=Paper=
{{Paper
|id=Vol-3665/paper4
|storemode=property
|title=Digitalizing Production and Industry through 4.0 Technologies Implementation
|pdfUrl=https://ceur-ws.org/Vol-3665/paper4.pdf
|volume=Vol-3665
|authors=Nataliia Kraus,Kateryna Kraus,Svitlana Shevchenko,Volodymyr Proshkin
|dblpUrl=https://dblp.org/rec/conf/decat/KrausKSP24
}}
==Digitalizing Production and Industry through 4.0 Technologies Implementation==
https://ceur-ws.org/Vol-3665/paper4.pdf
Digitalizing Production and Industry
through 4.0 Technologies Implementation
Nataliia Kraus1, Kateryna Kraus1, Svitlana Shevchenko2, and Volodymyr Proshkin2, 3
1 European Association of Economists, 3 Grigoriya Vaschenko str., Kyiv, 02140, Ukraine
2 Borys Grinchenko Kyiv Metropolitan University, 18/2 Bulvarno-Kudriavska str., Kyiv, 04053, Ukraine
2 Loughborough University, Department of Mathematics Education, Loughborough, Epinal Way, Loughborough,
Leicestershire LE11 3TU, Great Britain
Abstract
The authors presented the main aspects of digitization of production and industry using
4.0 technologies and based on the existing Industry 4.0 base. The opinion is expressed
that the implementation of digital technologies is one of the main factors in the growth of
the competitiveness of the enterprise and corporation in the conditions of global
challenges and European integration processes in Ukraine. The world’s most popular 4.0
technologies for the field of mechanical engineering are presented, namely: product life
cycle management, predictive analytics (service) based on data processing; augmented
and virtual reality, vertical and horizontal integration of machines using OPS UA,
Production Management Systems (MES), smart devices and mobile applications, cloud
platforms and services, etc. According to the research results, Industry 4.0 changes
people’s lives beyond recognition. Shortly, this will be the most global transformation in
human history. And those countries that want to have high competitiveness and an
efficient production system in the future should take part in it. This transformation will
lead to a change in economic relations and customer needs, the way of production.
Therefore, domestic production needs to take an active part in the global trend of
development to occupy an important place in the world markets of high-tech products.
The paper reveals the content of promising models of economic development and future
markets according to UN expectations. As a result of the observation, the authors
concluded that Ukrainian enterprises have underinvested in classic (3.0)
technologies for years. The level of basic automation of ACSTP-IT does not exceed
50%, while Western countries, China, and Asia have mostly passed it. The authors
expressed the opinion that there is no clarity on the priorities of digital technologies
and the corresponding investments. There have been dozens of traditional 3.0
technologies for a long time, and newer ones belonging to the 4.0 generation are
constantly being added to them today. As part of the topic of the article, it is stated
that classic technologies (3.0+) should be considered robots, ERP, MES/APS/APC,
SCADA/HMI, authorization, accounting/dispatching, data storage, mobile
technologies, industrial networks, cloud computing. New 4.0 technologies are called
IoT platforms, smart sensors, etc.
Keywords 1
Digitalization of production, technologies 4.0, Industry 4.0, digitalization of corporation,
digitalization of industry, cooperation, smart production, digitalization of the region,
European integration of Ukraine.
DECaT’2024: Digital Economy Concepts and Technologies, April 4, 2024, Kyiv, Ukraine
EMAIL: n.kraus@kubg.edu.ua (N. Kraus); k.kraus@kubg.edu.ua (K. Kraus); s.shevchenko@kubg.edu.ua (S. Shevchenko);
v.proshkin@kubg.edu.ua (V. Proshkin)
ORCID: 0000-0001-8610-3980 (N. Kraus); 0000-0003-4910-8330 (K. Kraus); 0000-0002-9736-8623 (S. Shevchenko);
0000-0002-9785-0612 (V. Proshkin)
©️ 2024 Copyright for this paper by its authors.
Use permitted under Creative Commons License Attribution 4.0 International (CC BY 4.0).
CEUR Workshop Proceedings (CEUR-WS.org)
CEUR
ceur-ws.org
Workshop ISSN 1613-0073
Proceedings
36
1. Introduction analysis of positive and negative changes that
this Industry 4.0 brings for companies, remain
Thanks to the formation of the digital economy, insufficiently disclosed. In particular, a
small and medium-sized businesses have significant number of questions such as: What
received an unattainable opportunity to be is generally practiced already at Ukrainian
global and have an increasingly significant enterprises? Can this be called a real way of
impact on the world economy. This trend digital transformation of production and
opens up new prospects for the development industry? Why are old problems not solved,
of Ukrainian small and medium-sized and new ones are added in terms of the
businesses. After all, Ukrainian companies can digitalization of the economy using 4.0
integrate into international networks of added technologies?
value, which some of them are already
successfully implementing. This is the way to 2.2. Formulation of Goals of the
increase exports and production of products Article
with greater added value [1–4].
