#3

Subcontinent of extremes

Nowhere else in the world are modern and archaic traditions likely to collide as forcefully as in India, this year's partner country to the Hannover Messe. No nation has as many highly qualified programmers – while the bulk of the population can only dream of an education and the participation of the rural populace in the country's social progress remains a distant goal.

INDUSTRIAL TREND

IndiA

#4

By the middle of the century, at the latest, India will be the most populous country on the planet, with more than 70 percent of its inhabitants of working age. By contrast, China – as a consequence of its rigid family policies – will have to live with an increasingly aged society. The prospects for India are outstanding if it manages to improve its education and health care systems on a sustained basis, and if bureaucratic obstacles or social structures no longer stand in the way of foreign investment and continued industrialization.

#5

Outside the box

Every company lays claim to being an innovator. But innovations require a break with tradition. And here it gets complicated. That's because it becomes necessary to call things into question and do things differently than in the past.

INDUSTRIAL TREND

open innovation

#6

As a result, most innovations emerge neither in R&D departments nor within the framework of research contracts. Instead, the most fertile sources of innovative impulses are frustrated users of inadequate products. They mostly stay behind the scenes and often cook up their own solutions. On occasion, their concepts lead to products that we can hardly imagine doing without in our daily life today. The Internet and global networking are now giving companies the opportunity to engage in dialogue with creative users and to learn from them. There are a couple of key conditions if they want to derive innovations from these potential external ideas – intensive listening and an openness to new thoughts coming from outside their own box.

6 Questions to

Dieter Schäfer

Chief Operations Officer (COO) Freudenberg Sealing Technologies

Mr. Schäfer, everyone is talking about Industry 4.0. What is your vision of the fourth industrial revolution? Not only have we been watching this development with great interest for years, we have already introduced various elements of Industry 4.0. For example, we already have self-management processes at our Schneegans subsidiary. Here, machines communicate with one another and optimize their respective parameters, but networking within the process still takes place internally. We use open interfaces only for communication with the tool setter. Status information or problem reports are sent directly to his smartphone.

Is industry 4.0 creating smart products in addition to smart factories? Industry 4.0 is changing products and services, too. A Simmerring® with condition monitoring can detect possible malfunctions or disruptions in advance, before a machine comes to a stop. This is of major importance, especially for wind turbines, offshore parks and crucial systems that are hard to access.

It's good to have the right part in your inventory. That's correct in principle, but it's our job to achieve maximum flexibility instead of relying on costly warehousing. Freudenberg Xpress is our answer to the situation. We are in a position to offer our customers highly individualized, specific product solutions and manufacture them precisely to their requirements without any loss of quality and in the shortest possible time. Manufacturing of the future will generally be subject to stringent requirements. They must be intelligent, alterable, efficient and sustainable. We can already execute this very well at Freudenberg Xpress and thus provide customers with ideal support. 

"Networking accelerates

innovation"

Would you actually talk in terms of a revolution? We see Industry 4.0 rather as an evolutionary process. A high degree of automation and stable processes are the basic prerequisites. If both are present, we can implement self-management. For the next step, which is networking with customers and suppliers, the prerequisite is a standardized, mutual language for the machines. But this will happen gradually and certainly not based on a schedule for the entire company. With our diversified and decentralized production, we have excellent options for introducing something in one location and learning from it at other facilities. In the end, the competitive strength of a company will increasingly depend on its capacity to network closely with all the market participants involved in its production process.

In your view, what barriers MUST STILL be overcome?  The demands for greater speed, flexibility and individuality, all the way down to batch size 1, are naturally a huge challenge for a company that produces about 400 million seals a month and offers more than 300,000 different products with delivery times of up to six weeks. Above all, absolute data security must be guaranteed. With open interfaces, you are relinquishing access to your innermost workings – you have to ensure ahead of time that your data are just as well protected against misuse as in a purely internal process. In addition, the data network must be faster and more stable overall. The more communication takes place over the network, the less we can afford breakdowns. The trend is unstoppable. According to experts, the number of devices and machines networked with one another will face rapid growth by 2020.

