Industry Insiders Report: Industry 4.0

Global Watch: 4 of 7

Industry 4.0 - The Next Industrial Revolution?

The first industrial revolution was triggered by the invention of the stream engine an the mechanization of manual work in the 18th century. The second revolution involved the imprelentation of mass production techniques in the early 20th century,
and a third happened when electronic systems and computer technologies started to be used for manufacturing automation. This "Industry 4.0" project that the German Federal Government has launched takes the initiative of the coming fourth industrial revolution...Mr. Leopold Ploner, living and working in Germany, publisher of a specialized magazine about industrial network "Industrial Ethernet Book," talks about its true value.

Reinvigorating maturing industries

From a European perspective it is important to ensure that advanced countries, of which Germany is one, become more competitive in the long term. That is why the German Federal Government became active in the field of Internet of Things at an early stage. Earlier initiatives such as “Integrative Production Technology for High-Wage Countries” or the “Intelligent Technical Systems (It's OWL)” excellence cluster were bundled into the Industry 4.0 project for which a budget of up to €200 million has been made available in 2013.

"This project strives to create new values and new business models by promoting the development of intelligent monitoring systems and autonomous systems, which enables us to connect IoT in and out of factories via the Internet."

The German "Industry 4.0" project takes into account aspects of location and economy from technological, industrial and social perspectives. Germany already plays a leading role in the field of software-intensive embedded systems, for example in the car industry and engineering. In this context Cyber Physical Systems (CPS) are becoming increasingly important.

CPS integrates computation, networking, and physical processes. An embedded computer is used to monitor and control physical processes, with feedback loops between the physical and computational processes, and a network connects the CPS with one another and with the Internet. In manufacturing an example for this could be a robot with integrated vision system and connection to the plant network. These CPS allow the development of intelligent monitoring and autonomous decision-making processes in order to steer and optimize individual companies and entire value-adding networks in real time. This may ultimately lead to completely new business models and tap into the huge potential for optimization of production and logistics.

It is the Industry 4.0 project, a strategic measure by the German Federal Government that evolves these CPS and promotes the development of intelligent monitoring systems and autonomous systems enabling us to connect IoT in and out of factories via the Internet.

In this Industry 4.0 project, all the elements (e.g.: product components, manufacturing equipment, etc.) related to production processes are assigned with IP addresses to obtain and manage real time information individually. The project also takes flexible measures to deal with various changes in external circumstances such as market needs and logistics conditions to realize the optimization of processes for development, production, and production control. Accordingly, factory productivity is improved, inventories are reduced, and manufacturing and supply chain costs are decreased. Eventually revenue is expected to grow.

An “Industry 4.0” Working Group was set up in January 2012 under the chairmanship of Dr. Siegfried Dais (Robert-Bosch GmbH) and Prof. Henning Kagermann (German Academy of Science and Engineering), which has meanwhile published a “Recommendations for Implementation” report. Industry is now working to turn these recommendations into tangible results. Roland Bent, the managing director of Phoenix Contact, said in his opening presentation at the SPS IPC Drives show in Nuremberg, Germany: “In future we will need production plants that demonstrate a high degree of flexibility. We have to move on from just flexible production, which can only make allowances for ideas masterminded today, to an adaptable plant, which can react to unforeseen events. That means that networking technology will develop even further in the automation industry.”

The potential benefits are huge. A report from Cisco estimates that the potential bottom-line value that can be created or will migrate among manufacturing industries globally (Value at Stake) could be US$ 3.88 Trillion over the next decade. This commercial value can be realized through reduced time-to-market, eliminated waste, greater efficiency, reduced cost and extra business from individualized products.

Photo: German chancellor Angela Merkel and Britain’s PM David Cameron meet a robot at the CeBit trade show in Hanover, Germany.

(Photo: Industrial Ethernet Book, Source: Bundesregierung/Denzel)

What makes Industry 4.0 happen?

Figure 1: The Industry 4.0 factory organizes itself babsed on a network of communication-capable components.

Figure 1: The Industry 4.0 factory organizes itself based on a network of communication-capable components.

