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ML Germany Panel: European Leaders Share Front-Line Insights Into Manufacturing 4.0

Posted By Paul Tate, December 08, 2015 at 1:22 PM, in Category: Factories of the Future

M4.0_Panel_Crop_2.pngOn the outskirts of the medieval Bavarian city of Nuremberg in southern Germany late last month, senior executives from leading European organizations shared their unique insights into the key issues emerging from the real-life application of Manufacturing 4.0 strategies during a special Manufacturing Leadership Council Panel on “Manufacturing 4.0 In Action”.

The special leadership event was held during the annual SPS IPC Drives Show, where over 64,000 visitors from across the European continent explored multiple halls to view the latest developments in manufacturing automation and technologies on display from a record-breaking 1,666 exhibitors.

“Manufacturing 4.0 holds the potential of unleashing the creativity of all people in manufacturing regardless of functional role,“ said David R. Brousell, Co-founder and Global Vice President of the Manufacturing Leadership Council, in his opening remarks.

Brousell highlighted three key areas of significant difference between earlier manufacturing industry transformations and the new wave of progress marked by Manufacturing 4.0 – the adoption of networked, data and information-driven technologies, the need for collaborative organizational structures, and the new rules of leadership. “Manufacturing leaders need to be evangelists for M4.0,” he continued, “and truly understand the possibilities at the intersection of the company’s business model and advanced technologies that are part of M4.0. And, most importantly, they must be willing and able to change that business model to take advantage of the opportunities that may be seen today with Manufacturing 4.0, and those that will emerge tomorrow as the network grows.”

Industry 4.0 pioneer and the event’s co-host, Prof. Dr. Detelf Zühlke, noted that Manufacturing 4.0 also promises to revolutionize how companies approach the entire production value chain by creating integrated, modular systems that can be combined to create powerful and more flexible, digitized, end-to end processes across the organization.

“In the past we have tended to increase complexity with each industrial wave, but with M 4.0, we now have the opportunity to start to drive complexity down and simplify new approaches to production,” said Zühlke, Executive Chairman of the pioneering SmartFactory Technology Initiative at the German Center for Artificial intelligence (DFKI) in Kaiserslautern and a member of the Manufacturing Leadership Board of Governors.

“There have to be deep changes in our factories,” he added, “and these changes are now being driven by new digital technologies. We have to change our whole production model for the future.”

Those new M4.0 digital technologies will also help change the nature of business convergence, argued Frost & Sullivan’s Industry Practice Director, Muthu Viswanathan, as he revealed the results of recent research highlighting the opportunity for companies to move from selling products, to focusing on more value-driven services as part of multiple collaborative industry partnerships. Manufacturing 4.0 technologies “will promote new inter-relationships and interdependencies, giving way to unexpected business collaborations and partnerships in the future,” he argued.

Moderated by the ML Council’s David Brousell, a front line panel of senior executives from some of Europe’s leading companies, including Bosch Rexroth, Philips, Belden and Siemens, then joined Prof. Zühlke on stage to explore some of the real-life opportunities and challenges they see along the journey to Manufacturing 4.0. 

The lack of agreed, worldwide M4.0 standards, the need for a new kind of integrated engineer to grasp the opportunities that highly-connected and data-driven manufacturing systems and smart products will bring, and the importance of today’s leaders understanding the investments required and the impact on future business models, featured high on their list of concerns.

Germany’s Bosch, for example, is now beginning to use Manufacturing 4.0 approaches to optimize its group-wide production system across 250 plants around the world, explained Dr. Wolfgang Horn, Senior Vice President, Industrial Applications at its Bosch Rexroth subsidiary.

“We have already invested billions of Euros in our factories, so we are now looking at ways to improve these for the future”, said Horn. “For example, we have a corporate policy now where each product has to be connected and this is where data can really help improve quality. We are getting feedback that we have never had before. Manufacturing 4.0 is disruptive,” he added, “so the task now is to help our people accept this change.”

At Netherlands-based electronics and healthtech group Philips, plant-floor flexibility is high on the company’s list of Manufacturing 4.0 benefits, providing the ability to customize products and deliver in rapid time. “We are looking to move from fixed to flexible automation, using advanced robotics that know what kind of products they need to make, to harnessing 3D printing techniques to help support rapid customization,” said Hans van ‘t Riet, Vice President of Transformation at Philips and a member of the Manufacturing Leadership Council.