Are enterprises ready to create such The purpose of the article is to study the
strategic development tools? When they come digitization of enterprises based on Industry
out, is it possible to launch them at the industry 4.0 in the conditions of martial law and the
level? Who will be the first in this? Answers to rapprochement of Ukraine with the European
these and other questions must be actively Union. Development of practical
sought because it is speed, flexibility, and recommendations and instructions in terms of
timeliness that will depend on the speeding up the digitalization of production
competitiveness of domestic products and and industry in Ukraine. Presentation of the
services on the world market. determinants of the qualitative step-by-step
digitalization by business entities. Elucidation
2. Formulation of the Problem of the content and features of prospective
2.1. Analysis of Recent Research models of economic development and future
markets according to UN expectations. The
and Publications, Which justification of the main principles on which
Initiated the Solution of this the positive quality of functioning of digitized
Problem and on Which the productions and industrial facilities is based
Author Replies and the clarification of the most popular 4.0
technologies in the world for the field of
mechanical engineering.
Scientific works and practical research and
development of such well-known scientists
and inventors as V. Isaacson, S. Brand, J. Vales, 3. Presentation of the Main
B. Elbrecht, J. Licklider, J. Von Neumann, E. Material of the Study with a Full
Peters, E. Reinert. Ukrainian scientists and Justification of the Obtained
economists are also actively involved in the
creation of the conceptual apparatus of the Scientific Results
institutional palette of “Industry 4.0” system 3.1. The Role of Industry 4.0 in the
research. Among them are the names of Digitalization of the Country’s
V. Geits, V. Halasiuk, I. Guzhva, O. Holoborodko,
O. Zhmerenetskyi, O. Zerniuk, S. Ilyashenko, M.
Economy and Increasing its
Kuzmuk, K. Kraus, N. Kraus, O. Kryvoruchko, A. Competitiveness on the
Maksyuta, O. Marchenko, O. Manzhura, T. World Stage
Ostrikova, V. Osetskyi, Yu. Pyvovarov, Yu.
Radzikhovska, O. Shtepa, O. Yurchak. The term “digital transformation” (TC)
But, at the same time, a significant number appeared in the world back in the 2000’s. In
of problems regarding the vision of digitization 2011, from the submission of GapGemini
of production and industry using 4.0 Consulting and other consulting companies,
technologies at domestic enterprises, the the term received a powerful conceptual base,
37
which explains how digitalization can radically their enterprises, took part in the survey. The
change business performance. In 2014, the role of digital technologies is one of the main
term Industry 4.0—the next stage of digital factors in the growth of competitiveness.
transformation in the industry—was widely The fact that 4.0 technologies are among the
heard at the Hannover Exhibition, and in 2015 priority factors of competitiveness has long
Klaus Schwab’s bestseller “The 4th Industrial been recognized in developed countries, and in
Revolution” was published. In 2016, the IT and general, still very little in Ukraine. According to
industrial automation associations joined McKinsey data in 2016, more than 80% of the
forces in Ukraine to create the “Industry 4.0 in heads of industrial enterprises believe that
Ukraine” movement. technologies 4.0 will fundamentally change the
Since then, attempts to understand the state landscape of industries in the next 5–10 years.
of digitalization in various sectors of industry, In particular, 30% of them are already
in cities and their urbanism, and the possibility investing in these technologies. According to
of accelerating this development have been the early data of APPAU in 2016–2017 (before
traced in Ukraine. The mechanical engineering the 2018 survey), >90% of Ukrainian
sector is the driver for the development of the managers simply do not understand “what it
entire industry in the era of 4.0. After all, smart is.” Accordingly, it was never about “faith”, and
machines are the basis of intelligent even more so about “investment” [5]. The
production. But this is not the only reason why general effect of technologies 4.0 for industry,
nowadays the focus is on mechanical the big four of the world’s largest consulting
engineering. The dramatic drop in the volume companies talk about revolutionary changes in
of this industry after 2014 in Ukraine called the world’s economies thanks to digitalization.
into question the very existence of the The Ukrainian Digital Agenda Ukraine
industry—on the scale and boundaries that program gives average indicators of
have more or less been maintained since 1991. contribution to growth at the level of 20–25%.
In addition to the traditional explanation The European association Orgalime especially
about the loss of the CIS markets, the emphasizes and emphasizes the role of
development of exports to other markets, as Industrial Engineering in mechanical
well as domestic competition, raised the engineering—“The primary focus of
question of the competitiveness of Ukrainian digitalization should be on those who start it
manufacturers. And among the factors of (enablers)—these are the engineering
competitiveness, there is a special interest in industries”. Industrial engineering is machine-
those that are directly affected by device and other construction, complex
digitalization. The results of a survey of the engineering and system integration, technology
mechanical engineering industry conducted by design, industry-oriented R&D centers, etc. The
the APPU [5] are somewhat controversial. position of the Ukrainian movement 4.0 about
On the one hand, respondents show a good mechanical engineering. The national
awareness of Industry 4.0 trends, and movement “Industry 4.0 in Ukraine” puts
recognize Ukraine’s lagging but also believe in engineering and mechanical engineering
the significant impact of digital transformation sectors as a priority—the focus of national and
on the competitiveness of their enterprises in state economic development programs should
the future. On the other hand, the interviewed be on these sectors:
experts from the market speak of excessive 1. The processing industry (3rd level)
optimism and the “advancedness” of these consumes ready-made technologies—lines,
results. For example, one can only be happy machines, technological complexes, devices,
that 78% have digital transformation goals and etc. These products are manufactured in the
55% are implementing digital programs. Engineering & OEM category. If there are no
However, it was not possible to get more local ones, imports will increase.
