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Industrie 4.0 Manufacturing industry

Industrie 4.0 – what can it do for you?Potential for German industry

2 Industrie 4.0 – what can it do for you? – Potential for German industry

Germany. Almost half of those surveyed came from senior management, such as CIOs/IT directors, board/executive management, CEOs and COOs.

As far as industry is concerned, Industrie 4.0 represents both an opportunity and a responsibility, for instance through the introduction of selective machine-to-machine communication, which in turn can produce new service models within the company or through the value chain.

However, the challenges to be faced before the benefits of Industrie 4.0 can be realized are significant. This is because responsibility for implementation and planning has frequently not been clearly defined. This is borne out by more far-reaching analyses by IBM on the basis of the Experton study.

According to Google, the term Industrie 4.0 was not relevant to companies or the economy in 2011. However, this has changed considerably since then. The very sector-specific business term now attracts over 33,000 searches a month, and this trend is rising.

In contrast, the degree of planning and implementation for Industrie 4.0 projects is rather restrained. A mere five to eight per cent of small and medium-sized enterprises in Germany plan to develop an Industrie 4.0 strategy in the short term. Only large businesses are daring to forge ahead with this, and it is proving to be a success! The Experton Group arrived at these conclusions on the basis of a survey published in Autumn 2014 which was conducted among 368 experts from production and manufacturing companies employing over 100 people in

Fig. 1: The volume of searches for Industrie 4.0 rose 15-fold within two years.

Number of Google queries for “Industrie 4.0” in Germany per day

40,000

30,000

20,000

10,000

Dec 14Oct 14Feb 13 Apr 13 Jun 13 Aug 13 Oct 13 Dec 13 Feb 14 Apr 14 Jun 14 Aug 14

Industrie 4.0 3

“Industrie 4.0 describes the convergence of cybernetics and information technology which permeates all areas of manufacturing, giving rise to smart, self-configuring and controlling products and production systems. Therefore, from a technical perspective, Industrie 4.0 is the convergence between the Internet of Things and the Internet of Data and Services.”– Source: Experton Group

Production and manufacturing identify core pointsThe study presupposes that the increasing networking of systems, the welcome high level of development of information technologies and rising IT budgets form a solid foundation for the implementation of Industrie 4.0 projects among manufacturers and producers.

All in all, there are three main issues that will be actively addressed by industry in the near future and in some cases this is already happening: • short-term control and coordination of production• optimized machine availability through adaptive maintenance

and machine-to-machine communication• development of new product and user-specific business

models and services

In very specific terms, the integration of technical IT and commercial IT enables smart and network production to be combined with customer-led services. This creates a “revolutionary instrument” which will provide the German economy with access to a previously inaccessible landscape.

Fig. 2: Main issues in production industry.

Optimum availability

Control and coordination

Further development

4 Industrie 4.0 – what can it do for you? – Potential for German industry

networking and cooperation, have barely been specified in many companies up to now. However, the additional analyses conducted by IBM reveal that where responsibility had been assigned to any particular position, this was previously to the production manager. The prevailing view in the industrial sector is that the greatest potential for the use of Industrie 4.0 lies within his or her area of responsibility.

However, it is clear from the study that, as well as the production manager, there is a further central role which is viewed within the Industrie 4.0 environment as a source of inspiration and impetus – the CIO. Awareness should always be developed within companies that Industrie 4.0 is an issue that spans departments, in which IT, production and commercial areas have to be closely interwoven to achieve the desired added value. Therefore, it is advisable to integrate all areas in the development of appropriate strategies and not to bundle project responsibilities centrally into one role.

Who is responsible for Industrie 4.0?The Experton study shows that respondents assume that this issue is already being tackled. But with what precision and what intensity? Over half of everyone surveyed and as much as 87 per cent of people in positions of responsibility in production indicated that they felt that the production manager was increasingly concerned with this issue. This does not come as a surprise since people in that position are concerned with the commercial objectives of the company day in, day out and have to find solutions for implementing them. However, it is worth noting that less than half of all respondents felt that Industrie 4.0 was a matter for company management, even though they specify strategy and make resources available. According to the respondents, only a third of the IT departments which form the link between the technical and commercial IT, deal with this issue. This shows that it is the production manager who is expected to provide the all-important impetus for the implementation of Industrie 4.0 strategies.

