Incorporating Industry 4.0 concepts into substation automation systems (SASs) enables the achievement of coordinated, fast, and selective protection systems. In this context, this work presents a reliability assessment applied in an industrial substation of a textile company within the framework of Industry 4.0. The Markov chain models both equipment and protection systems, while fault tree analysis allows for analyzing the alternative design scenarios in detail. The TopEvent software version 1.2.3 is used to provide accurate diagnosis using the min-max method. While enhancing selectivity with circuit breakers decreases failure severity, it concurrently increases contingency probability, not necessarily leading to higher reliability. Notably, adopting IEC 61850-based logical selectivity proves more reliable than time coordination, improving the system resilience with load shedding. With support from real-time communication between intelligent electronic devices (IEDs), this approach facilitates reliability improvement, particularly in severe contingencies.