Executive Summary

In this report, review the literature on Industry 4.0 concept. In particular, the focus is on the origins of the concept of the fourth industrial revolution and charting its development upto the present day. The adoption of industry 4.0 has been evaluated in the context of TMC company operating in the automobile sector. This focus has been informed by the view that increased automation, data processing and exchanges, cyber-physical systems, the internet of things, and cloud industry have been prevalent in the modern business environment. These have been informed by the need to integrate transformation, leading to direct implication on the manufacturing practices and specifically in organisations value chain. Industry 4.0 can strategically be embedded in a lean production system that is currently adopted by TMC.

1.0 Introduction

In the contemporary highly competitive globalized business environments, manufacturing organisations are supposed to manage a constant evolvement of their production systems for accommodating different changing markets demands. This is only possible through implementing radical advancement in the existing manufacturing technology. According to Rojko (2017), one of the strategies that can be adopted is the Industry 4.0 which is a strategy that is informed by the need to integrate business and manufacturing processes. This integration also features all the stakeholders of an organization value chain that includes the suppliers and customers. Apart from the manufacturing companies, Szozda (2017) note that industry 4.0 is equally associated with other areas of organisation activities, including global supply chain management. Therefore, it can be pointed out that an industry 4.0 production system is flexible and facilitates individualized and customized products development. Taking this background into account, this report focuses on reviewing the literature on Industry 4.0 concept. In particular, the focus is on the origins of the concept of the fourth industrial revolution and charting its development upto the present day.

1.1 Selected Organisation Background

In this report, the selected company is Toyota Motor Corporation (TMC), which is a multinational type organisation and has been in active operations since 1933 (Britannica.com 2020). It is a Japanese company that designs, creates, assembles, and sells passenger cars, minivans, and commercial vehicles. It also engages in the sales of related parts and accessories, mainly in Japan, Europe, Asia, and North America (Nkomo, 2013). The main customers are individuals and organisations who purchase their vehicles under five brands; Toyota, Hino, Lexus, Ranz, and Daihatsu. The company employed 370, 870 workers globally as of 31 March 2019 (Toyota, 2020). The first passenger car model AA Sedan was launched in 1936. TMC is among the top largest automobile manufactures in the world and is the leader in sales of hybrid electric vehicles. It’s net sales in the fiscal year ended March 2019 exceeded a record 30 trillion Japanese yen (Statista, 2019). There are many competitors of TMC, and the major ones are Ford, General Motors, Volkswagen, Suzuki, Hyundai, Nissan, Honda, BMW, and Mercedes (Notesmatic, 2018). Since its foundation, TMC has acted in line with its guiding principle, which is the production of reliable vehicles and the sustainable development of the society through constantly evolving innovation and the provision of quality products and services. The vision of the company is to lead the future mobility society by improving the lives of people around the world with the best and most responsible ways of transporting them.

2.0 Literature review – Industry 4.0

2.1 Definition of Industry 4.0 Concept

In a general definition, Oztemel and Gursev (2020) defined industry 4.0 as a practice of generating a transformation from dominant machine manufacturing to digital manufacturing. To affirm this definition, Ozer et al. (2018) noted that Industry 4.0 is the fourth industrial revolution and is defined as the intelligent synchronization of various technologies, including mechatronics, mechanical engineering, telecommunications, industrial engineering, and computers. However, Szozda (2017) provided a specific definition and identified Industry 4.0 as an increased level of automation, processing of data and exchanges, cyber systems, internet of things, and industry cloud technology. The author equally noted that Industry 4.0 does not only affect the manufacturing activities but similarly influences the supply chains in the areas of production, procurement, and distribution process (see figure 1).

Figure 1: Principles supporting identification and implementation of Industry 4.0

Source: Summarised from Szozda (2017)

2.2 Evolution and Origin of Industry 4.0

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