Seize the Great Opportunity of the 21st Century, Industry 4.0
From the Meinsa team, Industrial Process Automation, we have written the final report with all the information you need about Industry 4.0 and how to take advantage of this great opportunity for your business.
What is Industry 4.0?
Industry 4.0 is the Internet of things in production and networks throughout the value chain. That means that it connects machinery, products, people and systems to enable processes that are largely automated. Companies can produce goods more efficiently, flexibly and economically in a smart factory. However, this also changes requirements in the labour market: routine tasks are eliminated, leaving room for new and more demanding activities. People will continue to play a key role. Businesses face many challenges, such as: How can older machines be made web-enabled and connected systems protected from hackers?
Robots move autonomously through factory aisles, transporting production materials from A to B. The products communicate with the machines and begin the next manufacturing steps. And when the devices identify that they need to be repaired, they automatically notify the technician. Welcome to the smart factory!
The Fourth Industrial Revolution Begins
The Fourth Industrial Revolution (or Industry 4.0 for short) has begun. The steam engine, conveyor belt, electronics and IT are now being followed by intelligent and connected systems. They are fundamentally changing the way we produce things.
In the future, it will be possible to automate most processes along the entire value chain. Machines will be able to communicate with each other and make decisions for themselves. They will use sensors, their sensory organs, to collect data, which is then filtered out before being transferred to a platform. The latter is the brain, so to speak, the place where machine data is combined with information from other sources, such as enterprise resource planning (ERP) applications or the environment. Data is analyzed to allow actions to be derived from it.
Industry 4.0 in Case Studies
Industry Examples 4.0
Until now, most companies have used Industry 4.0 technology to make their production operations faster and cheaper or to reduce waste. They can identify sources of error, for example, by analyzing machine data. An example of this: a European aircraft manufacturer was faced with the question of why such large tolerance deviations occurred when the wings were assembled at its Hamburg plant. The answer was surprising: problems always occurred when the tide fell. The manufacturer discovered that by correlating machine data with environmental data through big data analysis. He was then able to adjust his production accordingly.
Many companies also use predictive maintenance.
They constantly analyze machine data and compare it to past patterns. This allows them to identify the conditions under which problems usually occur and carry out maintenance work before costly downtime is caused. An example is BASF’s plant in Ludwigshafen: BASF has developed an early warning system to enable better maintenance planning of the production plant, pumps, motors and heat exchangers.
Analyzes historical and real-time data, so you can predict when maintenance work will be required. However, the principle of an intelligent factory can not only be applied locally, but machines in different locations around the world can be connected to create a large virtual factory. At Infineon, for example, sites in Asia transfer their test results directly to the plant in Dresden.
Industry 4.0 in the Automotive sector
The automotive sector is also already using Industry 4.0 successfully. Daimler, for example, evaluates machine data to improve the quality of cylinder head production. In this way, managers can detect deviations and irregularities early in the manufacturing process and act quickly. As a result, they reduce the error rate and make the production process more profitable. Volkswagen is following another exciting approach: in an Industry 4.0 project, it uses RFID (Radio Frequency Identification) technology to capture component data in faster test vehicles. The components are already equipped with RFID chips from suppliers. When vehicles are tested, engineers can effortlessly identify installed prototype parts and display the detailed information they need for development.
Industry 4.0 in the logistics sector
In logistics, Industry 4.0 technologies help optimize transportation routes, make perfect use of storage capacities and plan ahead. The port of Hamburg is an example of this. 140 million tonnes of goods are transhipped there every year, a figure that will probably double by 2030. However, there is not enough space in the port. The Hamburg Port Authority therefore faced the challenge of changing containers faster.
People, trucks, containers, ships, cranes and traffic management systems were connected to each other in an Industry 4.0 project. They all communicate with each other and provide business-related data. The result: trucks arrive at their destination faster and drivers know where they can unload their shipment faster. Shipowners can plan their trips in advance. All this has simplified processes, allowing the port of Hamburg to transship goods faster.
Automated production is now a must, not an option
Industry 4.0 does not mean squeezing to the maximum what is technically possible. On the other hand, companies have to digitise their production completely in order to survive in the market, as international competition is intense. Process optimisation and cost reduction therefore become the supreme discipline. Intelligent and connected systems also enable companies to cost-effectively produce smaller quantities tailored to individual customer wishes. This gives them the opportunity to differentiate themselves from low-price suppliers who are pushing the market with mass products.
Demographic change also makes it necessary to optimize production. Our society is aging, while the percentage of people in employment is decreasing. This trend cannot be compensated for by migration either. The German Federal Statistical Office has calculated that the number of people in Germany aged 67 and over will increase by 42 percent to at least 21.5 million by 2040. However, the number of people aged 20 to 60 is expected to decrease by 11. To 25 percent, depending on the immigration rate. Therefore, experts agree: if we want to preserve our prosperity, we must make the world of work more efficient and better deploy the available workforce.
How will Industry 4.0 impact employment?
