Industry 4.0 : Deutschland , der globale Reiseführer.. oder ?

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Industry 4.0 is the current trend of automation and data exchange in manufacturing technologies. It includes cyber-physical systems, the Internet of things and cloud computing. The 4.0 designation signifies that this is the world’s fourth industrial revolution, the successor to three earlier industrial revolutions  that caused quantum leaps in productivity and changed the lives of people throughout the world.

Industry 4.0 is a project of the future of the German government’s high-tech strategy, which aims to advance the penetration of information technology in conventional industrial manufacturing .The strategic goal is to achieve the smart factory, which is characterized by its adaptability, resource efficiency and ergonomics, as well as the integration of customers, employees and business partners in business and value creation processes. The Internet of Things is one of the technological foundations for the smart factory.

Within the modular structured smart factories, cyber-physical systems monitor physical processes, create a virtual copy of the physical world and make decentralized decisions. Over the Internet of Things, cyber-physical systems communicate and cooperate with each other and with humans in real time, and via the Internet of Services, both internal and cross-organizational services are offered and used by participants of the value chain. Smart Production, is a cornerstone of the Industry 4.0-Smart Factory concept, and includes the incorporation of advanced logistics management, man-machine interaction, and three-dimensional (3D) visualization technologies into production processes.

A harbinger of the next industrial revolution is already bubbling in the small Bavarian city of Amberg. The Siemens Electronics Plant manufactures simatic programmable logic controls (PLCs), used for automating equipment in a variety of industries from automobile manufacturers to food and beverage producers. Basic automation has been a part of the Amberg plant since it began in 1989,  now machines and computers handle 75 percent of the production process from start to finish. In addition to PLCs, the plant also makes use of human machine interface (HMI) components such as heavy-duty touchscreens, and coordinates the process through WinCC software and the company’s engineering framework, known as TIA (totally integrated automation) Portal.

Given the variety of production environments and techniques, raw materials, and specialized equipment requirements for each industry, however, a one-size-fits-all solution will not be the answer. Consideration must also be given to the specific operating requirements of each production environment.

For example, in steel mills, temperature sensors must accurately measure the condition of steel plates and tooling in hot rolling processes in environment operating with temperatures reaching 2,100-degrees Fahrenheit. Wired communication systems do not work at such a high temperature, making wireless communication technology the only viable solution.

Oil refineries are an example where wireless signals are weakened because of the maze of metal pipes. In such environments, wireless technologies featuring strong diffraction and penetration capabilities, enterprise Long-Term Evolution (eLTE) technologies, fit the bill perfectly.

Schildknecht AG, a southern German specialist in industrial electronics, uses Twitter to let machines communicate with people, making both sides smarter. Whether single devices or complete production lines – the people responsible for operating the machines are active followers of a closed or open user group, which can follow and manage the tweets on a smartphone, tabs, or desktop computer. If a machine reports a product error or a malfunction warning, the communication can be bi-directional: The user can send a tweet back to the machine, for example, to reset the error. Implementing such solutions on a large scale requires reliable, secure networking from end to end.

However some observers feel that Industry 4.0 as a concept is poorly defined and suffers from exaggerated expectations; others believe that fully digitised products and value chains are still a ‘pipe dream’. The Gartner Group’s hype cycle for emerging technologies for 2014 places many of the technologies associated with Industry 4.0 (including machine-to-machine communications, big data, the Internet of Things and smart robots) near the ‘peak of inflated expectations’, still five to ten years from the point where the payoff for applying these in the broad market is evident. In a global 2013-14 survey, 88% of the respondents said they did not fully understand the underlying business models of the Industrial Internet of Things and its long-term implications for their industry. Even those convinced of the value of Industry 4.0 can foresee a series of barriers ahead.

Large investments are needed if enterprises are to make the move to Industry 4.0; these are projected to be €40 billion annually until 2020 for Germany alone (perhaps as much as €140 billion annually in Europe). These investments can be particularly daunting for small and medium-sized enterprises (SMEs) who fear the transition to digital because they cannot access how it will affect their value chains. So far take up has been cautious: even in Germany (a leader in manufacturing), only an estimated one in five companies uses interconnected IT systems to control its production processes, though almost half intend to do so.