specific information on these goals and 2. The main technological innovators in
programs. Certain contradictions in the results digitization come from another category—
can be explained by the fact that those who are developers, system integrators, and IT
already approaching the implementation of 4.0 vendors. The speed and power with which they
but may not yet be sufficiently confident in the affect categories (food and processing,
integrity and integration of these strategies in metallurgy, energy, oil and gas,
38
pharmaceuticals, building materials, urban 3. Another report of the same agency was
infrastructure) is decisive for digital specified for tasks of network interaction of
transformation. Industries such as mechanics, machines, both vertically and horizontally of
electronics, and electrical engineering are the enterprise. As you know, easy network
rapidly degrading in Ukraine because the interaction of people, machines, and systems is
conditions for development have not been the cornerstone of Industry 4.0. The results
created for them [6, p. 1888; 6, p. 144, 189, show a great awareness of machine builders
255]. Accordingly, the main challenges in with both network interaction technologies
Ukraine are: and a purposeful movement in the direction of
• For industrial end-users and engineering horizontal and vertical integration.
industries—to change the focus and 4. Hampleton analysts provide a rather
understanding of key business drivers: extensive report showing the interest of large
from only cost—to those that are companies in acquisitions and purchases of
important in the global world (business technological representatives in the field of
drivers)—quality, time to market, mechanical engineering. The most revealing
productivity, and customer experience. here is the acquisition of the robotics leader
• For technological innovators: change the Kuka by the Chinese Midea. There are dozens
attitude of the categories of mechanical of similar reports and testimonies of
engineering and 4.0 innovators to digital digitization strategies of European and global
technologies—instead of being an machine builders in the world today [5].
“appendage” to machines, they should Recognizing the primacy of large companies
become the main ones in creating added in digitalization processes, commitment to the
value. course of digital transformation and Industry
There are many studies on the influence of 4.0 is expressed, in particular by market
digital technologies on the state of mechanical participants—global vendors, integrators,
engineering today: business associations, consulting companies,
1. The McKinsey report “How to Success: and even the government. There are many
Strategic Options for European Machinery” reasons for highlighting the trend “large
refers to a survey of more than 240 machine- companies are the driver of digital
building companies and focuses on strategic transformation”. DTEK, Ukrzaliznytsia,
changes in 3 areas: Metinvest, Interpipe, KB “Pivdenny”, FED,
• Change in growth patterns—both in the subsidiaries of JSC “Naftogaz”, Kernel, MHP,
geography of presence (including areas and many others have openly declared their
of profit growth) and also in the commitment to the course of digitization of
management of value creation chains. enterprises. All the aforementioned companies
Regarding the latter, the shift from are seriously investing in new technologies,
products to services is a definite trend. and some of them have launched their
Next, we see the growth of digital corporate accelerators. The trend of corporate
services. innovation is also fueled by several IT
• Increasing rates of digitization—and incubators that seek to involve the IT industry
calls into question the durability of and the startup community in the
existing business models [7, p. 722]. transformation processes of our enterprises.
• Acceleration of organizational
changes—which are necessary for the 3.2. Types of Innovative Solutions
implementation of the above two in the Economy
directions of growth.
2. Back in 2016, Quest Trend Magazine
Despite all the positives of this trend, it is not
determined in a survey of more than 150
difficult to see some distortions or “punctures”
machine builders that 66% of them are already
typical for this early stage of evolution. It
on the way to Industry 4.0, and another 28%
makes sense to consider them in the 3 most
are planning these changes. Only 6% of
typical categories of approaches to innovation:
respondents said that they do not plan any
1. Traditional, rigid selection through
movement in this direction.
tendering. This is the classic and most common
39
method of selecting contractors for certain For simultaneously implemented investment
works. For state-owned enterprises, e- costs (ICo), this index (IDo) is determined by the
tendering through the Prozorro system, where formula:
the bid price is the main criterion, is also a ∑𝑛
𝑁𝐶𝐹𝑡
mandatory selection condition. 𝐼𝐷𝑜 =
𝑡=1 (1+𝑖)𝑡
, (2)
𝐼𝐶𝑜
The most telling here is the tender of
Ukrzagvydobuvannya (UZD) for the where IDo is an index (coefficient) of
monitoring of wells for gas production, where profitability for simultaneous investment
the American Honeywell won with the sum of costs, NCFt is the amount of net cash flow for
more than 10 million dollars. This is a rather separate intervals of the general period of
complex and large-scale project, in which USD operation of the investment project, and ICo is
managers managed to correctly conduct pre- the amount of simultaneous investment costs
qualifications, as a result of which the most for the implementation of the investment
qualified contractors made it to the tender project.
finals. Moreover, the bidding price in the final If the investment costs associated with the
fell by half. The challenges of digital future implementation of the investment
transformation are generally a positive project are carried out in several stages (ICt),
moment for the oil and gas industry, which is the calculation of the index (coefficient) of
rapidly catching up with the modernization profitability (IDi) is calculated according to the
opportunities lost in previous years in terms of formula:
𝑁𝐶𝐹𝑡
investments. However, in terms of digital ∑𝑛
𝑡=1(1+𝑖)𝑡
transformation, this project does not address 𝐼𝐷𝑏 = 𝐼𝐶𝑡 , (3)
∑𝑛
𝑡=1(1+𝑖)𝑡
many other challenges facing such state-
owned companies: The index (coefficient) of profitability (IPi)
• Ukrainian contractors or manufacturers of the investment project can be used as an
are not visible at all—in this way, state auxiliary evaluation parameter because it does
companies increase the import not allow to evaluation of the entire return
component. flow for the project. This index is calculated
• According to the available information, according to the formula:
𝑁𝐼𝑃𝑖
the technologies that will be used by 𝐼𝑃𝑖 = , (4)
𝐼𝐶
Honeywell belong to classic 3.0 rather
than innovative ones. In particular, the where NIPi is the average annual amount of net
project does not yet solve typical 4.0 investment profit during the period of
tasks of this scale, such as the creation of operation of the project, and IC is the amount
IoT platforms. Although it was probably of investment costs for the implementation of
a chance—we are talking about a huge the investment project.
