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Hannover Day 2: Challenges to Industry 4.0

Posted By Paul Tate, April 15, 2015 at 6:06 AM, in Category: Factories of the Future

hm_logo_col.jpgAs with any potentially transformative industry initiative, evangelism is soon tempered by realism as attempts to drive front-line adoption reveal a host of real-world obstacles that must be overcome.

So too with Industry 4.0, the future vision for manufacturing in which highly digitized, cyber-physical production environments promise previously unachievable levels of agility, end-to-end data-driven processes, and ever smarter, connected, and customized products.

Four years after the first ideas behind Industry 4.0 were mentioned here at Germany’s Hannover Fair in 2011, and two years after the concept was officially launched as a national initiative by the German government in 2013, that rush of realism is now rising to the surface as both advocates and early adopters begin to recognize some of the hurdles that still need to be addressed before companies can begin to turn the ultimate promise of 4.0 into real-world practice.

Here are some of the key challenges along the journey to Industry 4.0 that have been cited over the last two days by both companies and industry experts at this year’s Hannover event:

  • Standards: as the flurry of intelligent new automation tools and data-driven solutions hit the market, one of the key questions in many companies’ minds is which standards to adopt to ensure they can protect present and future investments and connect extensively both internally and externally to partner networks around the world along the journey to 4.0. This current standards confusion spans a whole range of areas – from new sensor-rich machine tools, to data models, to analytical tools, to advanced machine-to-machine and inter-device communication protocols.
  • Security: Perhaps one of the toughest issues facing Industry 4.0 adoption, and raised by numerous participants at this year’s Fair, are the potential problems of security breeches and leaks in the highly interconnected world of Industry 4.0. As every network link may present a new vulnerability, technology vendors, tools suppliers, and multi-sector industry associations will need to work closer than ever with both enterprise IT and plant floor security experts to ensure they create more robust and resiliently secure systems and networks than ever before. 
  • Data Privacy and IP: From connected plant tools to smart products, one of the key predicted benefits of Industry 4.0 is the ability to collect and analyse new streams of data to help improve efficiencies, measure performance, prevent failures, and identify the high-value usage patterns. But some companies, especially small and medium enterprises that perhaps have the most to gain from the competitive edge that Industry 4.0 efficiencies and flexibility can deliver, but have never had to allow their data outside their own walls in the past, may need to change both attitudes and internal policies to be able to gain full benefit from the big data insights the 4.0 revolution promises to provide.
  • Legacy Systems: Another hurdle identified by observers at the Fair this week is the sheer weight of investments in legacy systems that companies must consider as they plan a migration strategy to an Industry 4.0 environment. First, they need to recognize and understand the potential benefits of 4.0, and then prioritize exactly how they begin their first steps on the journey to a smarter future. This is no small task, as it requires both faith and confidence in a different future to accept that retrofitting current systems or investing in new kinds of equipment will be necessary.
  • Role Models: That critical issue of faith and confidence to change future direction along the 4.0 path raises the acute need, across multiple industry sectors, for successful role models that can show other companies the way forward and articulate both the reasons behind, and the proven benefits they have gained from, the early adoption of various aspects of the Industry 4.0 model. And it’s no good if the role models are just big companies who can afford to experiment. One of the underlying foundations of Industry 4.0 is its promise to raise the competitive power of small and medium enterprises, which represent the bulk of manufacturing activity in most nations around the world. What’s needed now are a host of SME role models and successful usage cases that can help change the mindsets of reluctant and skeptical manufacturers and inspire them to embrace adoption.
  • C-Suite Champions and Collaborative Structures:  For those industrial role models to emerge quickly, many manufacturing leaders must now become champions of the Industry 4.0 cause, both within their own organizations and across their partner networks. Not least, this is because 4.0 adoption can only deliver maximum benefit if there are highly-integrated, end-to-end processes and collaborative approaches. And that means adapting traditional functional roles and breaking down silos within an enterprise. The only way that can happen is if both the vision and firm direction come from the top, otherwise territorial management layers could rapidly derail any strategic 4.0 plan.
  • New Working Cultures: And it’s not just senior and middle management that will need to take a fresh look at their working roles. Embedded intelligence, pervasive plant floor and logistics automation, the increasing autonomy of machine tools and systems, and the emergence of disruptive new data-driven services around ever smarter products, will create a kind of ‘prefect storm’ that is predicted to change the nature of work for almost every person in the enterprise -- from the factory floor worker to the delivery driver. And that will demand a whole new approach to training and education across the entire workforce to ensure workers grasp the ideas behind the change, and are willing to accept its impact on their own working cultures. Perhaps of all the hurdles Industry 4.0 faces, this is the issue that could take the longest to solve.

Recognizing the urgent need for focus on many of these key obstacles to progress, Germany’s Ministry of Industry launched a new group at the Hannover Fair this week, called the Industry 4.0 Platform.

The new group involves both government agencies and a number of industrial and research associations. Its primary focus is on standardization, research, and security in a bid to drive adoption and improve education among both current and new manufacturing employees.

Perhaps most interestingly, it also includes representatives of German’s labor unions too, highlighting the fact that Industry 4.0 is likely to change the nature of work as much as it will change the nature of production in the future.

One of the new group’s first moves was to publish a reworked timeline for the expected development and migration towards a final Industry 4.0 vision – and this time it stretches out another 20 years to 2035. This, in itself, is further recognition that the obstacles to adoption are complex and will take time to overcome.

So while other countries like China and India may only now be starting to play catch up with Germany’s futuristic industrial vision of Industry 4.0, the country is again attempting to lead the global pack in its approach to facing up to the real-world challenges ahead and mapping out a practical migration path to a smarter future for manufacturing.

The Industry 4.0 revolution clearly won’t happen overnight! 

Written by Paul Tate

Paul Tate is Research Director and Executive Editor with Frost & Sullivan's Manufacturing Leadership Council. He also directs the Manufacturing Leadership Council's Board of Governors, the Council's annual Critical Issues Agenda, and the Manufacturing Leadership Research Panel. Follow us on Twitter: @MfgExecutive

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