The people who are ultimately responsible for implementation, whether that be for an appropriate strategy or for identifying areas in which added value is to be generated from data,

Fig. 3: Who currently deals with the issue of Industrie 4.0 in your company?

All respondents Production managers

10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Management

Production

Others

IT

45%30%

52%

87%

34%22%

17%22%

0%

Industrie 4.0 5

Specific targets and perceptionsBITKOM and the Fraunhofer IAO put the additional economic potential of Industrie 4.0 in Germany at around 79 billion euros by 2025. This potential is already clearly defined in the production environment. All the participants in the Experton study hope that Industrie 4.0 will enable them to achieve savings in production costs, to proactively perform machine

maintenance and to respond more quickly to changes in the market. The production managers questioned did not indicate any dominant issue. However, it is worth noting that the production managers expect Industrie 4.0 to be more beneficial in terms of product quality, time-to-market and available services than the overall sample of respondents – and thus demonstrate a strategic focus that is more than adequate for the issue.

0%

Saving on production costs

Better production planning

Quicker response to changes on the market

Shorter throughput times

Greater machine availability

Real-time analysis of machine data

Higher product quality

Availability of better services

Faster time to market

Proactive maintenance / servicing

Greater use of machine capacity

All respondents Production manager

24%17%

15%10%

12%17%

11%10%

10%17%

8%17%

6%

14%

5%

10%

8%10%

11%14%

15%17%

5% 10% 15% 20% 25%

Fig. 4: In which areas do you think Industrie 4.0 will be most beneficial?

6 Industrie 4.0 – what can it do for you? – Potential for German industry

Desirable? Yes! And possible?The Experton study blames a lack of resources for the fact that Industrie 4.0 has not been more widely implemented up to now. This is confirmed by the majority of all the respondents. A separate look at production managers reveals that they particularly lack skilled personnel and high-performance IT for the successful implementation of Industrie 4.0 projects. On the one hand, this is a clear pointer towards CIOs and confirms that the transfer of knowledge is essential between

the core departments for Industrie 4.0. On the other hand, the clear benefits produced by projects such as this should also be brought to the attention of management to prompt them to release the requisite resources. The production manager requires support from outside his or her company for the purposes of providing specific examples and aids to decision-making. In seeking this, his or her first port of call is the manufacturer of his production facilities. This is because important competence in sensor or machine-to-machine communication and automation can be found there. The

All respondents Production manager

10%0% 20% 30% 40% 70%

Lack of know-how50%

44%

Lack of transparency on benefits37%

25%

Security concerns35%

15%

Too costly51%

40%

Inadequate IT infrastructure capacity45%

40%

50% 60%

Lack of resources59%

60%

Great need for staff training45%

39%

Complexity of the issue40%

56%

Lack of support for business performance40%

27%

Insufficient degree of automation within production35%

28%

Our processes / organization are not adequately advanced yet30%

39%

Fig. 5: What are the central impediments to the implementation/planning of projects within your company?

second most important contacts for the production manager are system integrators and IT advisors who represent the most important port of call for external support for all respondents. Therefore, it is advisable to draw upon their expertise when putting the case to management.

A strategic approach offers the promise of successful conceptsThe Experton study shows that German companies are willing to create new business opportunities with Industrie 4.0 projects and to reinforce their own position. At the same time, it is clear that the creation of technical principles and of the requisite know-how are of fundamental importance for the success of those projects. This can take place in part from within the companies, but can also be promoted externally, for example by specialists who can demonstrate strategies and approaches

on the basis of their experience with Industrie 4.0 projects. It is important here to define specifically where you stand as a business in the Industrie 4.0 environment and where you would like to go with it.

Are you ready for Industrie 4.0? IBM offers you the chance to perform a self-assessment of your specific status quo. We will happily also invite you along to a personal meeting with one of our experts to discuss your specific visions and your potential for development.

Further informationVisit our website to find out this and further information about Industrie 4.0, as well as to learn how IBM can assist you on a possible project: ibm.com/industries/de/de/industrie40/

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