distributed system of remote monitoring The payback period is one of the most
and control. widespread and understandable indicators of
If the investment costs (ICt) associated with the assessment of an investment project.
the implementation of the investment project Calculation of this indicator can be performed
are carried out in several stages, the by two methods:
calculation of the current net reduced income • Statistical (accounting)
is calculated according to the formula: • Discount.
𝑁𝐶𝐹 𝐼𝐶 The undiscounted (statistical) payback
𝑁𝑅𝐼𝑏 = ∑𝑛𝑡=1 (1+𝑖)𝑡𝑡 − ∑𝑛𝑡=1 (1+𝑖) 𝑡,
𝑡
(1) period (PPn), determined by the statistical
where NRIb is the amount of net reduced method, is calculated by the formula:
𝐼𝐶
income for an investment project with multiple 𝑃𝑃𝑛 = , (5)
𝑁𝐶𝐹𝑝
implementations of investment costs (ICt),
NCFt is the amount of net cash flow for separate where ІC is the amount of investment costs for
intervals of the general period of operation of project implementation, and NCFp is the
the investment project, i is the discount rate average annual amount of net cash flow during
used, n is the number of intervals in the total the period of project operation (for short-term
calculation period t. real investments (up to 1 year) this indicator is
calculated as a monthly average).
40
The discounted payback period (PPd) is transformation according to the stages of
determined by the formula: maturity of the customer.
𝐼𝐶𝑜 Challenges to digital transformation are,
𝑃𝑃𝑑 = ,
∑𝑛
𝑡=1
𝑁𝐶𝐹𝑡
(1+𝑖)𝑡
(6) first of all, dependence on one large contractor,
𝑡 whose range of competencies is a priori
where PPd is the discounted payback period of limited. Without synergy and integration, it is
simultaneous investment costs for the project, impossible to talk about real and deep
ICo is the number of simultaneous investment integration processes of the enterprise—
costs for project implementation, NCFt is the especially vertically, from sensors to ERP.
amount of net cash flow at separate intervals of Therefore, in 2018, IT-Enterprise made
the total period of operation of the investment attempts to create its technological ecosystem
project, i is the discount rate used, n is several and invited other ACS integrators to its ranks.
intervals (years, months) in the total 3. Focus on innovators through corporate
calculation period t, t is the total estimated accelerators. The leaders of investments in this
period of operation of the project (years, approach in 2018 were DTEK and
months). Ukrzaliznytsia. The essence of accelerators is
The Internal Rate of Return (IRR) is the to collect the best offers from the market
most difficult (to calculate) indicator of the according to predefined needs (cases), with the
effectiveness of real investment projects. It signing of contracts with finalist companies.
characterizes the level of profitability of a The most qualitatively such technique was
specific investment project, which is expressed developed at DTEK. Together with RadarTech
by the discount rate of cash flow, and is (the organizer of the accelerator), DTEK
reduced to the current value of monetary “filtered” more than 400 companies, including
investment costs. not only startups but also mature companies.
The internal rate of return (IRR) = the
discount rate (i), at which the NRI = 0. 3.3. Prospective Models of
That is, IRR calculations are carried out
according to the formula:
Economic Development and
𝑛
𝑁𝐶𝐹𝑡
Future Markets
∑
(1 + 𝑉𝑆𝐷)
= 0, (7)
𝑖=1
In general, if we talk about promising models
where NCFt is the amount of net cash flow in of economic development and future markets,
separate intervals of the general period of it is worth noting that, according to the
operation of the investment project, and n is expectations of the UN, promising trends
the number of intervals in the total calculated should be expected from the development of
period t. the bioresource economy, the closed cycle
When determining the internal rate of economy, the exabyte economy, the welfare
return, a full capitalization of the entire economy, the impression economy, and the
amount is assumed, a net cash flow with a carbon-neutral economy. We tried to present
future rate of return equal to the internal rate the content and general characteristics of each
of return. of the above-mentioned economies, their
2. Partner—through cooperation. This potential, opportunities, expectations, and
approach involves traditional, long- prospects in Table 1. It is also worth noting one
established cooperation with recognized undeniable fact that each of these economies,
contractors, system integrators, and in addition to its formation, is already
developers of ACSTP-IT. Private companies are undergoing a deep digital transformation,
following this path. A vivid illustration of such which the same will be strengthened every
approaches is the first 4.0 cases in Ukraine year and will form Industry 5.0 in the cross-
from Interpipe and PJSC “FED.” There are many section of various sectors of the economy [8, p.
more of them in IT-Enterprise. Thanks to the 1010–1015].
stability of the relationship, the company was .
