The term ‘Industry 4.0’ relates to the application of the Internet of Things in production and networks, throughout an entire value chain. It is the networking of machinery, products, people and systems to automated processes that deliver improved efficiency, accuracy, quality and speed.

Due to the technical infrastructure a system such as this requires, the term ‘smart factory’ is often used to denote a facility able to offer Industry 4.0 production capability. In essence, smart factories facilitate the delivery of production through computerised systems allowing organisations access to vast amounts of data that can be used to continuously improve their operations. It is the beginning of a new paradigm akin to the importance of the invention of the steam engine or conveyor belt and IT – which each defined previous industrial revolutions.

According to research by IDG Research Services entitled “Industry 4.0 – Where does Germany stand”, only around one-fifth of German companies have implemented Industry 4.0 projects so far, yet two-thirds of those surveyed assume that Industry 4.0 will become an important or very important topic for them in the next three years – a story that appears to be replicated across European manufacturing sectors.

Indeed, as Jochen Hanebeck from Infineon’s Management Board explains, Germany is in very good shape to make the most of Industry 4.0: “Basically, we in Germany and Europe are excellently positioned for Industry 4.0. We have the complete value chains and the ability to make very complex products in top quality. In a nutshell: We’re good at making things.”

German companies appear to be implementing Industry 4.0 principles in a number of ways. For instance, the application of technology across production processes can help manufacturers identify and solve problems that were previously unsolvable. Here, manufacturers utilise 4IR technology to constantly analyse machine data and compare it with past patterns to deliver ‘predictive maintenance’. In doing so, they are able to identify the reasons for a problem occurring allowing them to take corrective measures and avoid expensive downtime. For instance, the BASF plant in Ludwigshafen, Germany developed an early-warning system to enable better planning of maintenance for production plant, pumps, engines and heat exchangers. By analysing real-time and historical data consecutively, they were able to predict when maintenance work was necessary, avoiding reduction in quality, wider damage to machinery and again, avoiding costly downtime.

In another example, Airbus, the European aircraft manufacturer was faced with large tolerance deviations when plane wings were assembled at its plant in Hamburg, Germany. Yet by analysing smart data to correlate both machine and environmental readings, management discovered that the problem always occurred when the tide was falling. It was then able to adjust production accordingly to reduce tolerance deviations and solve the problem. One that is likely to have remained a mystery were they not able to correlate the data.

In the automotive sector, German car producer Daimler is also using Industry 4.0 successfully. Daimler production plants are now able to evaluate machine data to improve the quality of cylinder head production by using sensors to detect deviations and irregularities at an early stage in the manufacturing process. In doing so, they are able to reduce the error rate and make the production process more cost-effective.

At Volkswagen, in an Industry 4.0 project, the automotive manufacturer uses RFID (radio frequency identification) technology to capture data from components fitted with sensors to test vehicles faster. The sensors allow engineers to identify the installed prototype parts effortlessly and display detailed information they need for development.

Industry 4.0 technology is also helping sync data from all over the world. For example, in Dresden, German semiconductor producer Infineon is able to connect its international factories in a network so that test results from Asia can be sent to Germany where they are incorporated in production, essentially creating create one huge, virtual factory. Building the products needed to help others deliver and develop smart factories, the company provides a role model of integrating sensors, edge computing and industry leading software applications that enable international smart factory networks.

Industry 4.0 technology is also becoming an integral part of the logistics industry, helping to optimise transport, efficiently utilise storage capacity and plan ahead. The Port of Hamburg for example, transports 140 million tons of goods every year, yet by 2030, this figure is likely to double. There is currently not enough space at the port to manage this level of traffic so the Port Authority has been implementing Industry 4.0 technology to allow them to move the containers faster to cope with demand. To do so, people, trucks, containers, ships, cranes and traffic management systems are connected via the Internet of Things, through a system of sensors linked on a network. Utilising and effectively analysing such vast amounts of data has actually allowed the authority to simplify the processes for transport goods more effectively.

Industry 4.0 is about making production smarter. It does not mean integrating technology for the sake of it but utilising the capability of 4IR products available to optimise processes and improve cost efficiency across the board. In an international context of rising competition, considering the potential of Industry 4.0 is becoming central to gaining and retaining industrial market share. It is therefore crucial that manufacturers consider their own Industry 4.0 strategy.

Manufacturing is set to be totally transformed by the potential of Industry 4.0. Across the world, producers are rushing to implement the latest technology that can give them a competitive edge in an increasingly challenging industry, but to be successful, the technology needs to be selected in direct accordance with business strategy and objectives, and rolled out in a careful and considered manner. Germany may be leading the way in this regard, but German manufacturers will need to continue to innovate if they are to retain this lead long into the future.


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