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Environment-Unit-1

Unit- 1

Industry 4.0 refers to the fourth industrial revolution, it is the

integration of intelligent digital technologies into manufacturing and
industrial processes. It encompasses a set of technologies that include
AI, big data, robotics and automation. It includes developing smart
factories and analyzing the large amounts of data collected from
sensors on the factory floor that ensures real-time visibility of
manufacturing assets and can provide aid in predictive maintenance of
equipments in order to minimize downtime.

Evolution of Industry 4.0

The first industrial revolution took place at the end of the 18th century
and was marked by mechanization made possible by steam and water
power. The second industrial revolution occurred at the start of the
20th century, was aided by electricity and marked by mass
production, assembly lines and division of labour. The third
revolution occurred around the start of the 1970s, marked by use of
computers and birth of internet to further automate machines and
production processes. The fourth industrial revolution is an extension
of the third industrial revolution. Industry 3.0 introduced computers
into the manufacturing process, but industry 4.0 focuses on
connecting those computers to one another being able to
communicate. Industry 4.0 allows for the creation of smart factories
and enables digital manufacturing. Use of AI, robotics, data analytics,
IoT, cloud computing enables automation and optimization in
industry 4.0 and also provides ample opportunities to innovate and
bring the industry to the next level.

Latest trends: Industry 4.0 trends and technologies are fundamental

in achieving connected manufacturing geared towards smart and
autonomous factories. Latest trends in industry 4.0 are:

Artificial intelligence and machine learning: AI and machine

learning are driving innovations across industries and functional
areas. The advent of advanced AI has opened doors for cognitive
computing, smart machines and generative design. These technologies
are steering manufacturing facilities towards fully automation.
Efficient supply chain management is possible due to AI-driven
algorithms. These algorithms excel in forecasting demands and
automating inventory control, thereby streamlining operations.

Extended reality: Extended reality technologies like mixed

reality, augmented reality and virtual reality are transforming
industrial manufacturing systems. From research and development to
full-scale production and post-production processes, these
technologies are in use. They are shifting the nature of human-
machine interaction towards machine-enabled workers. Through XR,
real-time visualization of data and designs is possible, which
promotes collaboration and innovation.

Cloud computing: It refers to the technology that enables storing and

running of data on the cloud rather than your local computer and this
data is accessed through the internet. The cloud is an extensive
network of remote servers around the world. These servers store and
manage data, run applications, deliver content and provide services
over the internet. Ex Netflix is using Amazon web services for online
videos streaming.

Network & connectivity: It enhances communication between

machines and humans and enables data transmission as well.
Innovation in this area is increasing speed and efficiency and reducing
network connectivity costs. The integration of various connectivity
solutions is creating a cohesive, responsive and adaptive industrial
environment, enabling evolution of smart factories.
Advanced robotics: Advancements in robotics make the processes in
industry 4.0 faster, more efficient and safer. Autonomous robots,
collaborative robots, humanoid robots, mobile robots, cloud robotics,
pick-and-place robots and robot swarms are among the key robotic
technologies impacting manufacturing. The use of robots enhances
precision and agility, frees up the human workforce to concentrate on
high-value tasks.
Advanced analytics: It is a process that helps in discovering the
information by evaluating historical data, data patterns and trends. It
uses artificial intelligence and statistical techniques to discover
information. It converts raw data into meaningful information. It is a
tool used to support decision-making process. It is used to predict
future events based on current and historical information.

Additive manufacturing: It is the process of creating an object by

building it one layer at a time. It is the opposite of traditional
subtractive manufacturing, in which an object is created by cutting
away material from a solid block to achieve the desired shape. It is
about addition, not subtraction. It involves adding material, layer by
layer, based on a digital model, which serves as a blueprint for the
physical object. This method is better than traditional method of
manufacturing, which generates significant waste by removing
material. It is used by industry giants like Boeing and General
Electric. The process begins with the creation of a 3D model using
Computer-Aided Design (CAD) software. This digital model serves
as the blueprint for the object that will be brought into the physical
world. Then machine builds the object, one layer at a time. This
technology provides excellent result in terms of precision.

Cyber security, transparency & privacy: The flow of information

due to connectedness in industry 4.0 is raising concerns about
security, transparency and privacy. Digital ethics and privacy,
privacy-enhancing technologies, end-to-end communication security
and blockchain are some of the new developments in this front,
contributing to a secure, reliable and ethical digital system.