able to develop its vision of digital
41
Table 1
Prospective models of economic development and future markets according to UN expectations
(grouped by the author based on sources 22; 14; and own observations)
Economic
Expectations and
development General characteristics and content Potential and opportunities
perspectives
model
BioGrowth It is about new agriculture and biomaterials. • By 2021, the global The industrial biotechnology
Economy— Creating biodegradable biomaterials can be biorefining market has already sector will hold the largest
economy of very useful. It will become easier to process reached 550 billion pounds. share of the thermochemical
biogrowth, S1 agricultural waste into fuel on an industrial • The market for animal bioremediation market. So,
trillion scale. protein substitutes grew from by 2020, it reached 447.3
New crops with high nutritional qualities $4.63 billion to $6.43 billion by billion dollars compared to
and greater resistance to disease and 2023. 224.8 billion dollars in 2014.
drought may appear. This will reduce the • The global market for
risks associated with dependence on agricultural biotechnology has
monoculture and accelerate the already increased from 22
development of the seed industry. billion pounds in 2016 to 40
Innovative types of agricultural billion pounds by 2022.
production—hydroponics and vertical • By 2022, the global
farming—are becoming more and more bioplastics market has already
widespread. exceeded 33 billion pounds,
Building on the experience during the COVID compared to 13 billion pounds
pandemic, countries are rethinking food in 2017.
security policies by strengthening local and
regional production. Such a reorientation
will accelerate the introduction of new
technologies.
Exabyte It’s about devices, digital technologies, and • The estimated economic • According to forecasts,
Economy—exabyte people. Two-thirds of the world's population impact of the Internet of Things the size of the cognitive
economy, $8 trillion use mobile phones, and more than half have is estimated at $11.1 trillion per computing market by 2025
access to the Internet. After the pandemic, year in 2025. This is equivalent will amount to $49.3 billion.
more and more people (+7% per year) will to 11% of world GDP, almost • Health improvements for
work on the Internet. The Internet of Things 40% of which can be obtained in people with chronic
(IoT) will evolve: by 2023 there will be developing countries. diseases due to connected
around 3.5 billion connections compared to • 5G is not only “foil hats”, but devices for remote
1 billion in 2018. 5G technology will speed also up to $12.3 trillion to the monitoring can be
up data flow. They will gradually move to global economic output in ten estimated at $1.1 trillion per
online education, personalized health care, years. year by 2025.
finance, and energy efficiency. After the
pandemic, digitization and automation will
only increase.
Circular This is about conscious consumption and • 40% of steel is produced from The global fashion industry
Economy—the extending the service life of goods. It is the scrap. The metal recycling could release $150 billion in
economy of a closed response of governments and corporations market is projected to grow net income by fighting waste
cycle, $4.5 trillion to population growth, resource costs, and from $277 billion in 2015 to and encouraging large-scale
increased public awareness of the needs of $406 billion by 2025; resale of used products.
future generations. Cities will implement • In Europe alone, the net
new systems to reduce environmental benefit of applying circular
impact by reducing waste, recycling economy principles could reach
resources, and generating energy. €1.8 trillion annually by 2030,
reducing the cost of goods,
leaving more income for
consumers, and creating jobs in
the fields of product design and
waste management
engineering.
• The European Commission
plans to invest 1 trillion euros
by 2030 in projects related to
supporting sustainable
development within the
framework of the European
“green course.”
Wellbeing It is about rethinking approaches to one’s • In the USA alone, the self- Health tourism is growing at
Economy, $7 health—physical and mental. Consumer improvement market in 2016 the intersection of the
trillion behavior will change and this will expand was valued at $9.9 billion, and by tourism industry, $2.6
the global wellness market: fitness, diet, 2022 it will reach $13.2 billion. trillion, and the health
beauty industry, travel and real estate, • The market of preventive and market, $4.2 trillion.
educational and organizational practices, personalized medicines in 2017
and mental health balance. Health tourism amounted to $574.8 billion, the
and online training using special programs average annual growth rate was
are important here. 3.7%.
42
• The market for health trackers
and remote monitoring devices
in 2023 amounted to $60 billion.
Experience A paying customer does not buy a product, • The global digital content
• According to forecasts, the
Economy—the but an emotion. The thesis is not new, but market will reach $237.3 billion
world market of sports
economy of now it will be filled with technological by 2024 compared to $143 tourism will amount to $2.9
impressions, $6.5 highlights. This applies to everything from billion in 2019. billion by 2028 compared to
trillion healthcare to banking. It is also about • The global market of banking
$1.4 billion in 2018.
complex software algorithms and high and financial chatbot services • The experience economy
technologies: from 3D reality for trying on was estimated at $357 million in
is not a new concept, but it is
clothes to virtual trips to remote places. 2017 and may reach $2.1 billion
evolving. Although humanity
by 2024. is moving towards conscious
consumption and care for
• The 3D printing sector will
the environment, it still
grow to $28 billion in two years.
wants impressions and
travels.
NetZero Innovation, technology, and investment The potential depends on public • It is expected that the
Economy—carbon- models in markets will accelerate the pressure on the government and world renewable energy
neutral economy, world’s transition to CO2 reductions. About consumer behavior. market will exceed $1.5
$2.3 trillion one-sixth of the world’s investment in trillion by 2025.
energy resources went to renewable energy • By 2025, the global
sources in 2017. electric car market will grow
by 22.3% to $567 billion.
• By 2025, the market of
lithium-ion batteries will
amount to $93 billion, the
market of hydrogen produ-
ction by 2023—$199 billion.
• Going Net Zero could
create 42 million renewable
energy jobs by 2050 and lead
to cumulative savings of $62
trillion.
