Whether it’s the FitBit on your arm, a bathroom mirror with a heads-up-display, or the orchestra of smart light bulbs that you have in your home, the Internet of Things, despite its ridiculous name, is feature-creeping on the life of the average consumer. Cheaper than ever before can high-functioning internet connected devices be manufactured, thus offering entrepreneurs the proverbial “Gold Mine” of opportunity for innovation and automation. And, as is often the case with tech, the reception has been cautiously optimistic. There are those, of course, who call foul, saying the technology cause the apocalypse. But the truth is undeniable, IoT and its big sibling Industry 4.0 will cause economic disruption.

Industry 4.0 you say?

If you’re unfamiliar with the term, Industry 4.0 refers to the allegedly imminent or current industrial revolution. It is characterized by the proliferation of internet connected devices and sensors (IoT), within industry, who are themselves backed by machine learning systems.

Now this definition might make it hard to understand what real-world applications Industry 4.0 may refer to or apply to, so let’s plant it firmly in the ground by understanding the impact of the previous industrial revolution.

The last industrial revolution, the digital revolution, started with the invention of the transistor. From that point on, it became possible to process and store data digitally. It meant that “simple” tasks such as calculations or data manipulations could be automated. As a result, from the late forties onwards, computers were created with increasing complexity allowing for the automation of a greater set of tasks. Think of your Word processor or your email client: the analog equivalent of these two applications alone would have required several support staff to operate. In another case, a factory could be automated through the use of computer controlled machinery. As such, the third industrial revolution was largely concerned with simple automation — automation that needed to be conceived by a person and that didn’t understand its own purpose or goals.

Now, while Industry 4.0 is still concerned with digital automation, it takes our current understanding of automation to the next power. It takes the Internet of Things and couples it with machine learning and A.I. so that it can understand what its own goals and KPIs are. It understands what a good process is and it understands how to improve upon its existing ones, all without human intervention.

However, it could not do all of this without incredibly cheap internet-connected sensors. For instance, technologies such as NFC allow for visibility without line of sight. In other words, you can communicate with passive sensors without needing to see them. This means that anyone who runs a factory can place sensors in any nook and cranny they want to and they can have their systems see manufacturing processes that, in the systems point of view, had effectively never existed.

That being said, having sensors in your factory is all good and great, however you still need a system to handle it. For, without a system strong enough to make a narrative from all its input data, all these sensors are useless. As such, this is where the importance of Big Data processing capabilities and machine learning come into play. Using sensor data, a system such as this can be taught to optimize the processes that it runs.

Now, what does this actually look like?

Let’s go back to the example of the factory. The factory of Industry 4.0 would be able to use ubiquitous sensor data to understand where possible bottlenecks or inefficiencies are and either fix it, or, if it doesn’t have those capabilities on its own, automatically assign them to the appropriate human resource to fix it.

And, if you think this could only be possible in some wild and distant future, factories like this are already producing goods. Adidas brought back some of its shoe manufacturing to Germany where it makes shoes with only robots.

Furthermore, it is not an outlandish concept that the Industry 4.0 factory system could control its own fleet of autonomous trucks. In this case, the factory could automatically summon trucks when needed and cheaply delivery goods.