Industry 4.0 and strategic planning
Industry 4.0 is here. Like it or not, it’ll change manufacturing, as surely as machines and steam engines changed industry in days gone by.
This page outlines what it means for you and tells you how you can successfully transition your business.

Business strategy is your compass
A strategy creates a shared sense of your mission. It points you in the right direction, like a compass, and helps everyone in the business understand what you’re working towards. It can help you:
- prioritise, stay focused and make good decisions
- make the most of your resources
- explain your business to others
- say “no” to distractions.
A good strategy can be the difference between surviving and thriving. And the right strategy can help you transition to Industry 4.0 successfully.
Read an introduction to business strategy — business.govt.nz
What’s Industry 4.0
Industry 4.0 is the future – not a fad or a passing trend. Sometimes it’s called digital transformation or big data. But whatever you call it, Industry 4.0 is all about using data to make informed decisions.
Data can help you take your business to the next level. Having data means you can use things like:
- business intelligence – software that analyses data so you can make smart decisions
- machine learning – computer systems that learn patterns and make predictions
- artificial intelligence (AI) – computer systems that do “human” things, like identify objects and make decisions.
But how do you get that data? And how do you make sure it’s accurate? Knowing where to start – and how – can be tricky. Luckily, Callaghan Innovation, the country’s innovation agency, offers support and resources.
Callaghan Innovation is winding down, and its website is under review. Links may change at short notice.
Get a Smart Factory Assessment: Industry 4.0 — Callaghan Innovation
Watch: An introduction to Industry 4.0 for manufacturers
transcription
Video transcript: An introduction to Industry 4.0 for manufacturers
[Video begins. A mid-shot of a man in a black suit jacket with a patterned blue button up seen underneath. The man stands in a factory, blurred out behind him. He speaks directly to the camera.]
Speaker: Kia ora to everyone making great things here in Aotearoa, New Zealand. Manufacturing is one of our largest sectors covering everything from homebased Crafts People to midsized engineering shops, and to Fonterra’s largest milk and cheese factories.
[The words ‘Industry 4.0’ show up in white lettering to the left of the speaker as he says the words.]
Speaker: In this video we're talking about Industry 4.0 and why kiwi manufacturers are embracing new technology.
[The screen changes to a wide shot of a man wearing a tech suit along with high-visibility gear and a hard hat lifts a barrel on a construction site. A man to his left holds a tablet which he is writing notes on. This second man is dressed fully in high-visibility gear with a hard-hat on.]
[The screen changes again to a mid-shot of a woman wearing high-visibility gear and a hard hat is tapping the air out in front of herself. She has a VR headset on.]
[The screen changes again to an over the shoulder shot of a man looking at a tablet, sat on a bench in front of him. There is also another man in the background, only slightly visible and not in focus. The man looking at the tablet taps the screen with an e-pen, causing the image of a desk on the screen to change and spread into all its individual parts.]
[The screen changes again to show two men, standing beside a hologram of a car split into various parts. An engine twists into visibility within the hologram and the men look closely at it as the speak to each other.]
Speaker: Industry 4.0 stands for the fourth Industrial Revolution and it's all about the integration of digital technologies into every aspect of manufacturing.
[The screen reverts to the mid-shot of the speaker.]
Speaker: Don't get me wrong it's not about saying goodbye to all your existing manufacturing processes, but rather introducing technology that increases production through better monitoring and control - allowing you and your team to get things done more efficiently.
[The screen changes to a long shot of a factory with various machines. Two workers move about within this space. The visuals then change to show a machine through a pane of glass with a part of the machine moving about, effecting other areas of the machine. A red light flashes every time the moving part stops briefly. The visuals change again to a sweeping shot of a man using a desktop against a wall within a factory. The screen changes again to another machine. This is a close shot. The camera closes in on a flat compartment of the machine, to show a moving part within this flat compartment. The screen changes again to an over-the-shoulder shot of a woman using two desktop screens beside one another. There are sticky notes on the desktop, and it appears she is looking at a spreadsheet on one screen and alternative software on the other. The screen then closes in on the alternative data software on her second screen as she interacts with it using her mouse.]
Speaker: Industry 4.0 isn't just about innovation but driving profitability and building long-term value for your business. There are many areas that Industry 4.0 can help. For many manufacturers the first step has been to move away from spreadsheets and use data to make smarter decisions in real time using things like dashboards and notifications.
[The screen reverts to the mid-shot of the speaker.]
Speaker: Can you imagine your factory where sensors and machines communicate with each other?
[The screen changes to a high angle shot of a man working on a bulky factory computer. It then changes to a screen with the inside of a machine and information about the model of the machine on it. The screen then changes to a high angle wide shot of a factory floor with five workers moving about on the floor. The screen changes to a closer shot of one of the workers as he focuses on his work. The screen changes again to a sweeping shot of a worker interacting with a machine’s controls. He wears scrubs and gloves.]
