The Internet of Things drives new Industry 4.0 manufacturing initiatives

Director, Electronics Industry in Europe, IBM

Hannover Messe, the world's biggest industrial fair, opened its doors April 13–17, 2015 to offer a glimpse into the future of industrial and electronics manufacturing. With partner country India, and more than 220,000 visitors and 6,400 exhibitors, the focus was on Industry 4.0, which is the industrialized deployment of a wider IoT strategy within the manufacturing industry. Below is a summary of six key takeaways from the fair, along with some personal perspectives.

1. Industry 4.0 – The next step for Platform Industry 4.0
This year, Hannover Messe once again showcased the German government’s next major steps to secure the manufacturing footprint within this high labor-rate region, to further enhance the competitive position of its local manufacturing companies. Remarkably, the US-based Industrial Internet Consortium (IIC)—with key players such as GE, IBM, Cisco and Intel—is also aligning with this platform, so expect further global collaboration in the future around this topic. The Industry 4.0 platform is operated by governments, companies, business associations and trade unions to support the digitization of industrial and electronics manufacturing. The newly updated platform has put the issue of the fourth industrial revolution on a broader political footing, an effort that is now being headed by Germany’s Economic Affairs Minister Sigmar Gabriel and Research Minister Johanna Wanka, as well as key representatives from the industry and industrial associations. The personnel involved in the Industry 4.0 platform work in interdisciplinary groups around standardization, research and security. Companies leading this initiative include board members from Siemens, Festo, SAP, Deutsche Telekom and Fraunhofer Society. Find out more about the Industry 4.0 platform.

2. Industry 4.0 and the value of analytics
Regarding Industry 4.0, so far we’re seeing a very strong focus on horizontal and vertical fab integration. This is definitely not new; all high-end semiconductor OEMs have done horizontal and vertical fab integration for years. However, this integration strategy is rather new for classical discrete manufacturing environments. Further, M2M connectivity (for example, the connected household appliance), along with the generation of new service revenue streams and new business models, is at the heart of Industry 4.0. Getting things connected in an IoT world is good, but that in itself does not generate value. Real value comes from areas such as analytics improving the yield of a manufacturing line, or providing predictive maintenance and high-value assets like wind farms or energy stations. Leading providers such as IBM, SAP and others showed in particular the value high-end analytics platforms can provide to support an economic path for the manufacturing journey toward lot size one. Again, this is not a new issue but there’s still major adoption potential within the industry. For more, check out this interesting post.

3. The robot YuMi at ABB
While I've written previously about the future capabilities and new ways of using robots, ABB showed its brand-new, leading-edge dual arm, small-parts assembly robot solution YuMi. It includes flexible hands, parts feeding systems, camera-based part location and state-of-the-art robot control. ABB CEO Ulrich Spiesshofer announced proudly that YuMi can even get a thread through a needle's eye—very impressive, I must say! These kinds of robots will become important if your goal is lot size one production, as the idea within Industry 4.0 is to get the production flexibility needed for that type of scenario. Read more about the role of robots in the software defined supply chain world of the future.

4. smartFactory KL
The smartFactory KL is a network of partners with various industrial companies (for example, BASF, Festo, Hirschmann, Siemens, Bosch, Continental, Phoenix Contact, John Deere, Flextronics, IBM, SAP and others) showcasing the intelligent factory of tomorrow in an Industry 4.0 mindset toward lot size one. With standardized interfaces and the very latest information technology, it enables highly flexible, automated production in keeping with the idea of “plug and produce.” The intent of this alliance is to keep Germany at the forefront of the manufacturing sector; create new, skilled jobs; and secure decisive competitive advantages for companies.

5. The flavor of lot size one at Siemens
“On the way to Industry 4.0 – Driving the Digital Enterprise” was Siemens’ theme. The company had a very impressive booth alongside a Digitization Forum that showed various use cases around digitization on the shop floor and Industry 4.0. Most striking to me at the booth was a machine from Optima and its first “customer”: German Chancellor Angela Merkel, who was presented with a personalized perfume called “Angela’s Dream” by Siemens CEO Joe Kaeser. The Optima machine has the new multi-carrier transport system, developed in joint cooperation with Festo and Siemens. On the Optima line, any unique perfume can be produced at the press of a button—Industry 4.0 at its best. I thought about how to transfer this strategy into the white goods industry or into furniture—maybe by personalizing your fridge to be pink or by incorporating wireless charging in a sofa, like Ikea is doing.

6. The burden on security
The nice new manufacturing world comes at a price and with risks to be managed. Security in a connected industrial manufacturing environment, even a cloud-enabled one, is a huge challenge for the industry. I expect a lot of upcoming actions in the market to really secure transactions in private and hybrid industrial cloud environments. Many players are already out there but we have seen only the tip of the iceberg. Plus, acquisitions in this field (like this one from Phoenix Contact) will help overcome the security burden. A few fundamental business model questions need to be addressed, though: “Who owns the data in the machine?” “Where do I keep the analytics intelligence—in the machine or in the cloud?” These questions are very different from the ones being considered from an OEM or IT provider perspective.

For decades, Hannover Messe has been the leading meeting point for the global industrial and electronics manufacturing world. The who’s who of the German engineering world—such as Siemens, ABB, Harting, Festo, Kuka, Rittal, Phoenix Contact, Lenze and many more—met their international counterparts: Schneider Electric, Eaton, Emmerson, GE, Omron, Hitachi and Toshiba. All these, along with global IT companies including IBM, SAP, PTC and Microsoft, showed the future of the manufacturing floor and beyond. While there were many interesting things happening at Hannover Messe, Industry 4.0 was by far the most widely discussed topic. This makes sense as the promise of Industry 4.0 is a great one that is changing the value chain by harnessing the Internet of Things in the manufacturing process. Check out my other recent blog or connect with me on Twitter to talk more about Industry 4.0.

Learn more about how analytics is enabling the new world of manufacturing.