If innovation cycles are shortened due to networking, what effect will this have on Freudenberg Sealing Technologies?  We are relying on continual, systemic and efficient innovation management, which helps to set us significantly apart from the competition – across all industries. We do not consider innovation to be a selective snapshot. Instead, it involves ongoing optimization and development. We are also putting all our processes and procedures to the test again and again. Innovation is our core competency. We are very confident in this respect. And we have already been practicing one of the main requirements of Industry 4.0: close cooperation with all partners. We see ourselves as a solutions provider that meets new challenges and makes changes in concert with its partners.

Industry 4.0

Since at least Hannover Messe 2011, the phrase 
on everyone's lips has been "Industry 4.0" 

The digitization of classic production is expected to bring a decisive increase in value creation and serves as a catchword for the fourth Industrial Revolution. But as prevalent as the issue is in the media and as clearly as numerous studies have documented it, the path to implementation is still long and rocky. Here ESSENTIAL attempts to pin it all down. How far are we from Industry 4.0?

On the eve of the revolution

Over the centuries, people's lives hardly changed – and within an individual lifespan, they barely changed at all. Agricultural techniques and artisan skills lasted whole eras, as did social structures. But that has changed. When an 80 year-old today looks back on his life, it seems the face of the world he lives in is hardly comparable in many aspects with what he knew from his childhood. Mobility, media and personal circumstances: nearly everything has been subjected to rapid change that sometimes seems hard for the individual to grasp. Education and enlightenment have been the decisive impetus for profound change.

In the beginning
there was the book

The beginning of a massive social revolution can be dated to the mid-15th century. Johannes Gutenberg of Mainz invented printing with movable type – a prerequisite for producing and distributing writings in large numbers. In 1997, the famous American magazine "Time Life" called Gutenberg's invention the most significant discovery of the past millennium. In late 1998, American journalists even bestowed the title "Man of the Millennium" on Gutenberg in their book "1000 Years - 1000 People".

In 1517, without the new communication technology, it would have been virtually impossible for Wittenberg monk Martin Luther to publicize on a large scale the contradictions between the contents of the Bible and social conditions. Starting in the 16th Century, the Reformation cleared the way for the Enlightenment – the spiritual and social reform movement that changed mainly Europe between 1650 and 1800, but altered North America as well. The core idea of the Enlightenment was to overcome all the structures hindering progress by thinking rationally. Education was a central element. And it was not only rationality – reason – that became increasingly important; so did the rationalization of value-creating processes. This was an absolute necessity in view of the rapid population growth as well as the growing size of cities, with all their associated problems of supply and disposal.

The first Industrial Revolution – water power and weaving loom

Historians agree that, in the time since the 10th century before Christ, during the transition from nomadism to sedentary life, people's lives did not change as much as they did during the first Industrial Revolution. It took hold in the second half of the 18th century and developed massive momentum during the 19th century. Water and steam power replaced many aspects of physical work. Mechanization allowed division of labor and thus the start of industrial production, the symbols of which are the steam engine and mechanical loom. The textile industry went through a massive upheaval at the start of the 19th century, with manufacturing in numerous small workshops increasingly transferred to large factories. Social unrest was one consequence of this development: 250,000 English handweavers bitterly resisted the introduction of mechanical looms and even burned down factories.

THE MECHANICAL LOOM –

the epitome of the first Industrial Revolution 

Second Industrial Revolution – electricity and research

The second Industrial Revolution, which began around 1880, bears the stamp of the chemical industry and electricity. Company-owned research laboratories emerged for the first time. They transferred their physical and chemical findings – including new substances and materials – directly into development and production process. If the first Industrial Revolution basically made familiar items such as textiles less expensive for the most part, the second Industrial Revolution created entirely new products thanks to the systematic implementation of newly acquired expertise. Furthermore, modern mechanical engineering enabled the production of complex systems such as the first automobiles. Even the production process itself increasingly became an object of research. The introduction of the assembly line and thus mass production gave many people access to products that had earlier seemed beyond their reach. 

In addition, the second Industrial Revolution introduced unprecedented growth in the world's population. Between 1750 and 1920 – that is, within 170 years – it grew from 1 to 2 billion people, and it has surpassed another billion mark roughly every 12 years since the 1960s.

