28 ISE Magazine | www.iise.org/ISEmagazine
IISE has been sponsoring a Global Performance
Excellence Webinar Series for the past four years.
Most recently we have been doing several miniseries
webinars focused on specic topics: Resilience in
the ’20s, Business Process Management, Integrated
LeanSigma, Operational Analytics and most recently
articial intelligence (AI).
At the completion of each topical miniseries, we have
provided a capstone article in ISE. This feature caps o our
most recent AI miniseries. Our featured panelists – subject
matter expert ISEs and selected Council on Industrial and
Systems Engineering (CISE) members – have provided
most of the food for thought.
The eight important laws of technology (makeuseof.
com/important-tech-laws-explained) are driving the rate
at which integrated digitalization is occurring in products
and services and how industry produces those products
and services. AI is concurrently fueling all the technology
innovation and enabling smart automation. We are
experiencing unprecedented product and service life
cycle shifts, the shrinking of life cycles, increase in the
requirement to bring new features and functionalities to life
faster and better.
So the need to capitalize on smart automation to improve
quality, productivity, reduce costs and waste is what’s
driving the Industry and Service 4.0 migration. Additionally,
new product and service design and development
supported by information technology enablement and
by component technology innovation is concurrently
putting pressure on business process improvement and
management. Process maturity levels are under siege by
the rate of change that is occurring in product and service
life cycles.
We can’t discuss AI outside the context of the larger
trend we call Industry 4.0 and 5.0. The megatrend ISEs
are learning to master and work with and help their
organizations integrate into the way they get things done is
what’s known as Industry 4.0 and 5.0. We’ve borrowed the
image in Figure 1 from the Internet of Things to help make
this point. You can see AI/machine learning (ML) positioned
clearly as a key component of Industry 4.0.
What is AI?
The experts tend to agree that AI “is use of science and
engineering (software or hardware) to create intelligent
machines that can make and/or act on decisions that
I
Industry 4.0/5.0, BPM 4.0/5.0
and AI: Integrated systems
engineering perspectives
Webinar series explores impact of technology innovation
By D. Scott Sink
Photo by Getty Images
December 2023 | ISE Magazine 29
usually require organic intelligence.” My ISE perspective
leads me to conclude that it is “smart automation.”
ChatGPT is perhaps the most talked about example
of the AI evolution at present. But the breadth and depth
of the AI expansion into products, services and how we
create and deliver products and services is much bigger
and broader than that. From a technology perspective,
the image in Figure 2 (Page 30) provides a sense of what’s
involved behind the scenes.
On the front end of this evolution, we all have
experienced the systematic, rapid and steady increase
in use of AI in the world around us. In our Part 3 webinar,
I discussed some practical, personal examples of AI at
work. From point of sales to the coupons we receive each
week from our favorite grocery to Google Maps, to vacation
planning, to pre-emptive preventative maintenance in
the factory or warehouse, to order replenishment, to
automated cruise control and more, AI is creeping into the
very dimension of how we work, play and live our lives.
I recently saw a Home Depot commercial when someone
was laying tile and ran out of spacers. He took a photo of
the spacer, used the retailer’s app, and it told him if it was in
stock, location of closest store and the actual bin location to
nd the spacers.
On the surface, we take this for granted as almost magic
– “Neat, they can do that.” But we all know the engineering,
creativity, innovation and hard work behind the scenes are
what bring those convenience tools to life for us. And it
helps give the company a leg up against the competition.
But not for long – it is not whether you are doing this; it’s
how fast you are doing it.
Industrial and systems engineering is rapidly becoming
best known as integrated systems engineering, and
ISEs are looked upon to make sense of AI, ML and deep
learning and to lead the way as change agents for their
evolving capabilities. This critical new role coupled with our
contributions in operational analytics and business process
optimization is making ISE one of the most demanded
degrees/competency areas for the 2020s.
What is Industry 4.0 and 5.0?
Let’s start rst by focusing on the end game. Some of what
we are experiencing is, as discussed, being driven by the
Figure 1
Industry evolution
The advance toward Industry 4.0. (Source: Designed by Intetics Inc., a global software engineering company,
intetics.com/blog/a-brief-overview-of-industry-4-0.)
Explore the Performance
Excellence webinars
IISE’s on-demand Performance Excellence Webinar
Library at iise.org/PExcellencewebinars includes the
full menu of webinars arranged by topic. It features
the 2023 series for Industry and Service Systems 4.0
at link.iise.org/PEwebinars_service.
