Annals of Operations Research

https://doi.org/10.1007/s10479-024-06012-6

ORIGINAL - SURVEY OR EXPOSITION

Integrating artificial intelligence in industry 4.0: insights,

challenges, and future prospects–a literature review

Abd El Hedi Gabsi1

Received: 5 October 2023 / Accepted: 16 April 2024

© The Author(s), under exclusive licence to Springer Science+Business Media, LLC, part of Springer Nature 2024

Abstract
This review article explores the integration of artificial intelligence (AI) in industry 4.0 and
its transformative impact on the manufacturing sector. The core principles of industry 4.0,
revolving around digitalization, automation, and connectivity, are examined, emphasizing
the creation of “smart factories”. The article also discussed the different categories of AI,
such as narrow AI and general AI, and their significance in industry 4.0. The advantages
of AI technologies in enhancing productivity, efficiency, and decision-making processes
in manufacturing are discussed, supported by real-world case studies. In addition to the
benefits, the article addresses the challenges and limitations of AI implementation. It delves
into the current status of AI and Human Workforce Collaboration, highlighting the seamless
integration of AI technologies with human workers to maximize efficiency in manufacturing.
The article explores the innovation and customization of AI in industry 4.0. Moreover, the
review addresses the future directions for AI implementation. By examining these key aspects,
the article offers valuable insights into the transformative potential of AI in industry 4.0 and
its implications for the future of manufacturing.

Extended author information available on the last page of the article

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Graphical Abstract

Keywords Artificial intelligence · Machine learning · Deep learning · Industry 4.0 · Smart
manufacturing

Abbreviations

AI Artificial intelligence
ML Machine learning
DL Deep learning
CV Computer vision
IoT Internet of things

1 Introduction

Artificial intelligence is an innovative technology that has been rapidly advancing over the
years and has found its application in various industries. One of the significant areas where AI

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is being utilized is in industry 4.0 (Derisma et al., 2022). Industry 4.0, also known as the Fourth
Industrial Revolution (Kim & Lee, 2022), refers to the integration of advanced technologies
such as AI, big data analysis, cloud computing, IoT, and robotics in manufacturing processes
(Aquilani et al., 2020). These technologies in industry 4.0 have the potential to revolutionize
manufacturing by enhancing productivity, efficiency, and automation.
AI plays a crucial role in industry 4.0 by enabling machines to perform intelligent tasks and
make decisions without human intervention (Molino et al., 2021). For example, in smart man-
ufacturing systems, AI algorithms can analyze and interpret vast amounts of data collected
from sensors and machines to optimize production processes, detect faults or anomalies, and
predict maintenance needs (Suman et al., 2022). Furthermore, AI can assist in the imple-
mentation of predictive analytics, allowing manufacturers to make data-driven decisions and
optimize their operations. The integration of AI in industry 4.0 also enables the develop-
ment of autonomous systems (Sharma, 2019) and robotics, leading to increased automation
in manufacturing facilities. By leveraging AI, manufacturers can achieve higher levels of
flexibility and customization in their production processes. Additionally, AI algorithms can
be used in quality control (Tr`ân et al., 2021) to detect and identify defects in real time,
improving the overall product quality.
The integration of AI in industry 4.0 not only enhances productivity, efficiency, and
automation but also enables the development of autonomous systems and robotics, lead-
ing to increased levels of automation in manufacturing facilities and warehouses (Pimsakul
et al., 2021). These technologies, including AI, have the potential to transform traditional
manufacturing industries into smart manufacturing systems that are more flexible, efficient,
and responsive to changing customer demands (Rucki, 2023). The objective of this com-
prehensive review article is to provide an in-depth overview of the integration of AI within
the context of industry 4.0, focusing on its applications and transformative impact in the
manufacturing sector. To this end, the following research questions were formulated:

Q1: What is the current status of AI and Human Workforce Collaboration in the context of
industry 4.0?
Q2: How is innovation and customization of AI being implemented in industry 4.0?
Q3: What are the future directions for the implementation of AI in industry 4.0?

It aims to explore various AI-driven applications, such as smart manufacturing, quality

control, supply chain optimization, and predictive maintenance, and assess the benefits and
limitations of AI adoption in manufacturing. By concentrating on the industry 4.0 context
and incorporating real-world examples, this review article seeks to present readers with a
comprehensive understanding of AI’s role in revolutionizing manufacturing processes and
its potential to drive future innovations in the industry.

2 Industry 4.0

Industry 4.0 is a transformative concept that represents the integration of advanced digital
technologies into manufacturing processes (Fu, 2022), thereby creating “smart factories.”
It revolves around the idea of a highly interconnected and data-driven industrial ecosystem
(Anumbe et al., 2022). Figure 1 shows technological pillars of industry 4.0.
Industry 4.0, is characterized by nine key pillars (Asadollahi-Yazdi et al., 2020) that
are transforming manufacturing and industrial practices. At its core lies interconnectivity,
where machines, devices, and systems seamlessly exchange data through technologies like

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Fig. 1 Technological pillars of industry 4.0

the industrial internet of things (IIoT) and cloud computing. This fosters information trans-
parency, enabling real-time data analysis and optimized decision-making powered by big
data and artificial intelligence. Technical assistance comes through robots and autonomous
systems, boosting efficiency and productivity. Decentralized decisions empower machines to
act independently, improving agility and responsiveness (Rosin et al., 2022). Cybersecurity
safeguards these interconnected systems from disruptive attacks. Additive manufacturing
(3D printing) facilitates custom, cost-effective production. Cloud computing provides scal-
able and flexible data storage (Islam et al., 2023) and application access. Simulation allows
virtual testing and optimization of products and processes. Finally, augmented reality overlays
digital information onto the real world, enhancing training, maintenance, and repair. These
pillars, acting in concert, are driving a radical shift towards an intelligent, interconnected,
and adaptable industrial landscape.
The core principles of industry 4.0 are centered on digitalization (Attiany et al., 2023),
automation, and connectivity, which together bring unprecedented levels of efficiency, pro-
ductivity, and flexibility to manufacturing (Stadnicka et al., 2022). At the heart of industry 4.0
lies the digitalization of information and processes. This involves the conversion of physical
assets (Mohd et al., 2022), data, and operations into digital formats (Minonne et al., 2018),
making them accessible and analyzable in real time (Lamagna et al., 2021). It encompasses
technologies such as the IoT, cloud computing, and big data analytics (Cruzara et al., 2021).
By digitizing everything from machines and products to supply chain logistics, manufactur-
ers can gain valuable insights, optimize operations, and enable data-driven decision-making
(Charnley et al., 2019).
Industry 4.0 heavily relies on automation, where machines, systems, and processes are
equipped with the ability to perform tasks autonomously and intelligently (Durana et al.,
2019). Advanced robotics, AI-driven algorithms, and ML play a pivotal role in automating
various stages of production, reducing human intervention, and improving overall efficiency

