Industry 4.0, the fourth revolution, calls for further digitization of factories by enriching the real world with digital information. Trends and technologies play a role to reshape  the way manufacturing is organized and value is created. We see these trends and emergence of technologies:

Application of these technologies will transform the entire value chain and allow companies to develop innovative products and services.  At the heart of digitization lies the availability of relevant information in real time by connecting all entities involved in the value chain. As a result, the internet of people, things and systems creates self-organizing and real-time value added connections within and across companies, and contributes to optimization.
In the fourth industrial revolution, the real revolution will be the business models. Opportunities created by Industry 4.0 for business models will stimulate innovation effort, but at same time require entrepreneurial vision.

The research shows that the ability to analyze data will be decisive for the business models. The companies will expand their portfolio to include connected and automated services. The focus will be on the exchange of data within the value chain, the use of real time data to control the production, and digitally label the products. The possibilities for dynamic value configurations will enable flexible productions, higher equipment efficiency, cost reduction and shorter time to market. Through integration and configurable solutions, customized products will be possible and better meet customer needs.

The focus will be shifted to the needs of end-users, to summarize the use and value perspectives. This will make new service business possible. For example, companies can adapt their offer to user needs, such as Pay-per-Use,  and this way deal more flexibly with the needs and the wishes of the customers.  This will enhance customer relations.

By Industry 4.0 classic boundaries between engineering and ICT are shifted. New layers of technological infrastructure come into play, for example platform based solutions that connect solution provides and customers. We will see  new market entries by data driven companies that take on new roles as cyber-physical system suppliers, data collectors and analyst, and platform operators or network operators. This will transform the ecosystem.

The incumbent companies are  up for a challenge because their business models could be threatened by new entrants, which offer solutions with new technologies that drive digitization. Creative value propositions and disruptive business models are paramount not only for startups, but also for the existing companies.

The Industry 4.0 will affect the existing business models and pave the way for new and disruptive digital business models. By using digitization, new business models will break established value chains and generate revenues that are not possible with existing models. Future business models will be more oriented to a comprehensive value creation. Therefore, closer cooperation with value chain partners and increased horizontal interconnection will be essential . This in return will lead to increased customer benefits through a growing range of solutions, and increased networking with customers and partners.

The organizations need to increase their attention to new business development, extend their capabilities, and build business model innovation competencies to create new value propositions, deliver them effectively and generate revenues. Company strategy and business process might need to be tuned to support these changes and seize opportunities to stretch the company’s boundaries.

Companies, which let business model innovation drive their product innovation, will better profit of the opportunities of Industry 4.0. They will be in a position to create more added value, increase their  target customer segments, and accordingly adapt key resources or engage in new partnerships to create value.

If you are interested to explore new business models with Industry 4.0, mail me at nur.america@newness.nl.