ASSEMBLY LINE PRODUCTION AND ELECTRIFICATION 

were typical of the second Industrial Revolution 

The third Industrial Revolution – the microchip makes its debut

The third Industrial Revolution is also known as the digital revolution, the symbol of which is the microchip and its steady increase in output based on Moore's Law*. Steady improvements in microchips have enabled the growing automation of production, the establishment of global communication networks and the digitization of all information available worldwide. In 1993, only about 3 percent of all information storage capacity was digital. The assumption today is that it is nearly 100 percent. Since the start of the third Industrial Revolution – roughly the mid-1980s – computers have not only continued to gain importance in the professional arena, it is no longer possible for people to conceive of their personal lives without them. The proliferation of computers has led to completely new approaches in entertainment, science and consumption. Within just a few years, completely new industrial sectors and companies have emerged. It is not unusual for their share prices to surpass those of old, established companies many times over.

Phenomena such as globalization or a globe-spanning youth and pop culture would be inconceivable without the achievements of the third Industrial Revolution. But even political processes have changed due to digitization. Without social networks, there would have been no Arab spring. But the positive aspects are countered by the negatives: worldwide networking quickly leads to an undesirable transparency – and it has nearly made the threatening vision of the transparent human being or the transparent company a reality.

* This law, formulated by Gordon Moore in 1965, stated that the computing power of newly developed microchips doubles every 18 months. 

ELECTRONICS MADE THEIR WAY 

into the third Industrial Revolution 

Industry 4.0 – 
the smart factory 

The term "Industry 4.0" made its debut at Hannover Messe 2011. It stands for the concept of an intelligent factory that stands out for its interactivity, capacity to transform itself, resource efficiency and ergonomics. It is accompanied by greater complexity in the entire value creation process, from development to delivery, including the incorporation into the process chain of customers and partners. What mainly differentiates Industry 4.0 from conventional processes is that products and production systems become intelligent and networked.

To this end, the smart factory incorporates the Internet. All the machines and people involved in the production of a product communicate with one another. Smart products can – thanks to embedded microchips – exchange information with production facilities and suppliers. They also know their current processing status as well as the production steps and additional components that are needed before they achieve their final form. Smart production systems know their capabilities and can plan their capacity based on the current order situation. In a smart factory, the "Internet of Things" is more than an improvement of existing IT support processes, it takes advantage of huge data quantities ("Big Data") that are available on the Net and analyzes sequences and effects – which previously could not be captured – with highly complex algorithms. This results in a self-learning system that continually optimizes the decisions of largely autonomous subsystems. Industry 4.0 creates the conditions for individualized, self-governing decentralized production.

Small batches – and
enormous flexibility

Industry 4.0 – also a
service issue

In a practical example at Hannover Messe 2014, Festo Didactic and SAP jointly presented an 8.6-meter-long production facility where workpieces told machines how they should be processed. Two completely different product groups were assembled – a remote control unit and electronic smart-meter components. A number of product variations were also possible. The workpieces communicated with the equipment via RFID, or radio frequency identification. This consistently enabled them to move to the right station, identify themselves as a certain part or version and communicate the right processing order. In this way, it was possible to produce various versions in any given sequence and volume on a single production line. The example demonstrated that batch-size 1, meaning the production of precisely one product with an individualized customer configuration, has moved into the realm of the feasible. 

The smart factory combines the most advanced equipment technology with a cloud-driven system for order administration and production control. This ensures a high level of flexibility for order changes, a mix of variations or the required process adjustments. Regular self-tests increase equipment availability. In the event of a disruption, the system automatically notifies a service technician by SMS and simultaneously cites its cause.

In addition to production facilities that are fit for the future, Industry 4.0 enables "smart service" – proactive maintenance and repairs. Normally, machines or production facilities are maintained at regular intervals or when a disruption occurs. Unplanned disruptions or equipment breakdowns lead to huge costs. For a facility operator, it would be hugely advantageous to be able to calculate predictions for equipment breakdown. This is possible with the complete vertical integration of measurement data into the machine cloud and into service processes. A multitude of collected data – from similar machines under similar conditions of use – can be analyzed in the cloud in real time. If the machine reaches critical values, a specific repair or service order is generated. Thus, an integrated system reduces both unplanned machine breakdowns and maintenance costs.