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(Li et al., 2022). Automation enables continuous operations, faster response times, and a
reduction in errors, ultimately leading to increased productivity (Yap et al., 2022). Connec-
tivity is the foundation of industry 4.0. It refers to the seamless communication and interaction
between different components and entities within the manufacturing ecosystem (Zywicki &
Bun, 2021). This involves the integration of various devices, machines, and systems into a
unified network, often referred to as the Industrial IoT (Torres da Rocha et al., 2022). Through
interconnected devices, data can flow across the entire value chain, enabling real time mon-
itoring, remote control, and predictive maintenance. This connectivity also extends beyond
the factory floor to encompass the entire supply chain, enabling better coordination and
optimization (Meidutė-Kavaliauskienė & Ghorbani, 2021). Manufacturers can track inven-
tory levels, monitor logistics, and optimize distribution processes (Timiryanova et al., 2020).
This increased visibility and coordination lead to more efficient supply chain management,
reducing lead times and overall operational costs (Keshavarz et al., 2021).
Industry 4.0 has a transformative impact on traditional manufacturing processes and value
chains, revolutionizing the way products are designed, produced, and delivered. Industry 4.0
blurs the lines between the digital and physical worlds (Hsu et al., 2022). Cyber-physical
systems and digital twins create virtual replicas of physical assets, allowing manufacturers to
simulate, test, and optimize designs before physical production. This integration minimizes
costly errors and accelerates the product development cycle.
The integration of advanced digital technologies and smart systems into manufacturing
brings about significant changes across various aspects of the industry. Figure 2 showing the
adoption of industry 4.0 technologies across different sectors.
It introduces the concept of “smart factories” (Reljić et al., 2021) where machines, equip-
ment, and systems are interconnected and communicate with each other in real time. This
connectivity enables manufacturers to gather vast amounts of data from the production
process, allowing for real-time monitoring and analysis. The automation and digitiza-
tion of manufacturing processes result in increased efficiency and productivity. Automated
machinery can operate continuously, reducing downtime and maximizing output. Moreover,
predictive maintenance enabled by industry 4.0 helps anticipate and prevent machine failures,
further reducing unplanned downtime and costly disruptions.
Industry 4.0 enables a shift from mass production to more personalized manufacturing
(Gajsek et al., 2019). With advanced data analytics and AI, manufacturers can gather insights

Fig. 2 Industry 4.0 adoption by sector

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about customer preferences and tailor products to individual needs. This level of customiza-
tion enhances customer satisfaction and creates a competitive advantage. Industry 4.0 allows
for decentralization of decision-making processes (Götz, 2020). With smart systems and
autonomous machines, factories can adapt quickly to changes in demand and production
requirements. This agile manufacturing approach enables manufacturers to respond rapidly
to market shifts and customer demands.
Industry 4.0 requires a workforce with advanced digital skills to operate, maintain, and
optimize smart systems. It leads to a shift in roles, with an increased focus on data analysts,
AI specialists, and technicians capable of working with advanced technologies.

3 Artificial intelligence

AI is a branch of computer science that aims to create intelligent machines capable of simulat-
ing human-like intelligence (Tang & Hai, 2021). It encompasses a diverse range of techniques
and approaches that enable machines to perceive, learn, reason, and make decisions. AI has
gained immense prominence across various industries, including manufacturing (Nguyen &
Tran, 2022), healthcare, finance, and entertainment, among others, due to its ability to solve
complex problems and improve decision-making processes.
ML is a subset of AI that focuses on developing algorithms and statistical models to
enable machines to learn from data without being explicitly programmed (Goździkiewicz
et al., 2022). ML algorithms identify patterns, make predictions, and continuously improve
their performance based on the data they process. Supervised learning, unsupervised learning,
and reinforcement learning are common paradigms of ML.
DL is a subset of ML that utilizes artificial neural networks inspired by the human brain’s
neural structure (El Bsat et al., 2022). These neural networks consist of multiple layers
of interconnected nodes (artificial neurons) that enable the model to extract hierarchical
representations from complex data. DL has shown remarkable success in tasks such as image
recognition, natural language processing, and speech synthesis.
Natural Language Processing (NLP) is a subfield of AI that focuses on the interaction
between computers and human language. It enables machines to understand, interpret, and
generate human language in a way that is meaningful and contextually relevant (Sheu et al.,
2023). NLP applications range from sentiment analysis and language translation to chatbots
and voice recognition systems. Natural Language Generation (NLG) is an AI technique
that focuses on generating humanlike language based on structured data (Cahyawijaya et al.,
2021). It involves transforming data into coherent and readable narratives, making it valuable
for automated report writing, content generation, and personalized communication.
Reinforcement learning is a type of ML that involves an agent interacting with an environ-
ment to achieve a specific goal (Mpia et al., 2023). The agent learns by receiving feedback in
the form of rewards or penalties based on its actions, refining its decision-making processes
over time.
CV is an AI technique that enables machines to interpret and understand visual information
from the world. It involves extracting meaningful insights from images or videos, allowing
machines to recognize objects, detect patterns, and make decisions based on visual data
(Sinshaw et al., 2022). CV finds applications in autonomous vehicles, facial recognition
systems, and quality control in manufacturing.
Linear regression is a simple but powerful algorithm that can be used to model a linear
relationship between two or more variables (Maulud & Mohsin Abdulazeez, 2020). It is