Other critics say that systems are too expensive, too unreliable and oversized, and that the Industry 4.0 approach is being driven largely by equipment producers rather than customer demand. There is a strong divergence of views between those keen to promote the idea of a wireless (as opposed to simply “connected”), or even mobile (as opposed to nomadic wireless), factory future, and others who simply don’t see their customers ripping out and replacing their factory solutions.

With the large quantities of data being collected and shared with partners in the value network, businesses need to be clear about who owns what industrial data and to be confident that the data they produce will not be used by competitors or collaborators in ways that they do not approve. In particular, smart services will be based on the data generated by smart devices during their manufacture and use. For example, car-makers are reluctant to share data generated by their cars, for fear of finding their profits being squeezed by digital competitors.

The market is evolving fast, with a blurring of the boundaries between the domains of the manufacturing automation specialists, such as ABB, Bosch and Siemens, and of the IT providers offering applications and systems integration services. Where once there were separate ecosystems of hardware and software suppliers, the development of cloud and IoT solutions is bringing them together into the same competitive arena. At the same time, communications providers (hardware providers or service providers) are being sucked into the value chain to enable interconnection of devices and sensors so that data can be aggregated and analyzed.

There are several ways operators might attempt to break into this new market such as targeting new factory builds (where using mobile might reduce the upfront networking cost) and targeting factory refurbishments (where the cables need to ripped out anyway). They might also try a completely different approach. Spectrum sub-licensing (where national regulations allow) may make sense here, giving operator revenues (where otherwise they might have none), vendors the opportunity to sell their kit and factories the capability to use licensed spectrum within the geographical confines of their properties but retain control of their infrastructure and (assuming the licensing model makes sense) retain control over costs. 5 G “ slicing “ will allow Telcos to dedicate network resources to Industriel manufacturers. So there is a power play and any self respecting Tier 1 Telco must get ready for it.

According to Experton Analysyis , those who will become established players in the market are not necessarily the providers with the best IoT platform technology, but those who can establish a partner ecosystem around their own IoT platform. Major risks for industrial control systems are not related to information losses, but rather include system failures, communications losses and a loss of control. Often, such disruptive scenarios are a result of malware and DDoS attacks. Industrial security solutions shall help prevent such attacks. IoT logistics has a focus on product tracking and transport path optimization as well as fleet management for forwarding agents. Smart fleet management solutions must go beyond GPS tracking of vehicles and analyze consumption data, maintenance needs caused by wear and tear and fuel optimization.

For Telcos to really participate in this phenomenon of Industry 4.0 ( like Deustch Telekom in Germany ) they need to imbed and leverage the basic building blocks : Cloud Computing , Data Analytics and IoT. They need to develop and manage complex ecosystems through platform thinking. They must be prepared to orchestrate the 4.0 services delivery model in a manner that will benefit the whole ecosystem rather than trying to gobble up everything themselves. A real network effect can only be generated by ecosystems that combine a strong core solution (USP) with a strong business model (win-win) to attract more and more partners. Within the next few years, we will experience intense “coopetition” between competing IoT ecosystems.

Most of all one must remember that although technology — Big Data, cloud computing, and IoT — play an important role in Industry 4.0, the fundamental driver is a strategy for improving the efficiency and competitiveness of enterprises by resolving the fundamental challenges that plague multiple industries. In the words of German Chancellor Angela Merkel, Industry 4.0 is ‘the comprehensive transformation of the whole sphere of industrial production through the merging of digital technology and the internet with conventional industry’.

According to Deutsche Telekom CEO ” Companies in the classic production industry are increasingly digitalizing and networking their business processes in real time so that they will be able to produce better, at less cost, and more flexibly in the future. The products and services from the corporation’s core business such as secure cloud computing, broadband and mobile networks, complex IT security solutions, and the ICT knowhow of all of the colleagues in Telekom Group are the foundation.”

 

Sadiq Malik ( Telco Strategist )

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