From Tradition to Intelligence - How to achieve Industry 4.0


2016-09-01

Robert Herzner

Industrie 4.0: Germany’s Approach to tomorrow’s Manufacturing

 

At the beginning of the speech, Robert Herzner stated three key factors about Industry 4.0: “Organizations”, “Increasing labor”, and “Efficiency”.




 

Taiwan is a highly-organized country, where labors are already highly-skilled; Thus, “growth of the efficiency” would be the key point for Taiwan to develop Industry 4.0.

 

Comparison between Germany & Taiwan

A comparison chart below shows the difference between Germany and Taiwan. Germany has the area which ten times larger than Taiwan, four times in people, ⅓ in density, and almost double GDP per Capital compared with Taiwan. Germany and Taiwan are important business partners. Taiwan is No.5 for Germany in Asia. The value of the bilateral trade between Germany and Taiwan is worthed 15 billions US dollars.

 
 

Area in km2

35,980

357,121

X10

Inhabitants in Mio

23.4

80.2

4

Density

649

225

/3

GDP per Capital in USD

22,344

41,300

X2

Comparison between Germany & Taiwan

 

Germany Industry 4.0

Industry 4.0 came first 5 years ago at Hannover Messe 2011. As Germany has the strengths of industry production and logistics, combining with digital techonology, Germany has the chance to start developing Industry 4.0 manufacturing.

 

Regards the features of industries, Germany has strong R&D, innovation-driven, and high-tech engineering. However, having high cost of production in the meanwhile, what Germany does is upgrade and increase production quality and productivity by digitalzing the industry, combining engineering and Big Data, establishing a new way of production, and then coming along with new job opportunities and new research fields.

 

Since 2011 Germany had developed Industry 4.0, in 2014 Germany had received significant economic benefits from various industries. For instance, machenical engineering industry had increased 5 percent of revenue each year (approx. 3bn. euro);automobile manufacturing had increased 3 percent of revenue earch year (approx. 4bn. euro);food industry was 3 percent (approx. 2bn. euro);and other industry was 2 percent on average (approx. 7bn. euro).

 

Similar to Taiwan, Industry 4.0 is initiated by the government, and other research institutes. A graph shown below explain how Germany build the platform to develop Industry 4.0.

 

 

Industry 4.0 is a concept

Mr. Robert Herzner stressed that Industry 4.0 is a concept, not a product. You can’t buy an industry 4.0 factory. It’s a concept about interacting, integrating, and merging.

 

Mr. Robert Herzner suggested that we should focus on the demands of the market. Obviously are those most people have already known: “Shorten time to market”, “Increase Flexibility”, and “Boost Efficiency”.

 

An Taiwanese traditional textile company called Everest, mentioned at the speech, has already gained benefits while developing Industry 4.0. Implementing industry 4.0 helps Everest to connect suppliers and customers in more efficient way. Moreover, Everest is being able to manufacture not only general textile, but also technical textile for Boeing 787.

 

Consideration

While having numerous benefits to develop Industry 4.0, there still have some issues that people need to take into consideration.

 

The first is the risk of digitalization. Cybercrime is increasing each year. The second one, from the survey of the German Federal Office for Information Technology Security (BSI) in April 2016, is telling us that 30 percent of companies had IT-security issues. and 60 percent of companies see cyber attacks as an intensified threat.

Michael Hoppe

 

What does Industry 4.0 really mean?



 

Mr. Michael Hoppe stated that Industy 4.0 is a self-organized system; Just like clear traffic rules and guidelines help automobiles to know exactly how they should drive and where they should go. Thus, Industry 4.0 manufacturing is not about top-down rules, it’s about self-optimized production, where each part know exactly what it should react in different situation. At the end, the self-optimized production system will be more efficient than a top-down organization system. Because self-optimized production system is be able to flexibly control the production process.

 

One of the most important concept about Industry 4.0 is both achieve the economic of scale, and the economic of scope. And the basis for doing it is having all the relevant information for production in real time, and connecting instances into production system. In the end, our goal is to create value by integrating self-organization and self-optimized system. And this turns out the internet of things, which talks about smart product, smart service, or smart production; And it’s all about value.

 

Thus, before implementing Industry 4.0, Mr. Michael Hoppe reminds us that we should think about the value. And value is not something only be found when encountering problems. When we talk about Industry 4.0 we are talking about smart solution; Smart solution would be generate value and it turns out to be gross revenue. Take smart production for example, smart production is the application of digitalization to create the value, productivity and efficiency. It can be applied through the sensors, where receiving information from various conditions, then analyzing the data and transfer them into valuable information. These valuable information will send to another machine or human to make correct decissions.

 

Smart production might be able to result in new business model, Mr. Michael Hoppe suggested business owners to think about what business model might be, and how companies would gain revenue from the business model.

 

Why does industry 4.0 come up right now?

Four main forces drive industry 4.0 to come true: “Single Source of Truth”, “IT-Globalization”, “Cooperation”, and “Automation”. The four forces work together to create cooperative productivity; Which increase the efficiency in Human/Human, Human/Machine, Machine/Machine.

 

Another key factor is the evolution of sensors. Sensors today become smaller, cheaper, versatile; Sensors can measure more data and be able to interact together. Previous Big Data is a popular word in industries. Now, to be more precise, we need to transfer Big Data into Smart Data. This require database analyze technology.