Digital transformation challenges are the right 3.4. Strategic Challenges of the
approach widely used around the world to find
and encourage innovators. Nevertheless, many
Digital Transformation of the
questions were raised by the general strategy Economy
and selection criteria of DTEK—companies
that offer “light” solutions and mainly related The above-mentioned approaches can be
to control and accounting in non-production complementary. What is generally already
processes made it to the finals: practiced at such enterprises as DTEK? Can
• Unified infrastructure solutions as IoT this be called the true path of digital
platforms. transformation? Do these approaches solve the
• New solutions regarding cyber security (we main issues of acceleration in the field of ACS-
are talking, by the way, about the largest IT in the 21st century? Rather “no”. Mainly
operators of critical infrastructure). because old strategic challenges are not solved,
• Asset management systems and and new ones are increasing.
predictive equipment diagnostics. First, there is no clarity on the priorities of
• Solutions that allow for a “digital leap”— digital technologies and the corresponding
i.e., how to solve the backlog of the same investments. There have been dozens of
mines or power plants in the mass traditional 3.0 technologies for a long time, and
digitalization of physical assets. newer ones that belong to the 4.0 generation are
• Without solving such tasks, it is difficult constantly being added to them today [10–12].
to make serious changes in approaches Classic technologies (3.0+): robots, ERP,
to the digital transformation of such MES/APS/APC, SCADA/HMI, authorization,
enterprises. Without this, and against accounting/dispatching, data warehouses,
the background of a constant increase in mobile technologies, industrial networks, and
tariffs, the question that market cloud computing. New technologies 4.0: IoT
participants ask themselves is becoming platforms, smart sensors, cobots, 3D printing,
increasingly acute—“What is the essence artificial intelligence, cyber security, VR/AR,
of these innovations?” [9]. Real-time Location Services, Wearable, drones.
43
Which of them are priorities today and why? criteria are extremely blurred and unclear. In
For example, with a limited budget, should you addition, the organizers of such
invest in AR/VR technologies, IoT, cloud competitions—even if hundreds of companies
platforms, etc.? Or maybe take up cyber pass through them—do not make any final
security first? What do priorities depend on— analysis of the results. Meanwhile, such
or only ROI? And how can you calculate the ROI analytics are extremely important for the
for completely new technologies? And what orientation of other customers in
about financial indicators in cyber security understanding “who is who”, and for market
issues? participants to understand “where to move or
Similar questions have been around for a where the growth zones are”. As a result, many
long time, but there are usually no unequivocal customers go around in circles—it seems that
answers to them. there are also many developers, and they have
Secondly, there are no “digital leap” already worked with many—and for some
strategies. Ukrainian enterprises have reason, it is necessary to “launch everything
underinvested in classic (3.0) technologies for from the beginning.”
years. The level of basic automation of ACSTP- Fourth, the a lack of focus on the ecosystem.
IT does not exceed 50%, while Western The “fashion for startups”, which captures the
countries, China, and Asia have mostly passed it. mind of some CEOs, is harmful because it
In conversations about 4.0, a clear answer distracts from a much more important
should also be given to the question of “digital strategic question—how to revive and
leap”—how to raise the necessary base for strengthen the innovation ecosystem in your
data processing technologies. This is the main industry? That is, customers from the easy
principle of digitization and it is about the supply of IT incubators, and today already
automatic acquisition of data from physical state structures and international funds, are
assets. Without it, talking about artificial trying to build an increasingly “sophisticated”
intelligence and other smart technologies in system of filters to filter out the best proposals
most cases sounds like fiction. from developers. Not analyzing at the same
And again, there are no clear answers to this time—“Where do these proposals come from
question yet. It is not clear why many esteemed and are there conditions for creating a flow of
customers need new 4.0 technologies if many innovative products?”. The innovation
of their control-accounting-automation tasks ecosystem in most sectors of Ukraine, which
have not been solved. And they are solved by includes modern research institutes, project
classic, long-available methods and institutes, laboratories, technology parks, funds,
contractors. Without clear answers to these etc., has been destroyed. Most often, it is so
questions, companies will catch up with the obvious that it does not even require special
developed world in another 10–20 years. But evidence. And instead, of restoring it together,
then there will be new technologies. the largest market operators continue to “milk”
Thirdly, endless tenders and the practice of it. All this is similar to the notorious
“squeezing”—even in the case of quality phenomenon—of the desire to get “milk
contractors, have had a bad effect on the without a cow”.
confidence of industrialists. The implementation Fifth, ignoring the standards on which the
of complex projects is always associated with world industry 4.0 is based. Talks about
risk management, and teamwork between the interoperability, integration, and cyber-
contractor and the customer—and on a long- physical interaction are completely groundless
term basis. But if you squeeze and tender all the without consideration of the standards
time, lowering the price—what kind of parity of underlying these phenomena. And here is the
interests are we talking about? This is also one of surprise—it turns out that many directors do
the reasons why many leading developers prefer not need these things at all. They don’t even
to work abroad. To this, it is worth adding that realize how similar innovative approaches are
even in tenders there are clear criteria for the to the same invention of the bicycle. After all,
selection of the contractors in question. you will have to redo everything. What then is
As for innovation competitions, the the meaning of these innovations?
questions are the same. Why did certain Sixth, uncertainty in “non-technological”
companies win in them in past years—the factors. The simplest principle of PPT (People,
44
Process, Technologies) was invented in IT, in 3.5. The World’s Most Popular
particular, to introduce the principle of any
technological implementations as complex
Technologies 4.0 for the Field
changes in the organization. That is, “you can’t of Mechanical Engineering
automate chaos”—you can’t implement new
modern technology without changes in Industry 4.0 is about the rapid and massive
business processes, organization structure, introduction of new digital technologies.
methods and culture of interaction, personnel Evidence of this is presented in Table 2.
skills, knowledge, etc. This high-tech axiom is
already 25 years old, if not more [9].