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often used for forecasting and predicting future values. Ridge regression is a variation of
linear regression that adds a penalty to the model’s coefficients (Sun et al., 2022). Lasso
can be used to select a subset of the most important features for a model (Li et al., 2020).
K-Nearest Neighbour is a simple but effective algorithm that classifies new data points based
on the k most similar data points in the training set (Kohli et al., 2021). Gaussian process is a
probabilistic algorithm that can be used for both regression and classification (J. Wang, 2020).
It is often used in cases where the data is noisy or uncertain. PLS is a multivariate statistical
technique that can be used to reduce the dimensionality of a data set while preserving as much
information as possible (Zeng et al., 2021). Decision tree is a simple but powerful algorithm
that can be used for both classification and regression (Sen et al., 2020). It works by recursively
dividing the data set into smaller and smaller subsets until each subset can be classified or
predicted with a high degree of accuracy. SVM is a powerful algorithm that can be used for
both classification and regression (Cervantes et al., 2020). It works by finding the hyperplane
that best separates the two classes of data. GBM is a type of ensemble learning algorithm that
combines multiple decision trees to improve the performance of the model (Calabrese et al.,
2020). Random forest is another type of ensemble learning algorithm that combines multiple
decision trees to improve the performance of the model (Liu et al., 2021). ANN is a type of
artificial neural network that can be used for both classification and regression (Otchere et al.,
2021). It works by learning the weights of the connections between the neurons in the network.
CNN is a type of artificial neural network that is specifically designed for image recognition
(Dhruv & Naskar, 2020). Recurrent neural networks (RNNs) are a type of ANN that is
specifically designed for sequence modeling (Hewamalage et al., 2021). They can be used
for tasks such as natural language understanding and machine translation. Fuzzy matching
is a technique for matching two strings that are not exactly identical (Bosker, 2021). It works
by finding the similarities between the two strings and using these similarities to calculate a
similarity score. LLMs are large language models that are trained on a massive amount of text
data (Zhao et al., 2023). They can be used for a variety of tasks, including natural language
understanding, natural language generation, and machine translation. Bayesian networks are
probabilistic graphical models (Ballester-Ripoll & Leonelli, 2021) that can be used for both
classification and regression. They are often used in cases where the data is noisy or uncertain.
Deep reinforcement learning is a type of machine learning algorithm that can be used to train
agents to learn how to behave in complex environments (Ju et al., 2022). It is often used in
games and robotics. In AI, performance indices are utilized to evaluate the model based on
the proximity between predicted and actual values.
AI plays a crucial role in the development of robotic systems capable of perceiving and
interacting with their environment autonomously. These systems can adapt to changes, learn
from experience, and perform tasks that are dangerous or monotonous for humans. It can be
broadly categorized into two main types: narrow AI (also known as weak AI) and general
AI (also known as strong AI) (Shao et al., 2023). Each type has distinct characteristics and
applications, and their significance in industry 4.0 varies based on their capabilities and
limitations.

3.1 Narrow AI

Narrow AI refers to AI systems that are designed and trained to perform specific tasks or solve
particular problems within a limited domain (Brauner et al., 2023). These systems excel in
the tasks they are programmed for but lack the ability to generalize their knowledge beyond
their specific domain. It is specialized and focused on a narrow set of tasks, often achieving

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superhuman performance in those tasks. It plays a crucial role in industry 4.0 by powering
various applications and automation tasks. In smart manufacturing, narrow AI is used for
predictive maintenance, quality control, anomaly detection, and process optimization. Its
ability to analyze vast amounts of data in real time enhances efficiency, reduces downtime,
and improves overall productivity. Industry 4.0 predominantly relies on narrow AI due to
its current state of development and practical applications. As AI technology advances,
the integration of more sophisticated narrow AI applications in industry 4.0 is expected to
continue, enabling further automation and data-driven decision-making.

3.2 General AI

General AI refers to a hypothetical form of AI that possesses human-level intelligence and

the ability to perform any intellectual task that a human can do. General AI would be capable
of understanding, learning, reasoning, and adapting to a wide range of situations, surpassing
human cognitive abilities (Dudnik et al., 2021). It would be highly flexible and adaptive,
capable of learning from different data sources and solving complex problems beyond its
initial programming. It would exhibit a level of consciousness and self-awareness, leading
to humanlike decision-making. While general AI is still a theoretical concept and remains
far from realization, its potential impact in industry 4.0 is immense. If achieved, general AI
could revolutionize manufacturing by autonomously managing entire production processes,
dynamically adapting to changing demands, and driving innovations beyond human capa-
bilities. However, the development and ethical implications of general AI present significant
challenges that need to be addressed. While the vision of general AI remains a long-term
goal, its potential to revolutionize industry 4.0 cannot be understated. General AI, if realized,
could lead to a paradigm shift in manufacturing, introducing autonomous and self-improving
systems capable of adapting to new challenges and driving innovation at unprecedented lev-
els. However, the development of general AI also raises ethical concerns, such as ensuring
safety, accountability, and appropriate use of advanced AI systems.
Figure 3 illustrates the distinction between Narrow AI and General AI.

4 Integration of AI in industry 4.0

AI is being integrated into various aspects of industry 4.0, revolutionizing traditional man-
ufacturing processes and enabling a more efficient, data-driven, and autonomous industrial
ecosystem (Jwo et al., 2021). Figure 4 visualizes the distribution of AI applications in the
manufacturing sector.
In smart manufacturing, AI is used to improve the efficiency, productivity, and safety of
manufacturing processes (Zeadally et al., 2020). AI-powered predictive analytics enables
manufacturers to anticipate failures. By analyzing historical data and sensor readings, AI
models can predict potential faults (Zhou et al., 2019). AI algorithms optimize manufactur-
ing processes by analyzing data from various sensors, machines, and systems. This enables
continuous monitoring and adjustment of production parameters, leading to increased effi-
ciency and higher product quality. AI-driven robots and cobots (collaborative robots) work
alongside human operators in smart manufacturing. These robots can perform repetitive or
dangerous tasks with precision and consistency, enhancing productivity and workplace safety.
In maintenance, AI-based anomaly detection models continuously analyze sensor data
to detect abnormal patterns or deviations from normal machine behavior (Ali et al., 2022).