The example shows that Industry 4.0 is more than just a smart factory – it also means smart products. That's because a machine component built according to Industry 4.0 principles not only knows when it needs maintenance. Since it knows the history of its production and its prior use, it also knows what replacement part the technician has to provide when it is needed. In any case, the notion of networking makes the smart factory an important component of future intelligent infrastructures. The "Internet of Things and Services" also includes the smart grid, smart mobility, smart logistics and the smart home – the intelligent, networked house.

How far along 
is industry?

New business models

New cooperation and business models are emerging within the framework of Industry 4.0. They will make it possible for small and medium-sized companies to use services and software systems that are currently barely affordable due to existing licensing and business models. Industry 4.0 scenarios, such as "networked production", "self-organizing, adaptive logistics" and "customer-integrated engineering", require concepts implemented by a highly dynamic network of various partners, not generally by a single firm as in the past. The main requirement is integrated engineering that encompasses both production as well as the manufactured product and that intermeshes seamlessly within the digital as well as the physical world. This tends to reverse the centralizing structures of the first Industrial Revolution. Networking enables decentralization – with all its associated advantages.

On the eve of the revolution, a question arises: What role will people and companies play in this? In a study by Staufen AG, which surveyed 140 industrial companies for the "German Industry 4.0 Index" during August of last year, it became clear that many firms still cannot precisely assess their role in this field. More than two-thirds of the companies have either not yet dealt with the issue or, at best, find themselves in an observer role. 14 percent of the surveyed firms have started individual projects – but only one percent says they have comprehensively implemented Industry 4.0.

Of the companies dealing concretely with the implementation of Industry 4.0 concepts, more than 90 percent are focusing on manufacturing. Research and development as well as logistics and warehousing are also priority fields. All other fields hold little importance to the companies. Logistics in particular are presumed to offer great potential, especially when it comes to flexibility and deadline performance – even ahead of costs and product quality.

Qualifikation als Wettbewerbsvorteil

Many studies have shown that the number of uncomplicated jobs that exclusively involve routine activities has been in decline for years. Industry 4.0 will accelerate this trend – that is the assumption at least. In fact, 85 percent of the companies surveyed assume that the number of highly skilled jobs in their company will grow in future. While small and medium-sized companies are calculating a net increase in jobs, 61 percent of large companies are assuming that the number of jobs overall will decline in the course of Industry 4.0. In particular, there will no longer be a need for low-skilled workers.

But there is a need to catch up. The companies only give themselves mediocre grades when it comes to preparing their employees for the transformation. According to their employers, only about 45 percent of employees in manufacturing know what will be asked of them in the future. In the logistics and warehousing areas, the figure is just 14 percent. So far, 70 percent of companies are not even offering training on Industry 4.0. A mere 11 percent of companies are dealing with the issue in existing continuing education programs, and just 5 percent offer special training on it. 

Active engagement with Industry 4.0 issues is urgently needed to prepare individual companies for the future. This is the conclusion drawn by the Industry 4.0 working group of the German Ministry for Research and Technology. Its final report recommends that, in light of a looming shortage of skilled workers, it is important to maintain the productivity of older employees over the course of a long working life. In the work processes of the fourth Industrial Revolution, it is true that employees can focus on creative, value-adding activities and that they are unburdened from routine tasks due to smart assistance systems. Flexible work organization also makes it possible to better combine a career, private life and continuing education. A harmonious work-life balance is the result. In addition, Industry 4.0 makes it easier to manage demographic shifts.

What is everyone else doing?

United States

Germany is one of the most competitive industrial centers and German companies lead the world in the field of factory equipment. Not least of all, this is related to a specialization in the exploration, development and manufacturing of innovative production technologies as well as the capacity to control complex industrial processes. Other crucial factors are its strong equipment and plant engineering, its considerable IT expertise and its know-how in embedded computer systems and automation technology. Germany has an excellent foundation to expand further  its leading position in production technology.

But the global competition in this field has grown as other countries have recognized the trend toward the use of the Internet of Things and Services in industrial manufacturing.

