4. Systems engineering for Industry 4.0

Systems thinking (ST) involves a holistic understanding of a problem in order to find sustainable solutions. While the technologies and tools of the Fourth Industrial Revolution (4IR) have been known to catalyze business efficiency improvement, a comprehensive understanding of the impact of these technologies on the business, from implementation to operation of the tools and technologies, is sometimes not fully clear. This is because a business operates as an ecosystem, with various associated internal and external functions and systems. A change in one part of the system influences the entire ecosystem. Thus, systems thinking enables a holistic understanding of the influence of the technology/tool on the business, enabling firstly the selection of the most appropriate technology/tool and secondly the definition of a comprehensive implementation and operational strategy. The chapter introduces the key theories on systems thinking, including causal loop diagrams and stock-and-flow models, to understand key variables impacting a business. System dynamics modeling, a natural progression from systems thinking, provides a quantifiable assessment of the impact of the technology/tool on the business ecosystem. System dynamics modeling enables a business to conduct scenario analyses to first determine the best-suited technology/tool for implementation in alignment with business objectives and business sustainability, and the determination of an appropriate implementation and operational strategy. The application of system dynamics modeling would be demonstrated via real-world examples.