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Fig. 3 Narrow AI vs. General AI

Fig. 4 Distribution of AI in the manufacturing sectors

By identifying potential issues early on, predictive maintenance helps prevent equipment
breakdowns and reduces maintenance costs. Monitoring systems continuously monitor the
health of industrial equipment and machinery. They use ML algorithms to recognize patterns
and trends, allowing maintenance teams to take proactive actions before a failure occurs.

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In logistics and warehousing, AI is used to power autonomous vehicles, such as automated

guided vehicles and autonomous mobile robots (Russo et al., 2016). These vehicles navigate
through the facility, transport goods, and optimize material flow without human intervention.
AI-driven drones are utilized for inventory management, surveillance, and asset tracking.
They can autonomously scan large areas, collect data, and perform tasks such as stockpile
measurement in warehouses and construction sites. AI is employed in autonomous decision-
making systems, where machines can make real-time decisions based on data analysis and
predefined rules. These systems are used in manufacturing to optimize logistics routes and
resource allocation.
In quality control, AI-based CV systems inspect and analyze products during the manu-
facturing process to detect defects and ensure quality standards are met (Wang & Li, 2021).
These systems can identify even minor defects that might be challenging for human inspec-
tors to detect. AI leverages data from various sources, including customer feedback and
production data (Moung et al., 2022), to identify patterns and correlations that can lead to
quality improvements and process optimizations.
In supply chain management, AI-driven demand forecasting models analyze historical
sales data, market trends, and other relevant factors to predict future demand for products.
This enables manufacturers to optimize inventory levels, reduce stockouts, and improve
overall supply chain efficiency. AI algorithms optimize logistics and transportation routes
by considering factors like traffic, weather, and delivery schedules. This ensures faster and
cost-effective transportation of goods.
In energy Management, AI is used to monitor and optimize energy consumption in man-
ufacturing facilities. Smart systems analyze energy usage patterns and adjust equipment
settings to reduce energy waste, leading to cost savings and sustainability benefits (Sassanelli
et al., 2022).
AI-powered generative design tools to assist engineers in creating innovative product
designs. Generative design tools explore countless design possibilities based on specified
parameters (Rahnamoun & Rahnamoun, 2023), optimizing for factors such as material usage,
weight, and performance. AI may also be used in computer simulations to predict product
behavior under various conditions. This helps identify design flaws early in the development
process, saving time and resources.
AI enables safe and seamless collaboration between humans and robots on the factory
floor. Collaborative robots are equipped with sensors and AI algorithms to detect human
presence, ensuring that they can work alongside humans (Kovačić et al., 2022) without
posing a safety risk. Cognitive manufacturing systems combine AI with human knowledge
and expertise to enhance decision-making processes (Wang et al., 2021). These systems
analyze complex data sets, such as customer preferences, market trends, and production
data, to support strategic decision-making. AI-driven customization enables manufacturers
to offer personalized products to individual customers at scale. By analyzing customer data
and preferences, AI systems can tailor products to meet specific needs and preferences.
AI assists in workforce management by analyzing employee performance data (Mer
& Virdi, 2023), identifying skill gaps, and recommending personalized training programs
(Chowdhury et al., 2023). It can also help with talent acquisition by screening resumes and
identifying suitable candidates. AI analytics optimize resource utilization and minimize waste
in manufacturing processes. By identifying areas of inefficiency, manufacturers can reduce
material waste, energy consumption, and environmental impact.
The integration of AI in industry 4.0 is multifaceted and spans across various domains.
As AI technology advances and becomes more accessible, its applications in industry 4.0

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are expected to continue evolving, driving further advancements in the manufacturing sec-
tor. AI technologies offer a plethora of advantages across industries, enhancing productivity,
efficiency, and decision-making processes (Yadykin et al., 2021). These benefits encom-
pass automating repetitive tasks to boost productivity and enable real-time data analysis
for agile responses to changing conditions. Additionally, AI-driven predictive analytics
anticipates issues, promoting proactive measures, while continuous learning leads to pro-
cess improvements. AI systems enhance precision, quality, and personalization, optimizing
resource allocation and scalability for fast, data-driven insights. Moreover, AI aids in risk
mitigation (Deiva Ganesh & Kalpana, 2022), acts as decision support, optimizes manufactur-
ing, and fuels innovation potential, driving the development of novel products and solutions
(Arents et al., 2021). AI empowers businesses to achieve new levels of performance, stay
competitive, and drive continuous improvement in an ever-evolving world.
AI-driven applications have ushered in a new era of transformative advancements in man-
ufacturing (He et al., 2022), providing innovative solutions that optimize processes and drive
unparalleled efficiency (Cioffi et al., 2020). Several leading companies have successfully inte-
grated AI technologies into their operations, reaping remarkable benefits and revolutionizing
their respective industries.
Several AI algorithms were commonly used in industry 4.0 applications. The adoption
of specific algorithms can vary depending on the industry, use cases, and technological
advancements. Table 1 shows some of the most widely used AI algorithms in industry 4.0.
In the context of industry 4.0, various AI technologies and research directions are poised
to revolutionize manufacturing processes. These innovations include Explainable AI (XAI)
for transparent decision-making, Federated Learning for collaborative model training while
preserving data privacy, Reinforcement Learning (RL) to optimize complex processes, and
Transfer Learning for knowledge transfer across tasks. AI for Cybersecurity in Manufac-
turing safeguards against cyber threats, while Collaborative Robotics (Cobots) enhance
human–robot interaction on the factory floor. Quantum Computing for Optimization tack-
les intricate problems, and Edge AI enables real-time decision-making on edge devices.
Generative Adversarial Networks (GANs) improve product design and simulation, and AI
for Sustainable Manufacturing promotes eco-friendly practices. These advancements collec-
tively shape the future of industry 4.0, redefining manufacturing with enhanced efficiency,
safety, and sustainability. Table 2 provides some examples of companies utilizing AI tools
within the context of industry 4.0.
These examples demonstrate the versatility of AI in addressing various manufacturing
challenges, ranging from warehouse management and supply chain optimization to qual-
ity control and human–robot collaboration. By harnessing AI technologies, companies can
unlock significant efficiency, cost savings, and improvements in production processes, ulti-
mately gaining a competitive edge in the ever-evolving manufacturing landscape.

