Justification Report for Implementation of the Industrie 4.0 System in Japan



Justification Report for Implementation of the Industrie 4.0 System in Japan




I am submitting a report for the justification of the use of the Industrie 4.0 System in improving the current labor impasse in the country.

This report examines the effects of an aging working population and highlights the negative effects of the changing demography. Contained herein are the possible mechanisms for the alleviation of impending crises in Japan and ways in which the labor force can be efficiently managed for maximum results.

I hope that you find the paper helpful in this regard.


Signature: _____________________________

Table of Contents

Executive summary. 4

Introduction. 5

Problem statement 5

Method used. 5

Findings. 5

Analysis. 6

Conclusion. 7


Executive summary

Industries 4.0 has been used in numerous industries and countries in streamlining the operations of these organizations. The system seeks to pool together all the functions of manufacturing, processes and human resources under one umbrella. The system links the smart company to smart grids, smart buildings and smart products in the Internet of Things and smart logistics and smart mobility in the Internet of Services. The system has been developed from the necessity of extensively using the internet as a revolutionary tool.

Its successful installation and use in the Japanese context will alleviate an impending labor crisis caused by an aging population weighed against the need for a robust economy. Industrie 4.0 is thus revolutionary and if well implemented can reduce the energy and resources expended by all industrial and other workplace processes in a comprehensive interconnected and automated system.


The world over has witnessed a steady improvement in the way that human beings do things. Historically, there have been three industrial revolutions that were characterized by mechanization, electricity and IT. Naturally, a fourth revolution is in the offing and is going to be characterized by the Internet of Things and Services (Ashton, 2009). Globalization has led to increased competition and has consequently created the necessity for a harmonized system of operation so that multinational corporations can synchronize their operations in different frontiers. This necessity has led to the creation of global networks that incorporate warehousing systems, machinery and production facilities in a Cyber-Physical system.

These systems are characterized by smart machines, smart storage, production systems that have the capability of exchanging information that triggers reactions autonomously among other networked scenarios (Miles, 2011). These systems, although networked, will function independently such that their management will be simplified. There already exist a number of smart factories that have smart products which can be uniquely identified; may be located at any time; have systems that allow for current status to be viewed and have distinct recorded histories (Kagermann et al, 2013)..

The systems in these smart factories are vertically networked to business processes and horizontally networked to value networks that are managed in real time. Right from when an order is placed to logistics involved in availing the product to the market, there is no time that the process is not monitored in real time. All this is possible through a new system called Industrie 4.0 that encompasses this Internet of Things (Kagermann et al, 2013).

This report is directed to Japan’s Secretary of Health, Labor, and Welfare in an attempt to point out the expected crisis due to the above stated underlying factors. The report also offers a solution in the form of implementation of the Industrie 4.0 which has been touted as being part of the next human revolution.

Problem statement

The Japanese labor market is about to run into crisis due to an aging population and an expanding economy. Japan has the oldest working population in the world today. The average age of many people in the workforce is over forty which points to a change in demography (McCurry, 2007). The economy of Japan is suffering from a scarcity in human resources. The government has crafted numerous policies that are aimed at alleviating the situation including encouraging more women and older citizens to enter into the workforce. These domestic initiatives have been augmented with the influx of foreign workers to push the Japanese economy onwards. Industrie 4.0 is a helper to the human resources in improving work efficiency while drastically reducing costs. This system if well implemented in the Japanese manufacturing industry will increase efficiency of human resources and machines in a series of automated and semi-autonomous processes.

Method used

This research is qualitative as it seeks to analyze human behavior. Thus, the decisions that need to be made do not necessarily rely on the quantity of data that may be collected but rather on its value. Data required for this research will be gathered by analyzing existent document and materials in the dearth of literature available about demographics in Japan. Data will be interpreted through understanding the works of numerous authors, economic experts and planners have been keenly studying the situation in Japan. The themes that will be uncovered in this research will form the basis for the recommendations to Japan’s Secretary of Health, Labor, and Welfare.


A large percentage of the Japanese labor market is either beyond or approaching the retirement age. This poses a problem as the country, which is one of the most industrialized in the world, seeks to advance. Many industries have been found to be severely understaffed, hanging on to people well beyond their prime or filled wit foreigners. The data collected also indicated that women and the youth are being given numerous incentives in order to enter the labor market but are responding at a very slow pace or are favoring non-traditional industries like manufacturing.

The demographic changes in Japan have been occasioned by two major changes. First, there is low fertility with the average children per woman standing at 1.4 and also the replacement of the baby boomers that formed the bulk of the labor force since the 80s and are now past the retirement age. Nearly a quarter of the Japanese population is over the age of 65 (World Bank, 2011).