Digital twin: Virtual models of industrial assets are created using

digital twin technology. The adoption of digital twins is driving
industry 4.0 towards hyper-automation. These digital replicas offer
valuable insights into every step of the manufacturing process. It also
facilitates testing without risking actual assets, thereby enhancing
innovation and safety.
International business environment: It is a complex network of
political, economic, socio-cultural and technological forces (factors or
drivers) that shape how organisations conduct international
business. International business refers to the trade of goods and
services across national borders.
Political factors: It constitutes the type of government, the
relationship between government and business and political risk in the
country. There could be dictatorship, democracy or constitutional
monarchies. So, the company should keep in mind the following:

 Approach of government towards business- restrictive or

facilitating
 Legal restrictions like licensing
 Procedure and legal formalities of setting up a business
 Restriction on export and import
 Restriction on pricing and distribution of goods
 Facilities or incentives offered by government

Economic factors: a country could be less developed, developing or

more developed. It depends upon:

 GDP
 Pace of growing
 Level of national and per capita income
 Direct and indirect taxes
 Sources of financial resources
 Availability of managerial and technical manpower

Socio-cultural factors: These factors are critical to consider when

engaging in international business. These factors encompass the
customs, beliefs, values, norms and behaviour of citizens of that
country. An organization that enters the international marketplace,
must know the country’s cultural practices. For ex. in China, a
harmonious environment is more important, in Morocco, women can
assume leadership roles etc. In addition, the importance of work in
employees lives varies from country to country. For ex. the Japanese
feel that work is an important part of their lives. Culture may impact
what employees find motivating, as well as how they respond to
rewards and punishments. For ex. Americans consider personal
growth and accomplishment as the most important motivators.
However, in Asian cultures, promoting group needs may be more
important than rewarding individual achievements. Finally, language
differences are an equally important factor in international business.
To address this, businesses may employ translators, offer language
training to employees or create multilingual marketing materials.
Technological factors: As the humankind is witnessing great
technological advances, an organization that wants to enter
international marketplace needs to make sure the following:

 Level of technological development

 Speed of technological development or obsolescence
 Restrictions or facilities to this advancement
 Sources of technology

Globalization: It is the free movement of goods, services and people

across the world in a seamless and integrated manner. Countries
liberalize their import protocols and welcome foreign investments
into sectors that are the mainstays of its economy. Countries attract
global capital by opening up their economies to multinational
corporations.

Changing nature of globalization: The factors that contribute to the

changing nature of globalization are:

 Containerisation: It is a system of freight transport used in sea

shipping worldwide, forms the backbone of the global economy.
It has reduced the transport costs of moving thousands of
different goods across the globe making globalization easier.
 Technological change: Rapid and sustained technological
change has reduced the cost of transmitting and communicating
information- sometimes known as death of distance. This is a
key factor in promoting globalization.
 Differences in tax systems: Difference in tax system of other
countries enable a country in attracting FDI in order to be
benefitted.
 The digital revolution: The internet has made it easy to access
goods and services produced from anywhere in the world. It is
now easy to purchase goods worldwide. Ex. Amazon has an
online store for a huge range of products. Potential customers
can search for, check for prices, make orders and pay online.
 International economic integration: Nations are reducing or
eliminating trade barriers and coordinating monetary and fiscal
policies to promote globalization. Ex. NAFTA promotes
international trade.
 Financial liberalisation: There is increasing interconnection of
countries due to deregulation of financial markets. It is now
easy to exchange money to global currencies such as US dollar
and British Pound. This has made it easy to purchase goods and
services globally.
 Need for economies of scale: As competition intensifies, firms
are looking for ways of obtaining and enjoying cost savings.
This can be achieved through economies of scales when firms
produce the same product for a huge market. It leads to
promoting products globally. A key example is PepsiCo which
sells its drinks globally.

Changing nature of regulatory environment: Organizations need

to comply with each country's laws and regulations in which they
do business. Rules and regulations can change frequently and they
depend on the political culture in a country. It refers to the legal
and political forces of a country that promotes business. It may
include:
  Rules related to taxes
 Rules related to subsidies
 Monetary policies
 Legislations and acts
 Excise and custom duties
 International trade agreements

Nowadays countries are liberalizing their policies to promote

globalization and international trade.

Digital transformation is the integration of digital technology into

all areas of a business, fundamentally changing how they operate and
deliver value to customers. It is the process by which companies
embed technologies across their businesses to drive fundamental
change. For ex. a company might introduce AI or cloud computing to
enhance its customer experience. A company can even make spot-on
predictions about the products customers will want in next few
months and then shift production to meet demand.

Concepts related to digital transformation:

Digitization: process of translating analog data and information into

digital form. For ex. scanning a document and storing it on a
computer.

Digitalization: use of digital technologies to change business

processes and projects. For ex. training employees to use new
software.

Benefits of digital transformation:

 Increased efficiency
 Greater business agility
 Unlocking of new value for employees, customers and
shareholders