The United States is trying to counter its deindustrialization with promotional programs for the Advanced Manufacturing Partnership (AMP). The AMP steering committee, consisting of presidents of the country's top engineering universities and CEOs of leading U.S. companies, has initiated the National Network of Manufacturing Innovation (NNMI). The network, conceived as a series of public-private partnerships, has the goal of making U.S. companies more competitive and increasing investments in U.S. production facilities, functioning as regional centers for manufacturing excellence. In addition, the National Institute of Standards and Technology, which is responsible for standardization processes, handles the Advanced Manufacturing Portal. It was set up at the Advanced Manufacturing Partnership's recommendation and is designed to ensure the networking of governmental, university and private initiatives in this area.

China

IndIA

China is also striving to expand its machine-tool sector. According to its 12th five-year plan (2011-2015), the country's dependence on foreign technologies is supposed to be reduced in seven "strategic industries", including high-end equipment manufacturing and new-generation information technology. At the same time, the country is supposed to take the technological lead in these sectors.

To accomplish this, Chinese leaders are making a total of 1.2 trillion euros available and are stimulating supply and demand with subsidies, tax relief and other incentives. The share of expenditure on research and development (R&D) should rise from 1.2 to 2.0 percent of gross domestic product. In machine-tool manufacturing, the focus is on the development of smart production equipment, smart control systems and digitally controlled machines. Efforts in the IT area are centering on the Internet of Things and its applications, among other topics.

An "Internet of Things" conference has been held annually in China since 2010; China's first IoT center was opened at its start. Promoted with 103 million euros, the center is devoted to the exploration of basic IoT technologies and the associated requirements for standardization. Wuxi in Jiangsu province is considered China's "IoT" innovation zone. It is home to 300 companies with more than 70,000 employees. In all, the Chinese government intends to invest 705 million euros in the IoT industry.

India's five-year plan (2012-2017) focuses on the promotion of innovation and predicts an increase in governmental and private R&D spending to 2 percent of the country's economic output. In 2011, its Cyber-Physical Systems Innovation Hub was launched under the backing of the Ministry of Communication and Information Technology, which, among other things, conducts research on humanoid robotics. In November 2011, Bosch founded its Centre for Research in CPS in Bangalore. Top Indian research centers and the Fraunhofer Society are participating in this project in a consulting role. The goal of the collaboration is to create the optimal research and work environment for the IT specialists of the future. A total of 22.8 billion euros has been made available for it. In future, research contracts are expected to support industry and science. In an international comparison, a current study by the Zebra Tech firm found that Indian firms are in the lead in the introduction and application of IoT technology.

What needs to happen?

All the studies and surveys suggest that industrial production is facing a paradigm shift. But – on the eve of the revolution – is not clear to everyone where the journey is headed. Industry 4.0 needs the right general conditions to support implementation. The final report of the Industry 4.0 working group identifies eight areas that may be crucial factors determining whether people and companies are among the winners or losers. 

Standardization of the reference architecture

Networking across companies requires common, uniform standards. A reference architecture is needed for their technical description.

Mastery of complex systems

Since products and production systems are becoming more and more complex, engineers must have special methods and tools at their disposal to develop adequate planning and explanatory models.

A comprehensive broadband infrastructure for industry

High-quality, fail-safe and comprehensive communication networks are an indispensable prerequisite. For this reason, the broadband Internet infrastructure must be massively expanded.

Security

The risk of unauthorized access also rises with networking's growth. Integrated security architectures and explicit, counterfeit-resistant proofs of identity are therefore critical to success. But operational security is also an enormously important aspect.

Work organization and structuring

Real-time-oriented control is changing job content, processes and environments. The participation of employees in work structuring and reference projects designed as models are important keys to success.

Training and continuing education

Along with job-related continuing education, appropriate employee training strategies and a work organization that promotes learning are necessary to accommodate changes in jobs and competency profiles. 

Legal framework

The legal challenges largely involve the protection of company data, but there are also issues relating to liability, trade restrictions and the handling of personal data.

Resource efficiency

Processes based on Industry 4.0 must provide proof of improved resource efficiency.

If a systematic approach succeeds with the solidarity of all participants, the available base technologies can be adjusted and innovative solutions to new facilities and markets can be developed. The revolution requires an evolutionary process, the potential of which should rapidly become transparent with reference and demonstration projects. Industry 4.0 can only be implemented if society and technology advance hand in hand – on the way to a sustainable and humane industrial future.