The fourth coming: how Industry 4.0 will transform the world

Dramatic changes are taking place in manufacturing at exponential speeds, where digital and physical technologies are converging and creating new ways to manufacture. The Germans refer to this as 'Industry 4.0', the fourth industrial revolution, which includes the Internet of Things (IoT). 

Allen Proithis, North America president at Boston-headquartered Sigfox, a leading provider of IoT connectivity, says Industry 4.0 is causing “a lot of hype”. “People tend to write about applications,” he says, “but 80% of the opportunities are actually enterprise and industry. Enterprise is really controlled by data solutions.”

Accelerating IoT

Communication operators have an excellent opportunity to act as enablers of the transition towards Industry 4.0. In February, Sigfox and Telefónica announced a global deal to integrate Sigfox’s low-powered connectivity into the operator’s managed connectivity platform. The deal, set for several millions of connections, is part of Telefónica’s global strategy to accelerate IoT innovation. 

“You now have data coming together that one could have never imagined,” says Mr Proithis. “This drives cost out of business, creates revenue streams and allows for more regulatory compliance.”

Germany is the global leader in Industry 4.0, where manufacturers are embracing the revolution. For example, Audi is introducing a smart factory where cars are made by robot-driven modular assembly, and is using virtual reality headsets and 3D printing to improve production efficiency.

In 2014, Germany introduced its technology network 'It’s OWL' short for Intelligent Technical Systems OstWestfalenLippe. An alliance of 174 businesses, universities and other partners, It’s OWL is considered to be the largest and most concrete project in the context of Industry 4.0. 

Germany laid out a roadmap for public, industry and academic collaboration in its digitisation of industrial processes with €40bn invested every year by 2020. “Applying the same investment level to the European industrial sector, the annual investments will be as high as €140bn per annum,” says PricewaterhouseCoopers.   

Connectivity reigns

Industry 4.0 is not just about next-generation manufacturing. Its connectivity benefits logistics and supply chain management, and everything from mining and offshore drilling to smart grids, smart cars and building automation.

Bangalore-headquartered Mindtree, a global consultancy specialising in corporate IT services and solutions, is building IoT systems for customers spanning hardware and software that harmonise across different industrial protocols and systems. 

“These are machine-learning models that enable the company to analyse and make sense of this data,” says Srinivas Rao Bhagavatula, Mindtree’s associate vice-president at the company’s Florida office. “These machine-learning models will then be used to create decision engines that can optimise production, predict and prevent equipment failure, and ensure safety.”

Mindtree’s manufacturing customers see Industry 4.0 as a game changer in the agility of manufacturing and planning processes, equipment efficiency and uptime, and safety.  

Such benefits are being realised by Exactech, an innovative orthopaedic device company also located in Florida. It utilises Industry 4.0 to assist in manufacturing custom hip, knee, shoulder and spine systems, biologics, bone cement and spacers, and employs Industry 4.0 also by converting information into medical device solutions such as prototypes. 

“Industry 4.0 is making us more efficient and helps us to grow in sustainable manner,” says Exactech senior engineering manager Ryan Loftus. “If a surgeon has trouble with a procedure, we come up with solutions. Sometimes that solution is a special instrument, customised tooling that helps with the work flow.” 

Global connections

Meanwhile Airbus is taking Industry 4.0 to the skies, using ubiquitous connections made possible by the IoT. “Industry 4.0 provides us advantages by using additive manufacturing, 3D printing, advanced analytics and big data in a cloud and service platform,” says Pierre Jaffre, president, Asia-Pacific, at Airbus Group. “That platform is augmented by human and robotics mobility. By using digital technology, we can work with people around the world on specific projects.”

Airbus Group recently signed a memorandum of understanding (MoU) with Singapore’s Economic Development Board to develop technologies to improve the efficiency of aircraft maintenance, repair and operations. Dubbed the Future Hangar Initiative, the goal is to explore new technologies from a complete scan of an aircraft when it rolls into the hangar to digitalised inspections and using 3D printers to make spare parts on site. 

Spin-off company InFactory Solutions is assisting Airbus with its Factory of the Future vision by delivering solutions for more automated, connected and intelligent manufacturing. The start-up, located in Ottobrunn, Germany, focuses on sensor systems, data analytics and engineering consulting services, and is responsible for inventing a sensor system that, when applied directly to Airbus’s automated fibre placement production, monitors the quality of composite production.  

Airbus’s plant in Illescas, Spain, will be the first to deploy the system this year for A350 XWB production. Airbus Helicopters in Donauworth and Premium Aerotec in Augsburg will also commence operations with the sensor this year.

Government efforts

To expand their footprints, Germany and China are moving forward with their October 2014 agreement to intensify co-operation on developing Industry 4.0. In July 2015, an MoU was signed to politically support co-operation between German and Chinese companies in the areas of intelligent manufacturing and interconnected production processes. Since then, both governments have been working on standards. In January 2016, an agreement was made to promote co-operation in the fields of intelligent manufacturing and smart services.

China has set forward its China 2025 plan to turn the country into the global manufacturing innovation centre by prioritising the development of intelligent manufacturing. 

The first Sino-German Symposium held in December 2016 underlined the significance of Industry 4.0 for bilateral economic relations. While 20 Sino-German co-operation projects were presented at the symposium, Matthias Machnig, state secretary at the German Federal Ministry for Economic Affairs and Energy, said: "We must also remove barriers for companies and lay the foundations for long-term co-operation by creating a level playing field. In the field of Industry 4.0, it is particularly important to guarantee secure and reliable communication between companies."

Dr Georg Schütte, Germany's state secretary at the Federal Ministry of Education and Research, said his ministry's strategy on China is “to serve as a common basis for the development of innovative solutions for global challenges, including energy supply, electric mobility and the health industry”.

The Thai and German governments are also co-operating to upgrade Thai industry to Industry 4.0 via the Thai-German Institute located at the Amata Nakorn Industrial Estate near Bangkok. Here, concentrated efforts centre on robotics training.

The right conditions

Countries around the globe are setting up Industry 4.0 initiatives in an effort to create the conditions for it to thrive. With a basic plan laid out for the future of Indian manufacturing, consultants at Frost & Sullivan are examining whether or not India can instigate its own version of Industry 4.0. Meanwhile, Japan – realising its own highly praised manufacturing model risks being outclassed – launched an Industry 4.0 initiative in 2015 to create technology standards.

The Portuguese Ministry of Economy has also launched a national initiative, Portugal i4.0, to identify industry needs and guide private and public measures to accelerate Industry 4.0 adoption. The goal is to promote domestic companies as i4.0 players and make Portugal an attractive place for investing in Industry 4.0.

Other initiatives are ongoing in Europe, notably France, Spain, Italy, the Czech Republic, Denmark, Finland and Sweden. In April 2016, the European Commission announced plans to invest $136bn to create a EU digital single market. The idea is to encourage EU members to pool resources to invest in the IoT.