Speaker: Predicting inventory requirements and maintenance needs before they arise, reducing downtime and saving costs. Just picture your workers with digital tools, receiving instant instructions and training, leading to improved safety and higher skill levels.
[The screen reverts to the mid-shot of the speaker.]
Speaker: Despite the advantages industry reports continue to tell a sad story on how New Zealand manufacturing is lagging behind the rest of the world. So, we have to act soon so we're not left behind even further. The good news is there are already pioneers among us, reaping the benefits from technology and it may not be as expensive or as hard to introduce into your business as you think.
[Screen changes to a sweeping wide shot of a factory with two workers interacting with the machines within this factory. It changes again showing a cobot interacting with wire and metal. It drags pink wire a metal clamp. The visuals sped up as the cobot then takes the same wire to a different machine and interacts with it before taking the wire to a third machine and interacts with it. It zooms back out to show the cobot dropping the wire.
Speaker: Take for example Nortech Electronics in East Tamaki. By integrating cobots to their assembly line they've slashed production times all while reducing worker fatigue and maintaining top-notch quality.
[The screen changes to a shot of a stack of tortillas on a conveyor belt. The tortillas travel underneath a large metal scanner above them as they are moved by the conveyor belt offscreen. A new set of piles of tortillas begin to move into the screen. The screen then changes to a screen showing the tortillas being processed by a scanner. Good tortillas have green squares pop up over them and bad tortillas have red squares pop up over them, as they move through the conveyor belt and are scanned. The screen then changes to a shot of an arm holding out a tablet. One the tablet shows a data set – reviewing the performance of productivity.]
Speaker: Or Breadcraft in Masterton, who, with the help of IOT devices have optimised their operation - reducing waste and saving costs.
[The screen then changes to an over the shoulder shot of a man looking at a laptop as an animation of a 3D scan occurs. The camera backs out to show the rest of the factory this person is working in, along with two of his coworkers. The screen then changes to a mid-shot of the same man using a machine. The machine has a large screen and a keyboard with a chunky yellow and black body. It is unclear what the machine’s purpose is. The screen then changes to a wider shot of the man using this machine. It shows that the machine has 11 shelves within itself, and another coworker is working in the background. The shot then changes to a sweeping shot of a man in a factory working on a laptop. The screen then changes again to a man wearing earmuffs observing a metallic cabinet with two glass doors. Within this cabinet is water pressure being used to cut or mould a slab of metal.]
Speaker: And then there are manufacturers that have embraced digital twins. By creating virtual replicas or digital copies of their factories they can predict maintenance needs preventing costly breakdowns and improve health and safety.
[Screen reverts to mid-shot of the speaker.]
Speaker: These are just a few of the examples of how Industry 4.0 technologies are already making waves in New Zealand. This revolution isn't just for the industry giants, it's reshaping businesses of all sizes.
[Screen changes to a high angle, establishing shot of a factory. It shows three men looking within a crate which seems to have machinery within it. Screen changes to a mid-shot of a man sitting at a work desk with four desktop screens in front of him. He types on his keyboard. The screen changes again to a mid-shot of a man sitting on an office chair. He watches as a machine interacts with a metallic structure – made up of a cube with rings on top of it. The screen changes again to show a man walk around a podium screen before he interacts with it.]
Speaker: Staying ahead means embracing these technologies, understanding their potential, and leveraging them to improve your operations.
[Screen reverts to the mid-shot of the speaker.]
Speaker: The opportunities are endless and now is the time for your business to get in on the action.
[Screen changes to the EMA website home page. It scrolls through this for a few seconds.]
Speaker: Visit the EMA website for manufacturing case studies and webinars. Learn from experts and local businesses to make your business more resilient and profitable.
[Screen reverts to the mid-shot of the speaker. A white oval appears on the bottom left of the screen. It has a small globe graphic on the left of the oval and the text “industry4.ema.co.nz” beside it in navy blue font.]
Speaker: Go to industry4.ema.co.nz
[Screen changes to a blue background with white text reading “Thanks to BECA for their technical advice”; next line: “EMA”; next line “For more information on Manufacturing industry ema.co.nz”. Music swells.]
[Video ends.]
Key ingredients to get ready for 4.0
Ready for Industry 4.0? Cool. But here’s a tip: steer clear of the common mistakes.
- Be realistic – don’t bite off more than you can chew.
- Focus on maximising value – don’t get sidetracked.
- Make time to transform – don’t put it off for another day.
Here’s another tip: take time to create a solid plan. You’ll need three key ingredients for that plan to succeed, according to Advanced Manufacturing Aotearoa:
- Think far ahead – prioritise long-term goals over today’s issues. This helps you focus more on innovation than taking small steps or tinkering around the edges.