30 ISE Magazine | www.iise.org/ISEmagazine
Industry 4.0/5.0, BPM 4.0/5.0 and AI: Integrated systems engineering perspectives
eight laws of technology and the fact that technology
and information enablement have been improving at
unprecedented rates. We are using Industry 4.0 because
we can; it’s the logical application of all this digital
transformation happening.
But businesses don’t just do things because the
technology is there to do it. They do it to grow enterprise
value. They do it to grow the customer base, grow share
of wallet, improve loyalty. In short, they do it to improve
protability. The image in Figure 3 is simply an illustration of
this.
It is useful to discuss AI in the context of what’s called
Industry 4.0 and most recently 5.0. In layman’s language,
Industry 4.0/5.0 is all about the exponential growth in
the automation of processes driven by digitalization and
the rapidly expanding ability to store, move, organize and
process huge amounts of data better and faster (two of the
laws of technology advancement).
There are many portrayals available to study on the
domain of Industry 4.0 and 5.0. Just search online for
Industry 4.0 images and scan through them. The image in
Figure 4 highlights key components of what is happening
in Industry 4.0. The image chosen for 5.0 highlights
developments in Europe on what is being called 5.0. I think
Figure 5 (Page 32) gives you a sense of the focus of things in
this movement called 5.0.
You will perhaps note that Industry 4.0 is primarily
focused on how we create products and services. As we
mentioned, AI is inltrating not just how we create and
deliver products and services but also the products and
services themselves. New product and service life cycles
are a critical component to consider as we understand the
potential for AI.
The integrated innovation from suppliers of smart
technology to the producers of products and services
is well honed, working well and it has driven very rapid
product and service life cycles the past ve to 10 years.
How AI becomes the key driver
in product/service innovation (life cycles)
The integration of smart components, subassemblies and
the integration of how product and service components are
brought together in more ecient fashions is at the heart of
Industry and Service 4.0.
In our Part 3 webinar, I discussed close-to-home
examples, from retail grocers and one-to-one coupons
weekly to automated cruise control in my wife’s car (and
how dierent it is from my 2020 Jeep’s cruise control).
Understanding how AI is around us in our daily lives helps
ISEs internalize the task of helping organizations plan and
execute on the infusion of smart automation of workows.
The end goal is to improve productivity and quality,
Figure 2
The AI impact
Various aspects of machine learning technology.
December 2023 | ISE Magazine 31
reduce lead times and cycle times, improve quality of work
life (augment human thinking and eort in positive ways),
and ultimately to ensure that our organizations can and do
survive these “Roaring ’20s.”
Many product and service life cycles are being
dramatically impacted by the accelerated technology,
digitalization and enablement innovation taking place.
This innovation in features, functionalities, capabilities of
technology and components in systems (products and
services) essentially is shrinking service life. It’s not really
that things are becoming obsolete faster; it’s more planned
or technology-driven obsolescence. Customers have been
conditioned to be attracted to new features, functionalities
and have been willing to pay for those. Providers are
learning how to produce and create these more eciently.
The end result of this process that’s been happening
for many years, but is accelerating, is that it places
pressure on the delivery processes. How do organizations
accommodate, process-wise, this impact of new
technology innovation?
Our focus in this webinar miniseries has been on AI but
also on how it impacts business process improvement and
Figure 3
Tech’s target
Businesses seek to use technology to grow enterprise value.
Figure 4
Elements of innovation
The key components of Industry 4.0 advancements.
32 ISE Magazine | www.iise.org/ISEmagazine
Industry 4.0/5.0, BPM 4.0/5.0 and AI: Integrated systems engineering perspectives
Management 4.0 – how ISEs can tap into the power of AI
smart automation to make processes more agile and more
able to keep pace with the erce competitive landscape
that requires product and service innovation.
The challenge is for ISEs to help organizations
understand how to continue to improve process maturity
levels in the face of constant product and service
innovation. Changes in products and services force
changes in how we create, deliver and support those
improved products and services. I would direct you to our
BPM 4.0 miniseries, Industry and Service 4.0 and BPM 4.0
webinars for more detail at link.iise.org/PEwebinar_business.