5 Challenges and limitations

While implementing AI in the manufacturing sector offers numerous benefits, several chal-
lenges and limitations need to be addressed.

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Table 1 AI algorithms used in industry 4.0, produced from data in (Altalak et al., 2022; Es-sakali et al., 2022;
Gabsi et al., 2023; Iqbal et al., 2023; Jena et al., 2022; Kaushal et al., 2022; Rithani et al., 2023; Rodríguez-
Valderrama et al., 2022; Shankar & Parsana, 2022; J. Singh et al., 2023)

Algorithms Implementation

Convolutional neural networks (CNNs) Commonly used for image and video analysis tasks,
including object detection, recognition, and segmentation
Recurrent neural networks (RNNs) Suitable for sequential data like time series analysis, natural
language processing, and speech recognition
Generative adversarial networks (GANs) Employed in generating synthetic data, image-to-image
translation, and creative applications like art and music
generations
Natural language processing (NLP) NLP algorithms are crucial for understanding and processing
human language in text and speech data. They enable
applications such as chatbots, sentiment analysis, and
language translation
Predictive maintenance algorithms These algorithms use sensor data and ML techniques to
predict equipment failures and schedule maintenance
proactively, reducing downtime and optimizing
maintenance costs
CV algorithms Apart from CNNs, other CV algorithms like feature
extraction, edge detection, and image segmentation are
used in quality control, inspection, and object recognition
tasks
Fuzzy logic Fuzzy logic is used to handle uncertainty and imprecision in
data and is applied in various control systems, especially in
environments where precise rules are challenging to define
Genetic algorithms Genetic algorithms are optimization techniques inspired by
the process of natural selection. They are used for complex
optimization problems and in training neural network
architectures
Swarm intelligence algorithms Swarm intelligence algorithms mimic the behavior of social
insect colonies and are used for optimization and resource
allocation tasks
Support vector machines (SVM) SVM is widely used for classification and regression tasks,
especially when dealing with small to medium-sized
datasets
IoT data analytics Various AI algorithms are applied to analyze large volumes
of data generated by IoT devices in real time, enabling
smart decision-making and process optimization

5.1 Challenges

First, integrating AI technologies into existing manufacturing processes can be costly (Li
et al., 2021a, 2021b), especially for small and medium-sized enterprises. Retrofitting AI
solutions into legacy manufacturing systems can be challenging due to compatibility issues.
Seamless integration with existing software and hardware requires careful planning and
coordination.
Second, AI algorithms heavily rely on large and high-quality datasets for training and
decision-making. Ensuring the availability of relevant and reliable data can be challenging
(Prinsloo et al., 2019), especially for legacy systems with limited data collection capabilities.

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 Table 2 Examples of AI-Driven, produced from data in (Bangroo, 2023; CİĞERCİ, 2023; Edwards & Rodriguez, 2019; Fettermann et al., 2018; Ghelichi & Kilaru, 2021; Jin &
Shin, 2021; Kumar et al., 2023; L’Esteve, 2023; P. Li et al., 2023; Moya et al., 2023; Roggeveen et al., 2021; Shi et al., 2022; Vijayalakshmi et al., 2023; W. C. Wang et al., 2017;
Y. Wang et al., 2020; Winata & Ellitan, 2023)

Type Company Challenge AI Solution Results

Predictive Thyssenkrupp elevator Traditional elevator maintenance was Implementation of an AI-driven Reducing downtime by up to
maintenance AG costly and relied on scheduled predictive maintenance system 50%. This resulted in
inspections, leading to unexpected significant cost savings and
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breakdowns and service disruptions improved customer satisfaction

Quality control Foxconn technology Ensuring the quality of products An AI-based CV systems used to The implementation of AI-driven
group manufactured on a large scale was automate quality control processes quality control significantly
challenging and required extensive increased defect detection
manual inspection accuracy, leading to improved
product quality and reduced
production costs
Energy efficiency BMW group Enhancing energy efficiency in The AI system analyzed and optimized Reduce energy consumption by
manufacturing processes to reduce energy consumption by adjusting 5–10%, resulting in substantial
costs and environmental impacts equipment settings and processes in savings and a reduced carbon
real time footprint
Customized Adidas Delivering customized products to AI algorithms analyzed customer data, The AI allowed Adidas to offer
manufacturing individual customers at scale was preferences, and design inputs to personalized shoes to
challenging due to the complexity of generate personalized shoe designs customers, resulting in
custom manufacturing increased customer satisfaction
and a competitive edge in the
market
Autonomous robots Amazon Managing the high volume of orders “Kiva” robots navigate through the Amazon reported a 20%
and optimizing warehouse fulfillment centers, carrying shelves of reduction in order-to-shipment
operations for quick and accurate products to human workers for order time, allowing them to meet
order fulfillment picking customer demands more
quickly and efficiently

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 Table 2 (continued)

