Iot Smart Factory

How does a factory get smart, digitized, automated and efficient?

Geopolitical crises, raw material shortages and sustainability regulations are just some of the challenges manufacturers are facing. The use of smart factory technologies can help them overcome these challenges and create many benefits at the same time. But how does a factory get smart?

Internet of Things
Industrial IoT
Article

Jul 07, 2025

The fourth industrial revolution – with Industry 5.0 just around the corner

We are still living in the midst of a revolution. Industry 4.0, the fourth industrial revolution, is all about digitalization, connectivity, big data and communication. Industry 4.0 has been transforming organizations by introducing automation, standardization, and advanced technologies that enable machines to make decisions on their own. This transformation starts by improving internal operations, but it doesn't stop there. It also extends beyond the organization's boundaries, connecting with suppliers and customers across the entire value chain. This leads to increased visibility, agility, and predictability throughout the entire process. While most companies are still grappling with Industry 4.0, a new version is already being announced – which, however, can be seen as a further development of Industry 4.0 rather than a new revolution: Industry 5.0 describes the direct collaboration between people and smart machines. These help people to work more effectively and productively with technologies such as IoT, big data, etc. Industry 5.0 adds a personal, human touch to the concept of Industry 4.0: processes that support people physically and mentally, machine capacities that combine with human intelligence and ingenuity, personalization, collaboration, and efficiency. A concept that particularly emphasizes the contribution that companies make to society focusing on sustainability, resilience, and ethical considerations.

At the heart of both Industry 4.0 and Industry 5.0 is the smart factory, a place where humans work together with machines, systems, and robots , driven by the power of data, artificial intelligence, and the Internet of Things (IoT). As we embark on this journey, it's essential to understand the motivations behind the creation of these smart factories and the benefits they bring.

Motivations for a smart factory

By harnessing the power of Industry 4.0, manufacturers can unlock new levels of efficiency, productivity, and innovation. The goal of this revolution is to create a seamless, interconnected ecosystem where products, machines, and systems communicate with each other in real-time, driving autonomous production and optimized value chains. This brings a lot of benefits: smart factories can achieve greater outcome and growth, ensure high quality and reduce the risk of human error. They also provide the right data for analysis and optimization purposes as well as minimize downtime and disruptions through predictive maintenance. They safeguard the supply chains from disruptions, offer customized products, and meet sustainability commitments – to ultimately become more competitive.

The new Industry 5.0 phase builds on the fourth industrial revolution (Industry 4.0) and is enabled by advancements in information technology that include aspects such as artificial intelligence, automation, big data analytics, the Internet of Things, machine learning, robotics, intelligent systems and virtualization, which can make a smart factory even smarter.

The advantages are obvious but what makes a factory smart?

For the smart factory to function, the following requirements must be met:
 

  • Smart usage of data, collected and communicated via ubiquitous, reliable connections: While production is running at full speed huge amounts of data are collected. It is essential to collect, analyze, understand, and deploy this massive amount of data effectively and securely. Therefore reliable and secured connectivity of people, machines and "things" in physical and virtual domains via wired and wireless technologies is the heartbeat of every smart factory, allowing high-speed communication for complex automation. 
  • Sustainability: Rising energy demand while optimizing energy efficiency and reducing CO2 emissions can be achieved by reliable data that can lead to energy savings by uncovering inefficient production flow, optimizing production and logistics planning, and anticipating maintenance needs. Smart semiconductor solutions are the essential gatekeepers for these developments and innovations. At many automation touchpoints they ensure efficient and secure data flow, control the speed of industrial motors and facilitate unexpected gains in overall flexibility.
  • Autonomous production with transparent and flexible supply chains: Innovative automation solutions bring increased quality, accuracy and precision to industrial processes by creating an ecosystem of sensors, machines, robotic devices and other instruments connected together, communicating and exchanging data with both internal and external software automation systems. Real-time and end-to-end visibility, shared with all participants, enables smart and resilient supply chains. Issues can be anticipated at an early stage and therefore prevented before they occur.  
  • Keeping a finger on the pulse: New technologies and developments, for example in the areas of machine vision, augmented reality, AI and machine learning, robotics, predictive maintenance and condition monitoring, can help to keep the smart factory even more efficient, flexible and resource-saving.

Shaping Industry 4.0 by empowering the smart factory

We are at the beginning of the fifth industrial revolution, at the heart of which is collaboration between humans and machines. Based on personalization and the use of collaborative robots, employees can perform tasks with added value for customers. This latest development goes beyond manufacturing processes and includes increased resilience, a human-centered approach and a focus on sustainability. The increasing focus on sustainability and resilience means that companies are becoming more agile and flexible while having a positive impact on society – rather than simply mitigating negative impacts.

Let's continue to drive and shape the Industrial Internet of Things. Together we make the IIoT work. And by doing so, we can unlock the full potential of manufacturing and create a brighter, more sustainable future for all.