Recently, the German "Industry 4.0" initiative gained momentum, and sketches a vision for future production industries. This chapter reviews industrial challenges in the area of "Industry 4.0". The findings are structured along the fundamental understanding of production companies as socio-technical systems. Socio-technical systems consist of three important aspects-(i) human, (ii) organizational structures and technology-and, most importantly their mutual relations, and thus, the interdependencies of these aspects. The review reveals that humans need to remain a vital element of future production and need to drive organizational development efforts and continuous workplace improvement. Organizational structures are challenged by changing business models of production companies. Enabling organizational change requires an open organizational culture (e.g., in terms of digital readiness), learning support and digital literacy of all involved stakeholders. In order to create value from Industry 4.0 developments, still technical challenges, in particular vertical and horizontal process integration need be resolved.
IntroductionToday's industry needs to survive in a volatile environment. Changing customer demands, high degree of product individualization, increasing digitalization and system integration, effective and efficient manufacturing operations to meet high quality at low cost, well-being of employees, etc., are just some factors that challenge daily work in industry. In general, an industry refers to the production of certain goods or services within an economy (e.g., automotive industry in Germany). Different Industry classification systems like the ISIC (2008), NAICS (2012) or NACE exist that organize companies with respect to production processes or similar products. (cf. https://en.wikipedia.org/wiki/Industry_classification). According to the NAICS (2012) Manufacturing "comprises establishments primarily engaged in the chemical, mechanical or physical transformation of materials or substances into new products. These products may be finished, in the sense that they are ready to be used or consumed, or semi-finished, in the sense of becoming a raw material for an establishment to use in further manufacturing. Related activities, such as the assembly of the component parts of manufactured goods; the blending of materials; and the finishing of manufactured products by dyeing, heat-treating, plating and similar operations are also treated as manufacturing activities. Manufacturing establishments are known by a variety of trade designations, such as plants, factories or mills". Compared to the definition of manufacturing, the understanding of "Production" is more generic in terms of any conversion from input to output. This also includes intangible products like the delivery of services in areas as government and health care or even knowledge production.In this book, production companies are understood as complex, socio-technical systems of people, processes and machines that flexibly interact within ...