Type Company Challenge AI Solution Results

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Supply chain Walmart Optimizing the supply chain to The AI system forecasts demand, Walmart reported a 10%
optimization minimize inventory holding costs allowing Walmart to optimize improvement in inventory
and stockouts inventory levels and manage its supply turnover and better shelf
chain more effectively availability
Quality control General electric (GE) Inspecting and maintaining industrial Drones equipped with CV and ML It allowed GE to identify
equipment, such as gas turbines and capabilities to inspect and monitor equipment issues early on and
wind turbines, in remote and industrial equipment. The drones plan targeted maintenance,
challenging environments detect anomalies and potential defects leading to reduced downtime
and increased equipment
reliability
Human–Robot Siemens Improving human–robot collaboration Siemens integrated AI technologies, The AI-enhanced human–robot
collaboration on the factory floor to enhance including CV and natural language collaboration at Siemens led to
efficiency and safety processing, to enable human–robot improved manufacturing
collaboration in assembly tasks efficiency and reduced physical
strain on human workers and
enhanced safety
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Another significant challenge that manufacturers face is dealing with sensitive data (Mazurek
& Małagocka, 2019) related to processes, products, and customers. AI implementation must
comply with data privacy regulations and robust security measures to protect against data
breaches and unauthorized access. Ensuring the continuous performance and adaptability of
AI models requires dedicated resources and processes (Alauddin et al., 2021). In complex
manufacturing processes with limited or fragmented data, training accurate AI models can
be challenging. Data collection and cleaning in such environments may require significant
efforts.
Moreover, the successful integration of AI requires skilled personnel capable of develop-
ing, implementing, and maintaining AI systems (Chen et al., 2023). There may be a shortage
of talent with AI expertise, and existing employees may require upskilling to adapt to the
changing work environment.
In addition, the adoption of AI may face resistance from the existing workforce (Williams
& Yampolskiy, 2021) due to concerns about job displacement or changes in work processes.
Companies need to address these concerns proactively and involve employees in the AI
implementation process. AI implementation may also face resistance from management
due to concerns about initial costs, uncertainties about return on investment, and potential
disruptions to existing processes. Convincing stakeholders of the long-term benefits and
providing evidence of successful AI deployments is crucial.
Finally, as manufacturing operations grow and evolve, AI systems need to be scalable
and flexible to accommodate changing requirements and increased data volume. The diverse
array of AI technologies and platforms can lead to interoperability issues.

5.2 Limitations

In addition to facing challenges, there are intrinsic limitations linked to the implementation of
AI across various sectors. AI models, especially DL algorithms, can be complex and difficult
to interpret (Zheng et al., 2022). In critical applications like safety–critical systems or medical
devices, explainability and transparency are crucial to building trust and ensuring compliance
with regulations. However, technologies can inadvertently perpetuate biases present in his-
torical data, leading to biased decision-making and unfair outcomes. AI models may overfit
to specific training data and fail to generalize well (Field et al., 2023) to unseen scenarios. AI
models might not always perform accurately in unpredictable or novel situations. Ensuring
the reliability and robustness of AI systems is crucial to avoid potential disruptions and safety
concerns. Ensuring that AI models can handle diverse and real-world situations is essential
for robust performance. AI systems require ongoing maintenance, updates, and monitoring.
Another crucial aspect lies in the ethical limitations of AI implementation, encompassing
the need to address algorithmic bias, ensure fairness, and uphold ethical standards throughout
the entire AI lifecycle. The integration of AI in industry 4.0 brings forth numerous ethical
implications that require careful consideration (Munoko et al., 2020). Key concerns include
bias and fairness in AI models, potential job displacement, data privacy, transparency, and the
autonomous decision-making of AI systems. In regulated industries, such as healthcare and
aerospace, implementing AI solutions requires adherence to stringent regulatory standards. To
address these ethical implications, responsible AI practices, transparency, and accountability
are vital. Manufacturers should adopt ethical frameworks, mitigate bias in AI algorithms,
ensure explainability, and prioritize data privacy and security. Human oversight, continuous
monitoring, stakeholder engagement, and ethical AI governance are essential to promote
responsible AI use. Through these measures, manufacturers can harness the benefits of AI

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while upholding ethical standards and ensuring AI technologies positively contribute to the
manufacturing ecosystem.
The lack of industry-wide standardization can hinder seamless data exchange and inte-
gration of AI systems between different manufacturing processes and facilities. AI models
require continuous learning and adaptation to remain effective. Keeping AI systems up-to-
date (Al-Amin et al., 2021) with new data and evolving manufacturing challenges requires
ongoing efforts and resources (Trakadas et al., 2020).
Finally, the initial investment in AI infrastructure, software, and training may pose a finan-
cial barrier for some companies (Haseeb et al., 2019). Addressing these limits requires a
multi-faceted approach that involves collaboration between various stakeholders, investment
in research and development, and a commitment to ethical and responsible AI deployment.
Manufacturers must prioritize data privacy and security, invest in workforce development,
and ensure that AI algorithms are fair, transparent, and ethically sound. By taking proactive
measures to address these limitations, the manufacturing sector can fully leverage the trans-
formative power of AI technologies to drive innovation, efficiency, and sustainable growth.
Engaging in meaningful collaborations with AI experts, ensuring compliance with regulatory
requirements, and cultivating a culture of responsible AI use will be instrumental in unlock-
ing the true potential of AI while simultaneously minimizing potential risks and challenges.
Embracing these principles will pave the way for a future where AI becomes a driving force
for positive change in manufacturing, propelling industries towards a more prosperous and
responsible AI-driven landscape.

6 AI and human workforce collaboration

The integration of AI in the manufacturing industry has a significant impact on the workforce.
While AI technologies bring automation, data-driven decision-making, and increased effi-
ciency, they also raise concerns about job displacement and workforce adaptability (Singh,
2023). Here are some key points on the impact of AI on the manufacturing workforce:

– AI-driven automation can replace repetitive and routine tasks previously performed by
human workers (Ateş et al., 2020). This automation leads to increased operational effi-
ciency and cost savings for manufacturers. However, it can also result in job displacement
for certain roles, especially those that involve repetitive manual labor.
– As AI adoption increases, there is a growing demand for workers with AI-related skills,
such as data analysis, programming, and AI model development. Manufacturers need to
invest in upskilling and reskilling programs to enable their existing workforce to work
collaboratively with AI systems and take on new roles.
– AI technologies improve overall productivity in manufacturing processes. By handling
mundane and repetitive tasks, AI allows human workers to focus on more complex and
creative aspects of their jobs, leading to increased productivity and job satisfaction.
– AI serves as a decision support tool for human workers, providing them with valuable
insights and data-driven recommendations. Human expertise, combined with AI-driven
insights, results in better decision-making and problem-solving (Vărzaru, 2022).
– AI-powered robots and cobots can take on hazardous tasks, reducing the risk of workplace
accidents and injuries. This enhances workplace safety and creates a safer environment
for human workers.

