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When reading about IoT, I often stumble upon the phrase "Industry 4.0". But what is the exact definition of it? Is "Industry 4.0" just a phrase for an IoT application in an industrial environment?

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Industry 4.0 is specific to the industry (power plants, ships, etc) and IoT is used to empower this revolution, but not only. Industry 4.0 also refers to BigData and other modern technologies that could be used to improve the automation, process and analytics (forecast, maintenance). Industry 4.0 has been defined for use of IoT, but it really could exist without IoT. You can gather more information here: Industry 4.0

On the other hand IoT is related to any "thing" not computer, service or person who is connected to Internet. It may be a PLC for irrigation, a refrigerator, or a webcam. More information here: Internet of things

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Industry 4.0—or originally Industrie 4.0—is a subset of the Internet of Things with some industrial stuff added. The term has been coined by a working group which created a high-tech strategy for the German industry sector on demand of the government in 2013.

The complete scope of Industrie 4.0 is described in a 80-something paged document outlining the future of manufacturing. It details the concerted interaction between cyber physical systems, smart factory and the cloud. The essential thought is to have the future product already knowing the way it will be produced and communicating that information to the smart factory as well as collaboration with similar factories.

The report, Recommendations for implementing the strategic initiative INDUSTRIE 4.0, was commissioned by the German Ministry of Education and Research. I linked the English version.

Consequently, Industrie 4.0 should be implemented in an interdisciplinary manner and in close cooperation with the other key areas (see Fig. 2).

...

Figure_2_Industrie4.0

From Recommendations for implementing the strategic initiative INDUSTRIE 4.0, page 19, linked above.

The surrounding text indicates that the colored area is the scope of Industrie 4.0

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Industry 4.0 is the latest trend in manufacturing industries to utilize the power of cloud computing over securely connected devices (IoT) and algorithm controlled mechanical systems.

Is "Industry 4.0" just a phrase for an IoT application in an industrial environment?

No, it is not a phrase. Industry 4.0 includes not just things it also includes cloud computing and cyber physical systems.

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Industry 4.0 is the same that the Industrial Internet of Things (IIoT), a branch of the Internet of Things, which is dedicated to improve the industry using sensors, actuators, and Smart Objects.

As Rakesh_K has said previously, the term has been created by the German Ministry of Education and Research. However, it needs a clarification, because the origin of the Internet of Things was to improve the Industry as the creator of this term, Kevin Ashton, explains in this article, exactly to improve the supply chains.

I made at Procter & Gamble (P&G) in 1999. Linking the new idea of RFID in P&G's supply chain to the then-red-hot topic of the Internet was more than just a good way to get executive attention

The fact that I was probably the first person to say "Internet of Things" doesn't give me any right to control how others use the phrase.

You can read more about the IIoT in this survey,

Using IoT in the healthcare service industry, for safer mining production, in transportation and logistics, or in firefighting.

or here if you want to read about the logistic with RFID and the use of RFID in supply chains..

IOT can affect the whole supply chain. Firstly it can optimize the supply chain management; secondly it can make sources to be used effectively; thirdly it can make the whole supply chain to be visible so that it can improve the information of supply chain transparency; fourthly the supply chain can be managed in real time; the lastly it can make the supply chain high agility and complete integration.

IOT affects the supply chain management in manufacturing link, warehousing link, transportation link and selling link. It makes enterprises even all the whole supply change response to the varied market quickly so that the adaptability of the supply chain to market verification changes is improved.

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