Industrie 4.0: How CIOs can prepare for the fourth industrial revolution

Industrie 4.0 is a German-government-sponsored vision for advanced manufacturing.

A new report from Gartner, however, highlights why CIOs outside manufacturing need to consider the term that is also linked to the 'fourth industrial revolution'.

The reference comes from the fact that Industrie 4.0 follows water/steam power, mass production and automation through IT and robotics.

Industrie 4.0 introduces the concept of "cyber-physical systems" to differentiate this new evolutionary phase from the previous electronic automation, says Gartner.

Its underlying concept is to connect embedded systems and smart production facilities to generate a digital convergence between industry, business and internal functions and processes.

“Industrie 4.0 encompasses many technologies and business designs, including the Internet of Things and digital business, but is not synonymous with, or a replacement for, any one specific technology,” says Steve Prentice, research vice president and one of the authors of the report.

Although Industrie 4.0 starts with advanced manufacturing, the ultimate impact will transcend into other segments including utilities and smart cities — where, at some point, production activities will be coordinated (or even suspended) to accommodate increased energy demand within the smart grid and other elements of the smart city.

These touch the development of new IT- and technology-centric education and work opportunities, as well as the development of real-time data that will operate and manage broadband information and communication technology infrastructure, buildings and traffic systems.

Industrie 4.0 encompasses many technologies and business designs, including the Internet of Things and digital business, but is not synonymous with, or a replacement for, any one specific technology Steve Prentice, Gartner

Every industry that is becoming more automated, more data-driven or that deploys more technology, will be caught up under Industrie 4.0, according to the report by Prentice and other Gartner analysts Simon F Jacobson and Bettina Tratz-Ryan.

The report says anything that is connected to the Internet, or that produces data (or consumes it) to optimise operations and generate value is a potential target.

“As such, current trends such as the Internet of Things, big data, predictive analytics and the full scope of digital business (the generation of new business value from the confluence of people, business and things) are inextricably entwined with Industrie 4.0."

Related: Time to shift to ‘analytics of things’

The report lists some way to prepare for this trend:

• Combine data from both internal and external sources to improve decision-making in creating feedback loops to improve product and process designs.

• Develop the competencies (and mutual trust) to better integrate information and operations technologies within the organisation, including the integration of security and risk management across these two domains. ·

• Do an inventory of existing IT support for manufacturing and identifying where further digitalisation is needed.

• Understand how the underlying technologies of Industrie 4.0 may impact the localisation of manufacturing operations (rather than globalisation) to determine the optimal trade-offs between cost, innovation and supply.

• Work toward concurrently developing smart products and smart manufacturing processes, but on a focused and incremental basis where the investments can be clearly justified and the benefits are clearly apparent.

Challenges ahead

The path to Industrie 4.0 will require high levels of alignment integration of both data from multiple sources and processes and cultural factions within an organisation, reports Gartner.

Further integration will also be needed across the diverse manufacturing and value creation chains, from product design and development through just-in-time and "lean" manufacturing into the distribution chain.

Simultaneously, vertical integration between the various organisational functions (“plan, source, make and deliver — not to mention sales and marketing”) will be necessary, the report states.

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Copyright © 2015 IDG Communications, Inc.

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