5 Building Blocks for Cyber-Physical Value Chains

The digitalization that has disrupted services is set to do the same in industry, and manufacturing in particular. With supply chains operating at their limits amid a growing list of global challenges, new approaches are required to save time, improve efficiency and gain flexibility to survive in volatile, uncertain, complex and ambiguous (VUCA) times. Based on interviews, case studies and collaborations with German firms at the leading edge of this field, the author identifies five key building blocks for the successful implementation of Industry 4.0, and highlights several implications. To stay competitive, companies will have to learn to cooperate, using platform-based business models via which they can sell services and expertise, not just physical products. Those prepared to adapt their skills and protect their value chains will find new opportunities for growth -- while others who are slow to adapt will get left behind.