The Japanese have undergone a change in attitude regarding their country’s labor market. While the economy was built on the strong camaraderie between workers and employers since the late 80s, there has been a gradual shift in these attitudes with lesser people identifying with their employers (Keizer, 2009). This has served to further shrink the labor force.


Japan finds itself in a very precarious situation as it is faced with multiple challenges in offsetting demographic changes, keeping abreast with other developed countries and also remaining competitive in the global market. Many countries have recognized the importance of employing the Internet of Things in order to streamline their industries and enhance their competitiveness in the market. Japan faces stiff competition from countries like Germany and the US that have or are in the process of engaging the Internet of Things and Services on a larger scale. Industrie 4.0 has been touted as the solution to energy and resource efficiency, production in urban areas and offsetting the negative effects of changes in demography (Mintchel, 2014). The system is also very effective in appraising the various components of the value chain and ensuring that they are continuously productive. The most important aspect of Industrie 4.0 is that it allows for demographic changes to be factored into the work environment alongside other social factors (Kagermann et al, 2013). The result of this is that workers do not have to experience burnout in repetition of tasks or the monotony associated with routine but will be liberated to perform more value-adding activities. The advantage of this is that the looming shortage of skilled labor in Japan will be offset since older workers will be productive for longer in turn improving their livelihoods and life expectancy. The flexibility of work will allow workers to strike a balance between their work, their private lives and their professional development in a manner that neither part of life compromises fulfillment of the other.

Industrie 4.0 seeks increase productivity in longer working lives of people meaning that it will herd a number of important, formerly disjointed aspects. This will include: organization of work, management of workforce health, learning in longer life scenarios, management of knowledge and structures of teams (Kagermann et al, 2013). This means that the system will ultimately be entrenched in the education system so that it can be learnt from the onset.

The figure below represents the integration of the various components of the Internet of Things and Services (Kagermann et al, 2013).

The Internet of Things and Services according to the illustration above is a system that links a factory or a business to its products, distribution channels and other factors of production in a seamless, interconnected manner. The major point of note here is that there is an internet. This insinuates an ongoing connectedness that is accessible in real time. This illustration is just a basic representation with the real integration of businesses or industries with their components being much more complex.


Industrie 4.0 is a fairly new concept that is expected to revolutionize the way businesses are conducted. The system will be entrenched at the heart of manufacturing, industry and all other spheres of life to streamline and coordinate all functions with the specific intention of increasing efficiency of resources, including human resources, in turn reducing costs and increasing competitiveness (Mintchel, 2014). The system collects all the data from individual systems and relays them to a centralized server with other relevant data. The sum of all data that assist in the formation of a product or service is collated in a manner that excesses are identified and minimized. The concept is urgently required in Japan, a country that has the oldest workforce and is expected to experience a severe shortage of labor in the next few years. Industrie 4.0 is meant to offset the negative effects of this anticipated change in demography by ensuring that performance of tasks is in such a manner that encourages the older members of the population to be productive for even longer.

The system has already been introduced in some countries and some industries on a small scale. However, it is anticipated that it will eventually take over much of the current disjointed parts of everyday living and coordinate them under one system. The overall effect of this will be the seamless interaction of work, private life and personal development spheres of everyday living.




Ashton, K. (2009, June 22). That ‘Internet of Things’ Thing, In the Real World Things Matter More Than Ideas. RFID Journal. Retrieved March 15, 2014 from: http://www.rfidjournal.com/articles/view?4986

Kagermann, H., Wahlster, W., & Helbig, J. (2013). Recommendations for Implementing the Strategic Initiative Industrie 4.0. Germany: Federal Ministry of Education and Research. Retrieved March 15, 2014 from: http://www.plattform-i40.de/sites/default/files/Report_Industrie%204.0_engl_1.pdf

Keizer, A. (2009). Transformation in- and outside the internal labor market: institutional change and continuity in Japanese employment practices. International Journal of Human Resource Management, 7(20), 1521–1535.

McCurry, J. (2007, April 17). Japan’s age-old problem. The Guardian (UK).

Miles, S.B. (2011). RFID Technology and Applications. London: Cambridge University Press

Mintchel, G. (2014). The Future of Manufacturing: Industry 4.0. Automation World. Retrieved March 15, 2014 from http://www.automationworld.com/industry-business/future-manufacturing-industry-40

World Bank (2011). Fertility Rate, Total (births per woman).retrieved March 15, 2014 from: http://data.worldbank.org/indicator/SP.DYN.TFRT.IN

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