- Get wins when you can – make changes that bring in cash early, so you have money you can reinvest to speed up your transition and stay on track.
- Gather what you need – get the people, tech and money you’ll need to support your transformation and keep up the momentum.
Ten steps for a strategic plan
If digital transformation sounds scary, take heart. Follow these ten steps to develop a well-structured strategic plan that gets you the best from digital technologies. A structured approach means you manage risks, make the most from your investment and succeed in the long-term.
Figuring out your strategic plan can take some time. Don’t be shy in working with a business advisor. They can help!
How business advisors can help — business.govt.nz
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1. Check if you’re digitally ready
Aim to:
Find out where your business is at with digital technology.
How to:
- Assess your readiness in technology, processes and people by using a framework like the Smart Industry Readiness Index (SIRI).
- Identify gaps in your systems, processes and skills.
- Benchmark your business against industry peers so you know how and where you stand.
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2. Define a clear vision and goals
Aim to:
Develop a vision and measurable goals for your transformation.
How to:
- Get your leadership and key stakeholders to come up with a vision of digital modernisation. What would your company be like if it had a digital makeover – if it were using technology to create, analyse and store information and improve processes?
- Identify your key business goals, like boosting productivity, reducing costs, increasing customer satisfaction or improving flexibility in manufacturing.
- Set measurable goals and clear timelines. Maybe you want to make 20% more widgets in three years or prototype a robot within two years.
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3. Form a team to champion the project
Aim to:
Gather a diverse team to drive your transformation.
How to:
- Appoint a digital modernisation leader for the project.
- Gather a team from IT, operations, production, people and culture, and finance.
- Hire consultants or technology partners to provide expertise in specific Industry 4.0 areas, if necessary, perhaps areas like AI, the Internet of Things (IoT) or automation.
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4. Assess and prioritise digital technologies
Aim to:
Figure out which Industry 4.0 technologies will make the biggest difference to your business.
How to:
- Identify the key processes and challenges in your manufacturing operations.
- Learn about different technologies, like IoT, robotics, AI, cloud computing and cyber-physical systems (systems that combine the physical and computer processes).
- Prioritise technologies to invest in, based on their potential to meet your goals. Focus on quick wins (like predictive maintenance) while planning for longer-term innovations (like virtual models).
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5. Develop a detailed implementation plan
Aim to:
Draw up a timeline, and list the actions and resources you’ll need to make your transformation dream a reality.
How to:
- Break down your plan into phases. For example, you could start by upgrading your infrastructure, then trialling new technology in a small area, and finally rolling things out fully.
- Create timelines and budgets for each phase. Assign responsibilities too.
- Set milestones and key performance indicators so you can track progress at each stage.
- Keep your plan flexible enough to adopt lessons you learn along the way.
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6. Review and upgrade Information technology (IT) infrastructure
Aim to:
Check that your IT infrastructure can support Industry 4.0 technologies.
How to:
- Take stock of your IT equipment, including hardware, software, networks and data management systems.
- Identify gaps and possible barriers. For example, do you have enough data storage and suitable real-time connectivity? What cybersecurity weaknesses might you have?
- Upgrade to protect your data. Perhaps you want to move to cloud computing. Or you may have to upgrade to IoT devices, 5G connectivity or a more robust cybersecurity framework.
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7. Train staff
Aim to:
Give your team the skills they need to thrive in the new environment.
How to:
- Work out what they need to know to use the new technologies, and identify any gaps.
- Develop training programmes as needed. Cover IoT, data analytics, AI, and automation systems.
- Use change management steps to get your team on board with the transformation.
- Create a culture of continual learning so you stay ahead of technological changes.
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8. Trial new solutions
Aim to:
Run pilot projects to test the effectiveness of Industry 4.0 solutions before your full-scale rollout.
How to:
- Trial your new solutions in a specific area, such as automating just one production line or introducing predictive maintenance on key equipment.
- Check if your new solution worked as intended, and see how you could introduce it better.
- Work out any changes you need to make, running more trials if needed, before rolling out your solution across the business.
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9. Look after your data and cybersecurity well
Aim to:
Protect your digital assets and make sure you follow the rules about data.
How to:
- Develop a comprehensive policy on data governance that spells out how you collect, store and use data.
- Introduce cybersecurity protocols to protect your business and data from threats like data breaches, hacks and ransomware.
- Regularly audit your cybersecurity and train staff to minimise risks.
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10. Monitor progress and keep improving
Aim to:
Keep an eye on your transformation and tweak what you need to align with your strategic goals.
How to:
- Set up a system to monitor KPIs, like production efficiency, downtime, energy use and cost savings.
- Review data to see if the transformation is working as intended.
- Use insights from digital tools and analytics to keep improving processes.
- Keep up with new Industry 4.0 technologies and innovations, and adjust your strategy to remain competitive.
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