But what happens to people when machines take on more and more tasks? Many employees are worried about their jobs. Jochen Hanebeck of Infineon’s Board of Directors is not affected by this trend: “Digitization will definitely affect half of all employees. But we don’t see a net loss of jobs. A prominent example is Infineon’s semiconductor production operations in Dresden, where the company manufactures chips in 200- and 300-millimeter wafers. The 300 millimeter line was designed from the beginning for fully automated production, while the older 200 millimeter line has become more automated and connected in recent years.
It now has a degree of automation of around 90 percent. As a result, the site has been able to increase its productivity by 70 percent since it was founded in the mid-1990s. At the same time, the number of employees has remained constant at around 2,000 over the past ten years. Digitization and connectivity have preserved the competitiveness of the Dresden plant, ensured growth and made a key contribution to securing the site’s long-term future.
A study by the Boston Consulting Group also presents an optimistic forecast: Industry 4.0 will contribute 1% annually to Germany’s gross domestic product and create around 390,000 new jobs by 2025. This means that in the future there will be more demand for more complex tasks, especially in the fields of IT, data analysis and maintenance. There will be, predominantly, fewer simple routine tasks. And not everyone will mourn its loss, that’s for sure. After all, having robots hauling heavy boxes means protecting the health of human workers, who will also have more time to deal with more difficult things.
That trend means employees must be willing to continue developing their skills. A successful example is Uwe Häßler: a trained electrician, he began his career as a skilled worker at the mechanical engineering firm Harting Applied Technologies in 1990 and went on to PLC programming in 2001. He now develops Industry 4.0 systems and IT interfaces. “When I started the research project three years ago, all the things mentioned at the time were visions I couldn’t even imagine,” says Uwe Häßler. “At the time I said it would never be possible. Now I’m one of those who says: Yes, it’s possible. And I myself develop visions.”
Beware of hackers
What about security? A legitimate question, given that every connected device offers new targets for hackers to attack. As long as production machines were separated from IT, it was relatively easy to protect them from the outside. However, there are many potential means of infiltration into the connected world of Industry 4.0. Cybercriminals could take control of production plants, manipulate machines or perform industrial espionage. There has already been a small foretaste of that: in May 2017, cryptoworm Wannacry infested, among other things, the computers of the UK National Health Service, the automobile manufacturer Renault in France and Deutsche Bahn. The malware encrypted the systems, temporarily paralyzing them. Hackers wanted to use this to extort a rescue.
To protect themselves, companies must consider security from the outset in Industry 4.0 projects. That includes maintaining state-of-the-art systems and installing security updates. A combination of hardware-based and software-based security solutions can also ensure that connected machines and communication nodes are protected. Examples are Infineon’s OPTIGA TPM chips. They can be integrated into routers, industrial PCs or complex control units and can be used by communication partners as a means of verifying the identity of devices in the network. Thus they are authenticated in the network and protect the data transfer.
Making old machines suitable for the internet
In addition to security, a fundamental challenge facing companies in their Industry 4.0 projects is: How do you get your machines ready for the Internet in the first place? Although suppliers are already offering new devices with integrated IoT modules, very few factories are built from scratch in a green field. They have a production line that has evolved over time and contains machines of different ages. This type of equipment is expensive and cannot be replaced in one fell swoop. While consumers like that we buy a new smartphone or PC every three years, industrial machinery is often used for 20 years or more.
For these older machines to be suitable for Industry 4.0, they must be upgraded with sensors, software and an industrial controller compatible with IoT. The market offers remodeling solutions for that. For example, Bosch Rexroth’s IoT gateway was even able to make a pedal-operated lathe that dates back to 1887 and was ready for the Internet. A sensor controls the speed of the lathe and transfers this data to a mediation device, the IoT Gateway, which in turn is connected to other systems in the company. The person who operates the lathe can see the transferred data in real time on a monitor and therefore know whether to pedal faster or slower to maintain the ideal speed.
The future has begun.
Only about one-fifth of German companies have implemented Industry 4.0 projects so far, according to the recent study “Industrie 4.0 – Wo steht Deutschland” (“Industry 4.0 – Where is Germany?”) by IDG Research Services. However, two thirds of respondents assume that Industry 4.0 will become an important or very important topic for them in the next three years. There is a gold rush atmosphere between hardware and software providers and IT service providers. The industry association Bitkom forecasts that revenues from Industry 4.0 solutions will grow by more than a fifth to seven billion euros by 2018. Jochen Hanebeck, of Infineon’s Board of Directors, believes Germany is in very good shape: “Basically, in Germany and Europe we are well positioned for industry 4.0. We have complete value chains and the ability to make very complex products with the best quality. We are good at doing things.”
What are the opportunities and risks of Industry 4.0?
Industry 4.0 allows companies to optimize their production operations and compete internationally. Data analysis makes all steps of the process transparent. Manufacturing becomes more automated, more flexible and cheaper. Companies can also efficiently produce smaller quantities tailored to individual requirements. At the same time, Industry 4.0 and IoT require a high level of security.