Table 2
The world’s most popular technology 4.0 for the field of mechanical engineering
Technology Characteristics of the technology Fields of application in Ukraine
1 2 3
Predictive Predictive maintenance is a new type of machine and The most active in Ukraine is the Ukrainian
analytics equipment maintenance that replaces traditional methods company IT-Enterprise, whose product
(service) based such as planned preventive maintenance (PR). Stoppage of SmartEAM is the winner of the 2017 4.0
on data production can cost an enterprise from several thousand competition. SmartEAM uses the RCM method,
processing dollars per day (FMCG) to 2.5 million per day (automotive which is the next step in the maintenance of PPR.
industry). Today, smart machines can provide data on why
and when a particular part or assembly might fail. Applying
predictive analytics with new data processing methods and
models can save up to 40% on maintenance and reduce
unplanned downtime by up to 50%.
Product Lifecycle Product Lifecycle Management (PLM) is especially relevant The greatest effect from the application of
Management for machine builders when it comes to innovation and “Engineering Data Management PDM” is
(PLM) constant change. The main trends in this area concern the achieved when integrated with the typical
transfer of PLM to the cloud environment, the emergence of configuration of “Management of a
Product-Data-asa-Service (PDA AS), which turns product manufacturing enterprise for Ukraine”: this is
data into valuable assets, collaboration platforms, micro- how PLM technology is implemented—product
services, as well as blockchain integration. life cycle management technology.
Augmented and To master new machines, put them into operation, and then Companies active with these technologies in
virtual reality in service, operators and operating personnel used to use industrial segments are currently unknown.
instructions in PDF or printed format. But when it comes to Although their number is growing rapidly—the
quickly finding the information you need, as a rule, such first classification and landscape were made in
things do not work—it takes too long! It is another matter Unit.city. The Sensorama company is included in
when the image of the necessary unit or part is presented in the 4.0 movement from this list.
a visual form in 3D and also with all the accompanying
information in real-time about the state of the mechanism.
This is how Virtual and Augmented Reality (VR & AR)
technologies work. The use of AR significantly reduces the
cost of personnel training and equipment maintenance, as
well as reduces unplanned downtime.
Vertical and The “chips” of 4.0 are implemented by interoperability—both OPS UA has long been widely used by many
horizontal vertically and horizontally (the value creation chain) of the market players at the SCADA/HMI level. New
integration of enterprise—this is the OPC UA standard (MEC 62541). This is controllers (such as the Schneider Electric
machines using the de facto standard for 4.0 projects (included in the RAMI M241/M251) allow the use of an OPC UA server
OPS UA model) and supports several other protocols and “on board”—this provides more opportunities
mechanisms—TCP, HTTPS, UPD, AMQP, and MQTT. Available for integration into the cloud environment and
implementations are today in Java, .Net, and ANSIC/C++. OPC work in distributed architectures.
Foundation has more than 500 companies that support and
implement their developments.
Production Production management systems are not a new thing in the It seems that Ukraine missed the 3rd generation
Management industry. We are already talking about the 4th generation of of MES—it is extremely difficult to find them at
Systems (MES) MES (Manufacturing Execution System)—software for our (any) factories. This is additional evidence of
managing production processes in real-time. From gaps between the levels of IT and OT (ASUTP)—
autonomous, local solutions, through integrated and modular after all, there are already many ERP systems on
solutions based on platforms that allow easy integration of the one hand, and ASUTP on the other in
third-party solutions and applications (apps). enterprises.
Smart devices The transfer of intelligence to any device is a characteristic of “Smart” (more intelligent) devices that are easily
and mobile IoT and 4.0. Decreasing the price of sensors and many other integrated into the network have long been
applications field devices makes it possible to significantly increase the offered by a lot of manufacturers in Ukraine,
intelligence of physical objects into which they are integrated. primarily Western ones. Yes—sometimes they
Typical use cases are better monitoring of equipment, are more expensive, but even in such cases, the
including predictive analytics, tracking of wagons or benefits of using them compensate for the initial
machines, mobile personnel, optimization and better cost. One of the best examples of the use of the
management of production, etc. One of the best cases new Real-Time Location Services technology
with new type sensors and the use of mobile
45
described by us in Industry 4.0 where mass use is mentioned applications is demonstrated by Kyiv-based
of smart sensors in production is Intel’s case. Leantegra. The company is widely implementing
this technology in Turkey for tracking rolling
stock and personnel in underground mines.
Cloud platforms Digitalization is impossible without IT infrastructure. Its Ukrainian industrialists are very cautious about
and services central elements are the network and data centers (data new opportunities. Bias about cyber threats,
centers). Maintaining your own, modern data center is an ignoring global trends, reluctance to pay for
expensive “entertainment” for most enterprises, which is why subscription services, etc., collectively throw us
most manufacturers today switch to using cloud services and back into the last century. Still, there is
platforms. Industrialists need to know that the trend in movement. In the field of industrial platforms,
Industry 4.0 is the use of ready-made platforms-as-a-service good examples are shown by the winners of the
(PaaS). Almost every manufacturer of CAE/CAD/PLC/SCADA 4.0 competition in 2017—IT Enterprise,
and even field devices offers integration into them today. Indusoft, and Novatek-Electro (Overvis).
