by Nicholas D. Evans

How the Industrial Internet builds on the new platform for digital business

Jan 15, 2016
Digital TransformationInnovationInternet of Things

In a recent article, “Beyond SMAC: The new platform for digital business,” I addressed how eight foundational disruptive technologies — some mature, some emerging — are serving as key elements of a new master IT architecture for digital business ecosystems.

More than just the Internet of Things and big data/fast data/data analytics, the real potential of the Industrial Internet and Industry 4.0 (aka Industrie 4.0) — the German vision for the future of manufacturing — will be realized by the holistic combination of this full set of technology enablers to deliver “dynamic, real-time optimized, self-organizing value chains.”

The vision articulated by the Industrie 4.0 Working Group in their “Recommendations for implementing the strategic initiative INDUSTRIE 4.0” is a useful example to see how these elements all come together in a powerful combination to enable the fourth industrial revolution.

Vision of Industry 4.0

First, a bit of background. “Industry 4.0” was coined by representatives from German industry, research, industrial associations and industrial unions.

The number 4.0 refers to the 4th industrial revolution — the theme of this year’s annual general meeting of the World Economic Forum — and is represented by cyber-physical production systems (CPS) that combine communications, IT, data and physical elements in collaborative inter-company ecosystems. Industry 4.0 specifically focusses on manufacturing, whereas the Industrial Internet is of course focusedon  a broader range of industries.

The vision of Industry 4.0 is to deliver “greater flexibility and robustness together with the highest quality standards in engineering, planning, manufacturing, operational, and logistics processes.” The idea is that customers benefit from faster innovation cycles and individualized mass production (i.e. “lot size 1”), and manufacturers can shorten time to market and optimize and change their processes with ease.

Companies digitizing their manufacturing processes expect to increase flexibility and responsiveness, improve quality and reduce defects, and increase efficiency and reduce costs. In fact, a study on Industry 4.0 by PwC indicates that manufacturers expect to achieve up to 18% in increased efficiency and 14% in cost savings by 2020.

Foundational Technologies

A key aspect of the technology vision behind Industry 4.0 is that it incorporates far more than just IoT components and big data analytics. In fact, it draws on the same set of foundational technologies that you’ll see in many next generation blueprints for digital business platforms.

Some of the key elements include personas and context, social business, mobility and wearables, big data analytics, cloud and hybrid IT, intelligent automation, IoT and cybersecurity, as shown in the figure below. In the illustration, I’ve shown the new platform for the digital enterprise as described in my earlier article and have highlighted the key requirements for Industry 4.0 — as specified in the Industrie 4.0 Working Group recommendations — alongside.

evans industry 4.0 Image courtesy of Nicholas D. Evans

The Industry 4.0 vision clearly taps into all these foundational technologies and more. The ultimate goal from a manufacturing standpoint is to enable continuous resource productivity and efficiency gains to be delivered across the entire value network, incorporating smart factories and smart products, as well as the Internet of Things, People and Services.

According to the Working Group, smart factories are “embedded into inter-company value networks and characterized by end-to-end engineering that encompasses both the manufacturing process and the manufactured product.” Smart products are “uniquely identifiable and locatable at all times. Even while they are being made, they know the details of their own manufacturing process.”

Key Takeaways

One of the key takeaways here is that, while the IoT constitutes a complex ecosystem in and of itself, the full vision of Industry 4.0, and by extension the Industrial Internet, will incorporate an even broader ecosystem of technology enablers.

More than IoT sensors, devices, gateways, middleware, applications and data, it’s important to design for the next evolution of human-machine collaboration and to work in the appropriate technology enablers related to personas and context, social collaboration and mobile applications to enable “unprecedented communications between parts to be created, other components, companies, and end users” in this highly distributed model.

As the Industry 4.0 working group puts it, the vision will be characterized by a “new level of socio-technical interaction between all the actors and resources involved in manufacturing.”

With the broad scope of Industry 4.0, within the logical architecture, there will be many different organizations and partners each providing specific products and services. This will need to include the integration of applications and systems which span the factory floor, controls and automation, manufacturing execution systems, and enterprise resource planning as well as a robust base layer of horizontal capabilities such as ICT infrastructure, cloud technology and services, big data analytics, mobile technologies and security, among others.

Many challenges lie ahead, including sizable hurdles related to security (see “The wild, Wild West of IoT security”) as well as interoperability. Organizations such as the Industrial Internet Consortium are helping tackle these challenges via their reference architectures and test beds and this will help accelerate market momentum.

As these initial barriers to adoption start to become addressed, and with a solid vision and blueprint for the requisite technology enablers to help shape the “big picture,” the next step for enterprise organizations wishing to move to the vision of Industry 4.0 and the Industrial Internet will be mapping out a strategic roadmap for transformation.

It will be interesting to see the outcomes from Davos 2016 in terms of how organizations can begin this transformational journey.