CISE perspectives and points of view
In our fourth webinar in this AI miniseries, we assembled
a panel of leaders of the ISE function from CISE to share
their perspectives and points of view on AI. CISE has been
in existence for over 40 years and is aliated and partners
with IISE. It is essentially an anity group of ISE leaders
from a diverse group of industries. We meet twice a year
with between-meeting monthly learning calls. For more
information on CISE, feel to reach out to me.
Our members from GM, Flex, Boeing and UPS are
clearly advanced and advancing very rapidly with ongoing
business process improvement initiatives that increasingly
integrate smart features and functionalities, e.g., integrating
AI. This video, “How is Industry 4.0 driving advanced
manufacturing?” (link.iise.org/industry40_video) provides
an example of what’s happening with most of the larger
organizations in the world (thanks to our Flex member,
Eduardo Toledo, for sharing this).
I came away from the webinar with our CISE subgroup,
and also from ongoing conversations in our calls and
meetings, concluding that the larger organizations are
well down the migration path with Industry 4.0 but are
still challenged by tough decisions that have to be made
relating to technology innovation. The path forward for the
GMs, Boeings and Flexes of the world is laid down, getting
clearer and the pace is picking up. I also concluded that
most organizations, even the big guys, are still struggling
with operational analytics. We’re still swimming in seas of
data and struggling to utilize all the data at our disposal. I
encourage you to tap into IISE’s on-demand webinar library
and view our CISE Panel conversation on AI and Industry
4.0 (iise.org/webinararchive).
Challenges, opportunities for SMEs
integrating AI into Industry 4.0 strategy
There are tremendous pressures to accelerate smart
automation innovation, and to push the right levers
(place the right bets) for continued competitiveness and
protability. The big guys are devoting a lot of resources to
this area for improvement.
Small- and medium-sized enterprises that constitute the
largest percentage of most countries’ economies, however,
do not have the same resources to bring to bear on this
Figure 5
Next generation
How industry advancements are taking hold in Europe.
December 2023 | ISE Magazine 33
migration and evolution. In the U.S., SMEs represent half of
the jobs and 40% of the total gross domestic product (GDP).
That number is much higher in other developed countries.
The focus of our latest webinar on AI and Industry 4.0
and BPM 4.0 featured Jared Frederici outlining a systematic
strategy for building a strategy and plan for a doable
migration path forward. How do we apply AI to products
and services and create the capability to innovate faster
and better with what we oer our customers? How do we
improve our product and service life cycle management
process? How do we, concurrently, improve our design,
development, production, assembly, distribution and
logistics systems and processes so that we are doing order
fullment faster and better? And how do we do all this in
the face of limited resources and most importantly limited
knowledge and skills regarding what to do and how
to do it?
These are the types of questions that most SME leaders
are confronted with on a daily basis.
Jared outlined the migration strategies for process
maturity levels 1-2 to 3, and then 2-3 to 4 (Figure 6). This
tested roadmap is an example of what is needed in SMEs
as they begin to explore how to move in the direction of
increasingly smart automation.
What’s next?
We’ve only just begun: AI, Industry 4.0/5.0, Business
Process Management 4.0, Operational and Organizational
Excellence, the Lighthouse initiative, Operational
Analytics the ISE way, and more. It’s a tremendously
dynamic, exciting, unique time to be an ISE with so many
possibilities.
I’d encourage you to learn more about the Lighthouse
Initiative. Eduardo Toledo, VP of Quality and Operational
Excellence for Flex, introduced CISE to this initiative. A
nice article on “Lighthouses” can be found at link.iise.org/
mckinsey_lighthouses. We plan a webinar dedicated to the
Lighthouse Initiative in the near future.
Our goal with these webinars and with these capstone
articles is to continue to serve our members and
customers of IISE. We can do this by providing cutting
edge, thoughtful, provocative webinars as virtual learning
opportunities on a broad range of timely topics on
Performance Excellence.
D. Scott Sink is a past president of IISE and currently
a member of the Council on Industrial and Systems
Engineering. He served as vice president of business process
improvement for two rms in Toronto, Canada, from 1997-
2007. Before that, he was a professor at Oklahoma State
University and Virginia Tech. From 2007-2020, he led the
Integrated Lean Sigma Certication Program in ISE at The
Ohio State University. He currently is a senior adviser with the
Poirier Group in Toronto.
Figure 6
Roadmap to Industry 4.0
Migration strategies for process maturity levels.
