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The Transformation of Manufacturing: Development of Industry 4.0

This article is based on the findings in the report, Understanding the Impacts of Industry 4.0 on Manufacturing Organizations and Workers, prepared for the Smart Factory Institute and written by Chris Cunningham, PhD, UC Foundation Professor of Psychology, and Scott Meyers, Graduate Assistant, Psychology Department & Smart Factory Institute, from the Industrial and Organizational Psychology Department at the University of Tennessee at Chattanooga.


Industry 4.0 is the result of more than 300 years of evolution in manufacturing processes, practices, and workforce dynamics. For some perspective, in the late 18th century, Industry 1.0 introduced mechanical production and the integration of water/steam power (Statista, 2021). This helped enable mass production with the use of machines instead of relying solely on human or animal power (International Business Machines [IBM], n.d.a). A corresponding impact of this transition was the beginning of a transformation in workforce dynamics, as some people who had been functioning as direct “producers” needed to become what were essentially “operators” of processes or equipment that did the producing.


About a century later, Industry 2.0 brought a new age of mass production. This revolution introduced assembly lines and new oil, gas, and electric power sources (IBM, n.d.b). New communications were introduced with the invention of telegraphy (1840) and telephony (1880). During this time, “Taylorism” and scientific management principles were incorporated into the manufacturing car assembly line to increase efficiency and production (Statista, 2021; Taylor, 1911). Along with mass production, slight hints of production automation also began to develop (IBM, n.d.b). With these transitions came many additional adjustments to workforce dynamics, including the implementation of hierarchical and sometimes very rigid management structures to keep workers focused on their assigned tasks and work-related responsibilities.


Beginning in the middle of the 20th century, Industry 3.0 saw the application and integration of Information Technology into manufacturing systems. Electronics, advanced telecommunications technologies, data analysis, and industrial robotics were used to automate production processes (Statista, 2021). Manufacturing production facilities began to embed programmable logic controllers (PLCs) into machinery to further automate and standardize processes and collect data to support ongoing and continuous efficiency improvement efforts (IBM, n.d.b). Additionally, with the development of the first micro-chip computer in 1971, computerized technologies also were introduced and began to spread. In terms of workforce impacts, this era of manufacturing continued to challenge ways of working and managing workers, while also introducing new and increasingly technology-associated knowledge, skill, and ability requirements. Collectively, the changes associated with this era also significantly increased the amount of attention being directed toward targeted training and development efforts for the manufacturing workforce. Initially this training was directed at engineers and others who already had advanced training and it really was not until the 1990s before the concept of multi-craft and multi-skill development emerged (e.g., training electricians to also have maintenance expertise, or training mechanics in associated computer-based technologies). Despite the importance of this type of cross-training and role enlargement, a large proportion of the manufacturing workforce (especially in small to medium-sized organizations) has not had access to such training opportunities. As a result, a growing gap has developed between larger manufacturing firms and smaller ones in terms of the adoption of Industry 3.0 and the general technology-focused upskilling and development of manufacturing workers.

The Evolution of Manufacturing

Collectively, this continuous evolution process has more recently brought the manufacturing industry to its current, Industry 4.0 (Statista, 2021). This fourth Industrial Revolution refers to the rapid evolution and increasing integration of automation, smart factories/machines, connected systems, and digital technologies such as computer-driven artificial intelligence (AI), robotics, additive manufacturing, big data analytics, augmented reality (AR), virtual reality (VR), and cloud computing (IBM, n.d.b; Statista, 2021). A major theme associated with Industry 4.0 is the blurring of physical and virtual world boundaries. Cyber-physical Production Systems (CPS) and smart machines have created networked connections between each other and production plants, fleets, and humans (Industry 4.0 Report; Statista). The generation and collection of vast amounts of both production process and other forms of operational data can inform better decisions and improve manufacturing efficiency (IBM, n.d.b). A more digitalized environment has introduced the digital supply chain, digital products/services, new business models, autonomous machines, and virtual environments. This new era has also been described as a time of “mass-customization” of manufactured products (Statista, 2021). This customization can better meet customer demands and increase production efficiency in smaller lot sizes (IBM, n.d.b). The impacts of Industry 4.0 on the workforce are yet to be fully identified and understood, but we explore a number of them in the remainder of this report. Without question, the increasing technologization and partial and full automation of many manufacturing process is changing the very nature of the relationship between workers and their manufacturing tasks and responsibilities. As Industry 4.0 brings to reality the “smart factory”, there is a corresponding need to ensure a sufficient population of “smart workers” available to meet the need for broadly knowledgeable and multi-skilled workers than ever before. Unfortunately, and as noted in the previous paragraph, not all manufacturing organizations are equally ready to adopt and benefit from Industry 4.0; there is a real and significant need for scalable, technology-focused training that can help to upskill and reskill incumbent and emergent workers in manufacturing organizations of all sizes.


It is worth noting that there is beginning to be some discussion of an Industry 5.0 period, which is projected to introduce a complete digital ecosystem featuring virtual customer interface, virtualized processes, virtual chain networks, and a completely connected ecosystem. In contrast to the current Industry 4.0, this era is projected to involve the “mass-personalization” of products bringing the human touch back into manufacturing (Statista, 2021). We anticipate the impacts of this industry transformation on the workforce to be less pronounced than what has been seen in previous transitions, with the main impact being the need for more training in many of the computer and internet supported technologies that form the backbone for Industry 4.0.


Join us LIVE as we explore the current manufacturing industry and the challenges and opportunities it faces in the midst of the adoption of Industry 4.0. The Transformation of Manufacturing will be a 3-stop tour across the state of Tennessee with stops in Jackson, Chattanooga, and Smyrna beginning February 2, 2022.


Each session builds on the prior session. In-person and virtual attendance options are available. Join us in person at your local session and virtually for the other two sessions!


February 2, 2022 | 7:30am - 8:30am (CT)/8:30 - 9:30am (ET)

Location: Jackson Chamber of Commerce, 197 Auditorium Street, Jackson, TN 38301

In-Person & Virtual Attendance Options Available


February 9, 2022 | 7:30am - 8:30am (CT)/8:30 - 9:30am (ET)

Location: LIVE from the Smart Factory Institute, Chattanooga, TN

Virtual Attendance Only


February 16, 2022 | 7:30am - 8:30am (CT)/8:30 - 9:30am (ET)

Location: TCAT Smyrna/Nissan Training Center, 663 Ken Pilkerton Dr., Smyrna, TN 37167

In-Person & Virtual Attendance Options Available


Sessions are free to attend, registration is required.


This tour is based on the findings in the report, Understanding the Impacts of Industry 4.0 on Manufacturing Organizations and Workers, prepared for the Smart Factory Institute and written by Chris Cunningham, PhD and Scott Meyers from the Industrial and Organizational Psychology Department at the University of Tennessee at Chattanooga. Get access to this full report by clicking here.

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