  1. Networked systems provide connectivity for local decentrallzed information processing.
  2. Progressive miniaturisation allows for small, low-cost and highperformance sensors and actuators.
  3. Auto-ID for customized product manufacturing creates unique identification and links to the virtual world.
  4. Intelligent field devices using software that qllows for the global synamic distribution of functionality is an integral part of the system integration.
  5. Mobile Device Management(MDM): man-machine inter-daces for intuitive operation of complex systens without special trainning.

(Figure: Industrial Ethernet Book, Source: Weldmuller)

In the USA similar initiatives are underway, primarily powered by major players in the automation industry. The Industrial IP Advantage, founded by Rockwell Automation, Cisco and Panduit, in cooperation with ODVA, aims to establish a secure, holistic digital communications fabric based on standard, unmodified use of the Internet Protocol, , so that it enables customers in industrial fields to connect people, processes, data, and things to networks in order to improve productivity and competitive force.

GE calls the integration of complex physical machinery such as airplanes, trains, gas turbines, etc. with networked sensors and software “Industrial Internet”. In all cases the idea behind it is to draw together fields like machine learning, big data, the Internet of Things and machine-to-machine communication to gather data from machines, analyze it in real-time, and use the results to adjust operations. At the IHS Industrial Automation Conference in Vienna, Austria in October 2013, Bernd Heinrichs, Managing Director Borderless Networks, Cisco, pointed out in his keynote presentation that the number of smart objects will grow from 12.5 Billion today to 50 Billion by 2020, an adoption rate that is five times faster than electricity or telephony.

How manufacturers can benefit from the Internet of Things. The Value at Stake globally could be US$ 3.88 Trillion over the next decade.

"When we talk about the devices that are connected to industrial networks, we tend to focus on the programmable controller but that represents only half of the devices used in manufacturing," says Paul Brooks, Business Development Manager for Rockwell Automation. "The goal is a single network architecture that integrates the almost 50% of devices that aren't connected to the controller, as well as the 50% that are.“

The global networking market in the office, domestic and manufacturing area has shown that the Internet Protocol is the defining technology of networking and digital communications today. That is why major automation companies focus on Internet Protocol to capture the value associated with the Internet of Things. The goal is to extend this Internet of Things from the traditional IT domain to Operational Technologies (OT), the plant and field level.

(Figure: Industrial Ethernet Book, Source: Industrial IP Advantage)

Figure 2: A quote by Industrial IP Advantage, an industry organization.

  • Asset utilization: e.g. saving costs ($675 billion)—reduce selling overheads and sales costs by improving business processes and production efficiency.
  • Employee productivity: e.g. improving labor efficiency ($675 billion)—reduce personnel costs by realizing worker hour reduction and improved productivity.
  • Supply chain and logistics: e.g. eliminating waste ($729 billion)—reduce costs by eliminating waste throughout supply chains.
  • Innovation: e.g. accelerating time-to-market ($810 billion)—increase sales revenue through new business models and opportunities created by improving return on R & D investment and product-to-market time.
  • Customer experience: e.g. increase the number of customers ($999.9 billion)—increase sales revenue by upgrading customer lifetime value and increasing the number of customers.

The human factor

"The longstanding issue is how to break down the silos and achieve convergence in managing networks more holistically," says Dan McGrath, Industrial Automation Solutions Manager at Panduit. "We need the IT side to understand the business value and priorities of control integration, and to take more of a leadership role. The OT side needs to understand the need to partner and work more closely with IT to take advantage of these technologies. The value of the data and impact on plant operation needs help from the plant director level to help break down barriers and avoid turf battles.“ Easier said than done. Traditionally, IT and OT departments eye each other suspiciously and are eager not to allow the other side too much influence. That could be one of the reasons why Industry 4.0, despite its obvious benefits, may still take a while to become a reality.

Peter Herweck, Head of Corporate Strategy at Siemens, thinks it will be an evolutionary process rather than a revolution: “We’re talking about a time period of 20 years or so. The result will appear to be revolutionary from today’s point of view, but ultimately it will involve a large number of development steps.”

Leopold Ploner
Publisher of Industrial Ethernet Book

Industrial Ethernet Book