requirements such as procurement of the devices are therefore the least of the problems in the transition, but there is a high demand for uninterrupted connectivity. In addition, an understanding of IT security and data storage when implementing IoT in industrial operations is essential to ensure smooth and efficient implementation.

What are the risks of the industrial Internet of Things?

As with any other digital solution, cyber security is critical for the IIoT, but with the appropriate precautions such as staff training and encryption of data transmissions, these risks can be minimized.
With this in mind, it is important to stay current with the latest technologies and updates. So you can be sure that you are always keeping up with the new developments regarding Industry 4.0 and derive the greatest benefits from them.

IIoT networks and protocols

Like any other information technology, the Industrial IoT uses a variety of protocols (data communication formats) and network types. Therefore, it is important to get clarity about each individual protocol when planning to create an IIoT infrastructure for your production facilities.

IIoT networks: how to choose the right hardware!

Internet-enabled devices each use different technologies for networks. Which of these offers the best solution depends on a number of factors, such as the distances to be bridged, the amount of data to be transmitted, the location and power consumption.
New networks are constantly being added to the list of networks suitable for Industry 4.0 and IoT. We have compiled the currently most important ones for you:


Both in private households and in the industrial sector, WLAN is the common radio transmission standard for PCs, smartphones, tablets and more. WLAN networks are integrated into networks via routers, similar to wired Ethernet networks. Most devices use the 802.11 standards defined by the IEEE Association (Institute of Electrical and Electronics Engineers), also known as Wi-Fi.


Bluetooth is a connection standard developed by the Bluetooth Special Interest Group, an interest group of more than 34,000 companies, and is also widely used in the consumer sector. It is based on ultra-high-frequency radio waves (between 2.402 GHz and 2.480 GHz) with a relatively short range. The advantage is the extremely interference-free radio transmission. It is, therefore, suitable for a number of different applications.


Zigbee is one of the leading protocols for connecting smart devices. This is a low-power network that is widely used, especially in industry. It is related to the Dotdot protocol developed by the same team and uses the IEEE 802.15.4 standard, which has a transmission range of up to 300 meters under ideal conditions. In buildings, it still reaches an impressive 75 to 100 meters. The current version 3.0 offers 128-bit encryption for secure data transmission.


LoRaWAN is the abbreviation for Lo ngRange Wide Area Network, an extremely energy-efficient MAC protocol with a transmission range of up to ten kilometres. It offers secure two-way connections over very large networks and can also be applied to digital radio transmission using FSK modulation.


The French telecommunications company Sigfox uses extremely low-power technology for a comprehensive network, similar to the Low Power Wide Area Network (LPWAN). In this way, small smart devices in continuous operation, such as electricity meters and smart-watches, can exchange data in a particularly efficient manner. The power consumption is only a thousandth of that of other radio technologies

IIoT data protocols

  • MQTT (Message Queue Telemetry Transport) is an open, low-power message protocol used to transfer simple data sets between sensors and applications. It is based on the common network protocol TCP/IP (Transmission Control Protocol/Internet Protocol).
  • AMQP (Advanced Message Queuing Protocol) is an internationally recognized open-source standard for transferring messages between devices.
  • OPC UA (OPC Unified Architecture) is an open M2M communication protocol that combines cross-platform shared data exchange in industrial automation with robust system interoperability.

Frequently asked Questions

Can the IIoT replace MES?

MES (Manufacturing Execution System) is an established hardware-based control system for complex manufacturing processes, typically used to ensure efficiency and improve productivity. This is a closed system. It, therefore, does not have the cloud-based analysis and external network functions that are important for Industry 4.0. An extension of the traditional MES with such makes sense, but a complete replacement with IIoT infrastructure is hardly worthwhile for economic reasons alone

What is the advantage of the Industrial Internet of Things for engineers?

The IIoT enables the collection and analysis of a large amount of data that can be collected in several phases of the manufacturing process. In this way, the continuous optimization and improvement of systems can be promoted.

How does the IIoT work?

An IIoT network consists of multiple sensors connected via different wireless protocols to exchange data with the cloud and each other. The basic structure of an IIoT network is as follows:

  • Devices and hardware equipped with sensors, each connected to the local network,
  • The local network itself, which in turn is connected to the Internet and cloud services,
  • Cloud-connected servers that process relevant data such as operating temperatures, mechanical faults and power consumption. Such smaller amounts of data condense over time into big data, which can be analyzed to gain deeper insights into your operations.

What is the difference between Industry 4.0 and Lean Manufacturing?

Lean manufacturing is a production organization method aimed at minimizing waste and maximizing productivity. The principles go back to the 18th century and were formulated in the early 1990s as part of an MIT study of the Japanese automotive industry. Industry 4.0 can support lean manufacturing but is not absolutely necessary for it.

How much does it cost to implement an Industry 4.0 solution?

The costs depend on how large and type of manufacturing processes you want to optimize. Therefore, there is no definitive answer to this question.