 
 
 
 

How can Industry 4.0 be implemented?

 

Mr. Michael Hoppe stated that smart technologies today enable companies to apply Industry 4.0. There are 6 steps included: “Sensors Input”, “Connect”, “Transport/Transfer”, “Data Management”, “Analysis”, and “Action/Output”.

 

Though technology has been ready today, the major problem for business owners is the confusion to find the right value and solution in their production. Mr. Michael Hoppe provides a basic model to help us solve this problem.

 

The model starting with a “Trend” or a “Pain Point” of the production. For example, quality or increased individual product would be the issues. With these issues, listing the jobs or actions that can solve these problems. And the third step would be to start think of the process that can achieve those jobs. Here business owners could bring the concept of Industry 4.0, combine with smart technology to generate innovative production solution.

Adms Chung

 

How much data is “Big Data”?



 

Adms Chung, the CEO of MoBagel, stated that “Big Data” is a popular topic today. Online data analytics technology is well-developed; However, it is just the beginning for offline data, which occupy more the 95 percent of the real world database. For instance, data such as the temperature of current space, who passed in and out of current room, were not recorded to online database yet. Thus, the first difficulty for enterprises to implement data analytics, is lack of database.

 

Internet of Things

Internet of things is not only a technology that allow mobiles to use remote control on machinery. A more important meaning of it is to create smoother communication between machinery and environment. In the past, the emergence of cloud computing release the restriction of time; People can purchase goods online anytime. The mobile release the restriction of space; People can purchase goods anywhere. And the emergence of internet of things, release the restriction of the communication with environment. For example, generally we use air conditioner controller to adjust the temperature of the room; Whiling implementing internet of things, the result from data collection and analytics let air conditioner know your personal preference, it would automatically adjust the temperature into the best condition.

 

The value of internet of things

Internet of things bring a series of value. The first is the manufacture of sensors. According to the information from MoBagel, the market value of sensors gained from internet of things in 2020 is worthed 31 billions US dollars. And the most valuable part in the market of internet of things are “data apps and service” and “data analytics”, which are worthed 262 bilions US dollars. Chung took an example of a retail company. The company purchased lots of sensors and machinery to collect the data of user behaviors. The company analyzed the database, which collected for 7 years, and had increased their revenue in 8 millions Japanese Yen each year; As the company improved their service and quality according to the output of the data analytics.

 

Why we need Industry 4.0?

With numerous benefits, why there still have so many enterprises haven’t applied Industry 4.0 yet? Chung shared his perspectives; Chung stated that most companies implementing Industry 4.0 are affected by the market; They are facing customers with high quality and diverse demand, pushing these companies to develop Industry 4.0. Chung took an example of a contact lens manufacturer in Taiwan. Fashion contact len industry in female market are facing a challenge; Female require more styles of lens, where high quality is required at the same time, as slight defects in contact lens is not allowed at all. This manufacturer successfully implemented the idea of Industry 4.0 and overcame the challenge from the market. Today the company has owned the highest market share in Taiwan.

 

This development process showing the market is changing gradually. As there still have large portion of customers in traditional market. Industry 4.0 won’t be the same as previous industry revolution, it is a slow progress, Chung indicated.

 

Why we need data analytics?

Chung mentioned that we can’t simply use intuitive to improve quality. However, there still have numerous companies relying “masters” on quality inspection. Sometimes these “masters” are reliable, sometimes aren’t. Often defects are not easy to be observed. Another problem of this operation is the alternation of generation. That’s why many companies in Taiwan and Japan still using “mentoring” in their management system. However, market changes are getting faster. How these masters can sustain the rapidly changing market? This is a problem of the limitation of human being, which lead to the reason why companies need to apply data analytics; We need more objective information to oberse and to solve problems.

 
 

6 steps in Industry 4.0 implementation

“Manufacture Automation” “Data Collection Automation” ”Vision-Based Monitoring” “Data Selection” “Analystic” “Feedback and Improvement”

 

Chung mentioned the 6 steps required in Industry 4.0 implementation. These steps exposed the first difficuly most companies faced: “Manufacture Automation”. “Manufacture Automation” is about Industry 3.0. Most companies actually haven’t applied this process yet. Foxconn, a huge Taiwanese multinational electronic contract manufacturing company, is still at the progress of tranforming the company into Industry 3.0. Foxconn is trying to apply Industry 3.0 to reduce the demand of labors.

 

For the progress from Industry 3.0 to 4.0, the first thing needed to be done is the collection of database. For instance, defection rate, changes of parameters, or temperature and humidity. With the following data analytics, we can understand why some specfic good having bad quality, which factor causing the result and so on. “Vision-Based Monitoring”, Chung stated, provides immediate monitor, which would show alert when the data is abnormal. Also, from the large amount of database, companies will start to know what important parameters are. Then these parameters could be anayzed and provide useful information for improvement.

 

Conclusion

Chung stated that many organizations are actully trying to implement Industry 4.0. However, as previous stated, the difficulty of the progress is the incomplete of Industry 3.0 and the data collection. Thus, for organiztions setting goals on Industry 4.0, Chung suggested these organizations could implement these two goals first.
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