Industry 4.0 and the "Internet of Things and Services"

Industry 4.0 refers to the fourth industrial revolution. Following mechanization (Industry 1.0), mass production (Industry 2.0) and automation (Industry 3.0), Industry 4.0 has now created a new industrial revolution through the concept of the "internet of things and services." Industry 4.0 technologies have the potential to create extraordinary growth opportunities and competitive advantages for Germany, and the foundations of this new industrial paradigm were laid in that country. Experts estimate that businesses can increase their productivity by approximately 30% using Industry 4.0. Industry 4.0 can be thought of as the interaction of machines with each other and with people. But how does it work? We will try to explain this in this article.

Social Machines

Smart machines share information with each other just as people do on online social networks. They can organize themselves independently, working together to coordinate processes and deadlines. This makes production more flexible and efficient. Additionally, these machines communicate directly with all IT systems within the company. This ensures seamless information flow to areas such as sales or development. The backbone of this information flow is, of course, the Internet of Things and Services.

"Internet of Things and Services (IoT)"

The "Internet of Things and Services" (IoT) is becoming an increasingly important topic in industry and virtually every aspect of our lives. It is a concept with the potential to affect not only how we live, but also how we work. What exactly does the "Internet of Things" mean? Let us explain briefly.

What is IoT?

Fundamentally, it is the concept of connecting any device to the Internet (and/or to each other) with an on/off switch. This can include virtually any product you can imagine, from cell phones and coffee machines to washing machines, headphones, lamps and wearable devices. This also applies to machine components, such as a jet engine in an aircraft or a drill in oil equipment. Analytics firm Gartner claims there will be over 26 billion connected devices by 2020. That is a huge amount, meaning trillions of connections and data transfers. IoT is a massive network of interconnected "things" and also includes people. Networks of relationships occur between people-people, people-things and things-things. Broadband internet is becoming more widespread, connection costs are dropping, More devices are being created with Wi-Fi capabilities and integrated sensors, technology costs are declining, and smart phones are now in everyone's hands. All of this creates a "perfect storm" for IoT.

How Does It Work?

The new rule for the future will be "everything that can be connected will be connected." But why is it desirable for so many interconnected devices to communicate with each other? There are many examples of what the potential value of this could be. For example, suppose you are going to a meeting; your vehicle could access your calendar and know the best route. If traffic is heavy, your vehicle could send a text to the other party informing them that you will be late for your appointment. Your office equipment knows when consumables will run out, can automatically place orders, and can save you from an important hassle and time loss. Each smart product holds data about operating conditions and product status. This data is stored in devices like small RFID chips and provides a virtual copy of each smart product. Such information is collected, updated and evaluated throughout the product's lifetime, from the initial production stage through actual customer use and back to recycling. Before production begins, a product knows about the buyer and order information, its current status and the production stages required to transform it into a finished product. You can do things like tell machines what shape it needs to take or whether it needs to be painted in red or blue. Customers can be part of the process and get more personalized products, while production costs remain the same or decrease.

Smart Services

Industry 4.0 is not limited to factories. After all, smart products do more than actively control their own production processes. Once delivered to customers, they serve as a platform for new business models. In the future, there will be billions of smart products connected to the internet throughout their useful lives, accumulating large amounts of data (big data) about their operating conditions and product status in the cloud. All the data they collect can be used to optimize the products. Moreover, smart algorithms can link existing data to new information (smart data). They provide a foundation for offering customers personalized, data-driven services (smart services) in addition to the physical product. For example, operators of diagnostic equipment can collect, analyze and use data on all equipment operating in the field they are responsible for to generate new services such as likely diagnoses. Compared to today's business models, data accumulated every day will provide exponentially better and more efficient information in the future. On a broader scale, IoT can be applied in areas such as transportation networks and municipal services, helping to create "smart cities" that can "reduce waste and help us increase efficiency in things like energy consumption."

New Data Source

Before products became smart and connected, data was primarily generated through internal operations and throughout the value chain via order processing, interactions with suppliers, sales interactions, customer service visits, etc. Companies supplemented this data with information gathered from surveys, research and other external sources. Companies that combined data knew something about their customers, their needs and costs—but knew far less about how their products actually worked. The responsibility for identifying and analyzing data became decentralized within functions and tended to be eliminated. While functions shared data (for example, sales data could be used to manage spare parts inventory), they did so in limited, incremental ways. Now, for the first time, these traditional data sources are being supported by another source—the product itself. Smart connected products can generate real-time readings of unprecedented diversity and volume. Data is now becoming one of the core elements of the company, paralleling technology and capital, and in many businesses perhaps becoming a decisive asset. This new product data is valuable on its own, but its value increases exponentially when integrated with other data such as service histories, inventory locations, commodity prices and traffic patterns. For example, in a farm setting, data obtained from humidity sensors can be combined with weather forecasts to optimize irrigation equipment and reduce water usage. In vehicle fleets, information about each vehicle's pending service requirements and location allows service departments to stage parts, plan maintenance and increase repair efficiency. Warranty status data becomes more valuable when used along with product usage and performance data. Knowing that a customer's heavy use of a product will result in an early failure covered by warranty can trigger preventive service that could prevent more costly repairs later.