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– AI implementation leads to a shift in job roles and demands new types of skills. Employees
may be required to transition to roles that involve monitoring and managing AI systems,
interpreting AI-generated data, and collaborating with AI-powered robots.
To maximize efficiency and productivity, manufacturers need to adopt strategies that foster
effective collaboration between AI systems and human workers. Here are some key strategies:
– Continuous Training and Upskilling: Manufacturers should invest in continuous training
and upskilling programs to prepare their workforce for AI adoption. Training should focus
on AI literacy, data analysis, and AI-related skills (Lu et al., 2022) to enable employees to
work seamlessly with AI systems.
– Human–Machine Interface Design: Designing user-friendly and intuitive human–machine
interfaces (HMIs) is crucial for effective collaboration between human workers and AI-
powered systems. Easy-to-use interfaces ensure that employees can interact with AI tools
and interpret AI-generated insights effectively.
– Augmented Intelligence Approach: Emphasize an augmented intelligence approach, where
AI acts as a supportive tool to enhance human capabilities rather than replacing human
workers entirely. This approach ensures that human expertise and creativity are valued and
integrated with AI-driven insights.
– Inclusive Decision-Making: Involve employees in the AI implementation process to foster
a sense of ownership and engagement (Fan et al., 2023). Seek feedback from workers on AI-
related initiatives and incorporate their insights to create a collaborative AI environment.
– Transparency and explainability: Ensure that AI systems provide clear explanations for
their decisions, especially in critical areas like quality control and safety. Transparent AI
systems build trust and understanding among human workers, fostering better collabora-
tion.
– Continuous Monitoring and Feedback: Continuously monitor AI system performance
and gather feedback from employees to identify areas for improvement and address any
concerns. Regular communication and feedback loops are vital for refining AI-human
collaborations (J. Williams et al., 2022).
– Encouraging Innovation: Encourage innovation and creativity among employees to identify
new applications and use cases for AI in manufacturing. Creating an innovation-focused
culture enables workers to find ways to leverage AI for process improvement and new
product development.

7 Innovation and customization

In the dynamic landscape of manufacturing, the integration of AI-driven innovation and

product personalization is poised to open a new realm of opportunities for manufacturers
seeking to stand out in the market (Buntić et al., 2021). AI technologies will serve as the
driving force behind a wave of revolutionary advancements, empowering manufacturers to
redefine their approach to product development and customer engagement (Sang et al., 2020).
Through AI-driven innovation, manufacturers will harness the transformative potential of
generative design and AI simulations, enabling the creation of highly optimized and novel
products that were previously beyond imagination. These cutting-edge designs will not only
push the boundaries of traditional manufacturing but also cater to the specific needs and
desires of individual customers (Yang et al., 2022).
Furthermore, product personalization will take center stage as AI enables manufacturers
to offer bespoke experiences to their customers at an unprecedented scale (Sira, 2022). By

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analyzing vast amounts of customer data and preferences (Zhao et al., 2020), AI-powered
systems will deliver highly customized products that resonate with each customer’s unique
tastes and requirements. From tailored features to personalized aesthetics, customers will be
presented with a level of choice and individuality that sets manufacturers apart from their
competitors.
The synergy between AI-driven innovation and product personalization will enable manu-
facturers to create a vast array of unique offerings, catering to diverse customer segments and
niche markets (Grenčíková et al., 2021). This level of agility and responsiveness to customer
demands will not only boost customer satisfaction but also foster brand loyalty and advocacy.
Moreover, the combination of AI innovation and product personalization will drive man-
ufacturers to continually refine their offerings, responding swiftly to market trends and
customer feedback. By staying at the forefront of technology and customization trends,
manufacturers can maintain a competitive edge and position themselves as pioneers in the
industry.
In this age of heightened customer expectations and market competition, AI-driven inno-
vation and product personalization will serve as the foundation for manufacturers to forge
deeper connections with their customers, fueling a virtuous cycle of continuous improve-
ment and customer centricity. As the manufacturing landscape continues to evolve, those
who embrace AI’s transformative capabilities will find themselves at the vanguard of inno-
vation, driving growth, and success in the ever-evolving market.

8 Future directions

The future prospects and trends of AI in industry 4.0 hold immense potential to further
revolutionize the manufacturing sector. As AI technology continues to advance, its impact
on manufacturing is expected to grow in several key areas.
In the ever-evolving landscape of manufacturing, AI is set to drive a profound transforma-
tion, revolutionizing every aspect of the industry (Wang, 2022). Enhanced automation will be
at the forefront, as AI facilitates the automation of various processes across the manufacturing
value chain. Smart production lines, autonomous logistics, and AI-driven inventory manage-
ment will become the new norm, streamlining operations and boosting overall efficiency
(Njah & Cheriet, 2021).
Predictive maintenance, powered by AI, will witness remarkable advancements, enabling
manufacturers to move closer to achieving zero downtime (Li et al., 2021a, 2021b). The
sophistication of AI-powered predictive maintenance systems will empower manufactur-
ers to anticipate and prevent equipment failures before they occur, minimizing disruptions
and maximizing productivity (Banitaan et al., 2023). AI-enabled maintenance and inventory
management will deliver significant cost and waste reductions. By optimizing maintenance
schedules and inventory levels, manufacturers will streamline operations and achieve higher
resource efficiency (Da Rocha et al., 2021).
Moreover, AI-driven innovation will redefine product design and development. With gen-
erative design and AI simulations, manufacturers will create highly optimized and customized
products that perfectly align with customer preferences and needs.
Supply chain management will undergo a transformative shift as AI optimizes the entire
process (Wei & Chen, 2021). By predicting demand, optimizing inventory levels (Cutting-
Decelle et al., 2006), and enabling real-time logistics and route optimization, AI will bring

