ERP 4.0
ERP 4.0

What does Industry 4.0 have to do with ERP?

Genesis: from Industry 1.0 to Industry 4.0

The world is gradually entering the new and revolutionary phase of 4th industrial development. At the heart of Industry 4.0 is the networking of people, machines and software.

First discussed in 2011, "Industry 4.0" – the idea of a fourth, Internet-driven industrial revolution following industrialisation (1.0), mass production (2.0) and the digital revolution and automation (3.0) – has become a popular buzzword. Even though much of this is still a vision today, the intelligent networking of merchandise management, machines, warehouse logistics, supply chain and services holds enormous potential.

First industrial revolution: Introduction of water and steam power enables mechanical production plants (end of 18th century )

Second Industrial Revolution: Electrical energy enables assembly line and mass production (early 20th century )

Third Industrial Revolution: The use of IT and computer technology allows further automation of production (early 1970s)

Fourth Industrial Revolution: The Internet of Things makes networked production possible (Since the 21st century )

But what has Industry 4.0 got to do with ERP?

Modern ERP systems must be able to intelligently control the data flows of all company processes: from CRM and merchandise management to manufacturing and logistics to servicing and maintenance. This includes the connection of production plants (MES, MDE, PDA) as well as networking with external systems of customers and suppliers.
Simultaneously, due to these developments and the increasing use of mobile platforms, the traditional evaluation criteria of an ERP system, such as an optimal user interface or a maximum degree of coverage, are increasingly fading into the background in a monolithic system landscape.

Once again, a high level of integration capability through open interfaces and the direct support of a wide variety of platforms and usage concepts (desktop versus mobile devices) is in demand.

Horizontal integration of Industry 4.0:

  • Networking between production sites
  • Integration of the customer into the processes
  • Information exchange throughout the entire value-added process
  • Intelligent system communication for demand, production and logistics

Vertical integration of Industry 4.0:

  • Networking within the company from production to field level
  • IT systems communicate at all levels  

Mastering and using growing amounts of data

The volume of data stored in companies is estimated to have increased more than tenfold in the last five years alone. The challenge for today's IT and ERP systems is therefore no longer so much the procurement of data as its management.

It is about the processing of data into information – to gain knowledge and support decisions, combined with the presentation of decision alternatives.

The effects of Industry 4.0 reinforce this trend. Due to the progressive networking of various components, such as sensors, the data volume to be handled is increasing at a breathtaking pace. Preparing and evaluating this data is a primary task of a central IT system.

It is considered a certainty that data will, in future, will represent a competitive advantage
for companies. A fast, largely automated analysis of existing data is therefore becoming increasingly important, with direct effects on corporate success and strategy. Companies have to decide whether they want to develop the necessary competencies and software solutions in-house or whether they want to purchase them from external partners. In most companies today, existing reporting tools only describe the status quo (descriptive analytics).

Though such tools only provide effective decision support if they, like the FOSS-Information Server, can also predict future developments (predictive analytics) or even provide recommendations (prescriptive analytics). For the latter, companies must first develop the models or formulas that suit them of course – development is still in its infancy in this regard.


Industry 4.0 is slowly but surely coming into our world, and everything indicates that we will be plunged headlong into an intelligent environment where all assets are permanently connected for our benefit. And don’t worry, this connection will be wireless.

Learn more about ERP 4.0 in the automotive industry!

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