Data Analytics

As the ability to unlock all data becomes a key resource providing competitive advantage, managing, analyzing and securing this data is becoming a major new business function. While individual sensor readings are valuable, companies can often uncover powerful insights by identifying patterns across thousands of readings from many products. For example, information from individual independent sensors such as an automobile's engine temperature, throttle position and fuel consumption can show how performance correlates with the automobile's engineering characteristics. Linking combinations of readings to emerging problems can be useful and these patterns can be effective even when the root cause of a problem is not understood. Data from sensors measuring heat and vibration, for example, can predict an impending failure days or weeks in advance. Capturing such insights is the domain of big data analytics, which blends mathematics, computer science and business analysis techniques. Big data analytics uses a new family of techniques to understand these patterns. However, an important challenge is that smart, connected products and associated internal and external data are often unstructured. Sensor readings may contain a range of formats such as locations, temperatures, sales and warranty histories. Traditional approaches to data collection and analysis, such as tables and database tables, are not suitable for managing a wide variety of data formats. The emerging solution is a "data lake" where different data streams can be stored in their native formats. From there, data can be examined using a suite of new data analysis tools.

Global Facilities

The production arena is not the only place where machines share data with each other. A company's machines are also connected to supplier and customer systems. This allows them to respond independently to any changes that occur. If a supplier cannot deliver, this technology analyzes alternative suppliers' capacity utilization and costs in real time and automatically places an order with them.

Reshaping Manufacturing

Manufacturers perform a wide range of activities housed in a standard set of functional units to research and develop (or engineer), IT, manufacturing, logistics, marketing, sales, after-sales service, human resources, procurement and finance in order to produce and reach customers. The new features of smart connected products change every activity in this value chain. At the heart of what is reshaping the value chain is data. In smart factories, people still play a critical role in the production process. As augmented operators, they control and monitor production sequences in the production network. In fact, workers don't even need to be physically present in the factory. With IT-based support systems such as data glasses, an operator can manage a real factory (through augmented reality) almost remotely. These support systems can also be adjusted to individual staff members' capabilities and needs and have the potential to extend the working life of older workers in the workforce.

An Example from the Paints and Coatings Industry

Manual addition of materials is a task regularly required in process industry. These can range from small quantities for laboratories to amounts recorded using only platform scales. At this stage, potential errors stem particularly from manual entry of weighing orders and compliance with safety regulations. Inefficient weighing operations resulting from incorrect additions lead to non-standard batch operations, reduced quality and significant loss of time and raw materials. A smart weighing assistant can step in at this point, visually and reliably identifying and recording weighing operations with the aid of five colors, thus helping ensure clear processing of invoices. To provide the best possible support for operations at the workstation, the application can also include workflow data containing, for example, information on required protective clothing or how certain materials should be handled. Additionally, the system helps operators select the most appropriate scales based on the expected weighing and tolerance range. After completing a weighing operation, a label can be generated for packaging. The barcode on this label contains all information related to order data, weighted components (including quantities) and, if necessary, usage and hazard symbols.

System Monitoring: New, Proactive Solutions for Maintenance and Repair

The importance of monitoring solutions is growing rapidly in the process industry. Unlike maintenance work performed manually, a facility's condition can be recorded 24/7 through system monitoring. Before a critical situation arises, deviations from individually configured limit values are identified. Additionally, performance metrics are recorded as long-term trends and presented as clear and concise reports. Implementation of this solution allows facility operators, on the one hand, to quickly detect and eliminate failures and deviations from "standard operations." On the other hand, it helps respond proactively to performance bottlenecks. Converting traditional factories to Industry 4.0 smart factories will result in significant changes in how the paints and coatings industry operates. Production techniques automatically adapt to ensure an appropriate balance between cost, quality and environmental impact, while business processes will dynamically respond to changes in the market. The resulting data contains important information. Whether it is production, operational or facility data—if it is collected, managed and analyzed, the potential of this information can be unlocked and can secure a company's success.

Sources: • https://hbr.org/2015/10/how-smart-connected-products-are-transforming-companies • http://english.bdi.eu/article/news/what-is-industry-40/ • http://www.ioti.com/industrial-iot/short-history-fourth-industrial-revolution