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unprecedented efficiency and agility to supply chain operations. AI’s role in driving sus-
tainability and energy efficiency will be pivotal in reducing the environmental impact of
manufacturing processes. By optimizing energy usage and resource allocation, AI will con-
tribute significantly to a more sustainable future.
In the manufacturing workforce, AI-powered cobots will emerge as valued collabora-
tors alongside human workers. These collaborative robots will augment human capabilities,
enhancing productivity and ensuring seamless coordination between humans and machines.
Explainable AI will gain paramount importance, particularly in safety–critical applica-
tions. The development of more transparent AI models will be crucial for fostering human
trust in AI systems and ensuring compliance with stringent regulations. AI-driven quality
control systems will set new standards in precision and accuracy, revolutionizing product
quality by minimizing defects and enhancing overall manufacturing standards.
In the future of manufacturing, the application of General AI holds tremendous potential
to revolutionize the industry and usher in a new era of unparalleled innovation and efficiency.
While we are currently in the era of narrow AI (Monye, 2023), General AI is expected to have
a profound impact on the manufacturing sector. With General AI, manufacturing processes
will experience a significant leap forward in automation and adaptability. These intelligent
systems will be able to analyze vast amounts of data from multiple sources. General AI’s
ability to perceive, reason, and learn from various data inputs will enable real-time decision-
making and dynamically adjusting manufacturing processes for maximum efficiency. This
level of AI-driven design innovation will lead to the creation of entirely new product concepts.
One of the most significant benefits of AI will be its capacity for personalization at scale.
Manufacturers will leverage AI-powered personalization to deliver highly tailored products
and experiences to individual customers, enhancing customer satisfaction and fostering brand
loyalty. Innovation and product personalization will continue to present exciting opportuni-
ties for manufacturers to thrive in an increasingly competitive market. The advancement of
AI technologies will propel revolutionary breakthroughs, allowing manufacturers to create
highly optimized and novel products through generative design and AI simulations. More-
over, AI’s capabilities will enable unprecedented levels of personalization, as manufacturers
harness extensive data analysis to tailor products to individual customers’ preferences and
needs. This seamless synergy between AI-driven innovation and personalized offerings will
empower manufacturers to cater to diverse customer segments, further fostering brand loyalty
and advocacy. By proactively monitoring market trends and gathering customer feedback,
AI-driven manufacturers will maintain their competitive edge, consistently refining their
offerings and leading the industry towards a future defined by customer-centric innovation
and sustained growth.
In the future of manufacturing, the integration of AI is set to create a wave of new job oppor-
tunities (Tuffour & Nsiah, 2023), reshaping the workforce and demanding a new set of skills
and expertise (George & Baskar, 2023). As AI technologies become more prevalent in the
manufacturing sector, there will be a growing need for professionals (Raju & Sumallika, 2023)
with specialized knowledge to develop, implement, and maintain these advanced systems.
Roles in data science, ML engineering, AI system management, human-AI collaboration,
and AI ethics will emerge, showcasing that AI is not just a threat to traditional manufacturing
jobs but also a catalyst for creating a skilled and dynamic workforce. Embracing AI will
require manufacturers to invest in training and upskilling their employees (Tripathi & Rode,
2023), providing opportunities for workers to acquire the necessary skills to work alongside
AI systems effectively and shape a more agile, innovative, and future-ready workforce in the
realm of AI-driven manufacturing.

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Lastly, in discussing the future direction of AI, it’s essential to acknowledge its connec-
tion with the emerging industry 5.0 strategy. The integration of AI within the framework
of industry 5.0 represents a shift towards empowering human workers alongside intelligent
automation, emphasizing the importance of human–machine collaboration and ethical con-
siderations. This synergy between AI and industry 5.0 aims to create more inclusive and
collaborative manufacturing environments, enhancing productivity, agility, and innovation
while promoting sustainable and socially responsible practices. Exploring the intersection
of AI and industry 5.0 will be crucial in shaping the future landscape of manufacturing and
driving positive societal impact.

9 Conclusion

The review article explored the integration of AI in industry 4.0 and its impact on the man-
ufacturing sector. It delved into various aspects, including the definition and core principles
of industry 4.0 and the transformative impact of AI on traditional manufacturing processes.
The article also addressed the challenges and limitations of implementing AI in the manu-
facturing sector, such as data privacy and security concerns, the lack of skilled workforce,
potential biases in AI algorithms, and ethical considerations.
Furthermore, the review article successfully addressed the three research questions posed
at the beginning. Q1: investigated the current status of AI and Human Workforce Collabo-
ration, revealing how AI technologies are integrated into industry 4.0 to foster collaboration
between AI systems and human workers, maximizing efficiency in manufacturing. Q2: pro-
vided insights into Innovation and Customization of AI, showcasing real-world case studies
that demonstrate AI’s role in driving innovation and personalized product design through data
analysis. Q3: examined future directions for AI implementation in industry 4.0, discussing
emerging technologies like Explainable AI, Federated Learning, and Edge AI, which are set
to revolutionize manufacturing with enhanced automation and sustainability.
Despite the numerous benefits, the integration of AI in industry 4.0 poses challenges that
require careful consideration. Ethical concerns related to data privacy, fairness, and biases
in AI algorithms must be addressed to ensure responsible AI practices. Furthermore, the
potential for job displacement necessitates workforce upskilling and retraining to enable
human workers to collaborate effectively with AI systems.
The importance of AI in shaping the manufacturing future is immense. AI-driven automa-
tion, innovation, and optimization will be key drivers of industry growth, competitiveness,
and sustainability. As AI evolves and new research directions emerge, companies are poised
to witness remarkable advancements, creating a more intelligent and interconnected manu-
facturing ecosystem. To stay ahead in the industry 4.0 revolution, manufacturers must actively
embrace AI technologies and stay abreast of ongoing developments.
Funding No funding was received for this research work.

Data availability Data available within the article or its supplementary materials.

Declarations

Conflicts of interest There is no conflict of interest.

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Authors and Affiliations

Abd El Hedi Gabsi1

B Abd El Hedi Gabsi

gabsihedi@yahoo.fr
1 ISET Nabeul, DGET, 8050 Nabeul, Tunisia

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