Platforms such as Mindsphere (Siemens), Predix (GE), Ability
(ABB), Ecostruxure (Schneider Electric), and many others are
increasingly used, including machine builders.
Cyber security The Internet of Things is sometimes called the Internet of Technical Committee 185 and its group on cyber
Threats. Cyber-attacks on Oblenergo, “Petya” and other security are actively working on the
(including many non-public) attacks are eloquent evidence of harmonization of Ukrainian DSTU to
the vulnerability of Ukrainian customers. Centrifuges at the international standards. It is worth knowing and
Iranian nuclear power plant went “down” due to the Stuxnet following the best practices of brand leaders
virus, which “broke” control algorithms in Siemens present in APPAU and the 4.0 movement—from
controllers. Does this mean that we should then ban the Siemens, Schneider Electric, Phoenix Contact,
Internet and close ourselves off in our environment, “on and others. But you should not ban the Internet,
proprietary protocols”? Not! The whole world is moving to as the heads of some Ukrainian enterprises still
cloud technologies and the Industrial Internet of Things do—this path is a dead end.
(IIoT), where cyber security issues are one of the main ones.
The IEC 62443 standard is mandatory for industrialists to
follow this path and build their systems and products to be
safe. For machine builders, the MEK 62451 (OPC UA)
standard is also important, which allows you to “build” an
OPS server into a machine in a safe manner.
Simulation, Machine builders increasingly use virtualization and Such things are completely new for Ukrainian
virtualization, simulation technologies in the process of developing new machine builders. We do not have any
and digital twins products. This makes it possible to reduce the cost of information about development or
production many times over and speed up the pace of implementation.
development. Therefore, digital simulation—in all its
varieties—becomes a mandatory part of the PDP (Product
Development Process). Simulation and digitalization capture
the entire life cycle—for example, from the design of a
mechanical product to the programming of the machine on
which it is produced, and to its introduction into production.
Here is a classic example from Dassault Systemes from the
Hannover Exhibition 2017. In 2018, Hannover demonstrated
even more similar cases. An even more advanced level is
digital twin models that virtualize the behavior of a real
object at all phases of its life cycle.
New business The transition to service models is a typical characteristic of Ukrainian OEMs have known about service
models Industry 4.0. Paradigms and “xxx-as-a-Service” approaches models for a long time. At least, giants like Corum
are beginning to be applied to everything around—SaaS Group had their attempts to switch to them 3–4
(Software-as-a-Service) models, products, and platforms years ago. We still have a long way to go to the
(PaaS) have been in use for a long time. Now it’s the turn of level of Kaeser Kompressoren, which already
the Machines. Similar approaches are available thanks to the sells a service (compressed air), not
digitization of machines. After all, the main problem of compressors, in Germany. If only because none
operation is machine maintenance. Thanks to predictive of the machine builders has yet fully
maintenance, including a whole set of 4.0 technologies implemented the technologies that provide the
(digital twins, cyber security, cloud computing—analytics...) Product-as-a-service or Machine-as-a-service
all these become realities. model. And they are all based on 4.0
technologies.
4. Conclusion create important things of a strategic nature
(sometimes—at the level of the entire country)
Returning to the main intrigue of the last three in their closed environment—without
years—the trend of “big—as drivers,” today's involving the best market experts, without
success is decided precisely by the ability to analyzing world trends, without a strategic
create and implement effective strategic focus on the wider ecosystem.
development plans. So far there are none. Industry 4.0 is changing people’s lives
Perhaps they are not there because large beyond recognition. Shortly, this will be the
enterprises act in the old way—they try to most global transformation in human history.
And those countries that want to have high
46
competitiveness and an efficient production https://industry4-0-ukraine.com.ua/
system in the future should take part in it. This 2018/10/18/%D0%B0%D0%BD%D0%
transformation will lead to a change in B0%D0%BB%D1%96%D1%82%D0%B8
economic relations and customer needs, the
%D1%87%D0%BD%D0%B8%D0%B9-
way of production. Therefore, domestic
production needs to take an active part in the %D0%B7%D0%B2%D1%96%D1%82-
global trend of development to occupy an %D1%96%D0%BD%D0%B4%D1%83%D
important place in the world markets of high- 1%81%D1%82%D1%80%D1%96%D1%
tech products. 8F-4-0-%D0%B2-%D0%BC%D0%B0%D1
We hope that ahead of us is the wide %88%D0%B8%D0%BD%D0%BE/
implementation of innovative technologies in [6] K. Kraus, et al., Artificial Intelligence in
production, increasing the efficiency of
Established of Industry 4.0, WSEAS
business operations and, accordingly,
increasing its competitiveness. Of course, for Transactions on Business and
this, it is necessary to overcome several Economics 19 (2022) 1884–1900. doi:
challenges that the modern world poses to 10.37394/23207.2022.19.170.
Ukraine, but the main thing is that the country [7] N. Kraus, et al., Non-financial Indicators
is on the right path, which will not only of the Construction Business Manage-
significantly increase the level of business, but ment Effectiveness Evaluation, 4th
also help accelerate the economic
International Conference on Building
development of the entire country.
Innovations (2023) 719–730. doi:
10.1007/978-3-031-17385-1_60.
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