“We are already dealing with 20 terabytes of data every day from our products and service platforms,” continued van ‘t Riet, “so we need to analyze all of this. We can already see that 95% of what this data reveals is still untapped opportunity. So our business model is changing dramatically. The ways we have done business, the products we make, and the way they are being serviced are all changing and being connected.“

Christoph Gusenleitner, Executive Vice President at transmission technology company Belden, meanwhile, sees Manufacturing 4.0 as an opportunity both internally and externally, helping to connect its own plant floors and those of its customers. But he sees two major challenges along the way – security and developing the right talent.

‘A typical industrial engineer has an electro-mechanical background,” he explained, “but today with Manufacturing 4.0 we need much more than that to understand and develop the real potential of networking, processing, and data analytics in plants and products. That means changing our hiring policies and our organizational structure, and to re-organize around value streams, not product lines.”

Van ‘t Riet at Philips agreed: “The new M4.0 business model is a combination of products, services, and intelligence,” he said, “so we are now looking for people who can look beyond the product and understand the whole value stream. We are looking for people with the right ‘T’ profile – people who have deep knowledge in one particular area, but also the ability to work effectively horizontally across multiple areas of the business.”

Added Dr. Helmut Figalist, Leader, Technology and Innovation, Industrial Automation at Siemens; “People will also need the ability to work in networks of teams, even when they are located in different parts of he world, so we will need many more multidisciplinary, multi-skilled people who can understand lots of aspects of the business if our companies are going to achieve the benefits of an M4.0 approach.”

“But we won’t get those multidisciplinary people from universities,” warned Dr. Horn from Bosch Rexroth, arguing that current educational approaches and subjects are often just as siloed as many traditional commercial organizations. “So we need to create internal structures in our companies that can achieve this if we are to succeed to develop generalists that can drive the future of the business,’’ he added.

In addition to this talent shortage, a delegate from one of Europe’s largest food processing companies, Danish-based Arla, raised the thorny issue of the current lack of common standards across M4.0 technologies as another key challenge hindering adoption. “We don’t want to get trapped in one single vendor’s ecosystem,” he said.

“That,” agreed Prof. Zühlke, “is a real issue. We need to work together urgently in the months ahead to create global standards for Manufacturing 4.0. And it's important that we start to create these now to allow companies to have confidence in the choices they make as they migrate and adopt new M4.0 approaches.”

“Of course the great thing about standards today,” quipped the ML Council’s Brousell, “is that there are so many of them!"

But while the current issues of clear adoption paths, security, talent, and standards were cited by the panelists as potential short-term challenges to adoption today, each stressed that these should not be fundamental barriers to companies as they begin to embrace the benefits that Manufacturing 4.0 already has to offer – from the ability to create more agile plant floors, to rapid customization able to produce ‘batches of one’, to rich new service business platforms and revenue streams, to entirely new business models that promise to change the future of manufacturing for years to come.

“The most important thing,” concluded Prof. Zühlke, “is just to start with something; to think about what new technologies, standards, and ideas are out there, and how they can make a real difference to your company worldwide.”

The journey to Manufacturing 4.0 may be a long one, but it's clear that taking the first few steps is the only way for the world’s manufacturing companies to progress to a more efficient and profitable future for the industry.

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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Posted on
What a wonderfully rich summary and set of insights. There are some many important issues and two that grabbed me are:
1) the observation that university training and education won't meet the needs of future businesses and that savvy schools have an opportunity to create a hybrid MBA program that integrates multidisciplinary skills, including design, business, technology management, and analytics.
2) how increasingly important advanced analytics will be in processing the "20 terabytes of data" we see now, to the 20 petabytes in the not too distant future.
Again, thank you for a great article.
Posted on
Thanks Jim. It was indeed a 'wonderfully rich' event too, covering lots of ground and stimulating many fascinating ideas and debates. Hope you can join us for a future event - either in Hannover in April or at our annual Manufacturing Leadership Summit in June (www.MLSummit.com) - where we will be continuing this vital conversaiton around the Journey to Manufacturig  4.0.  Best - Paul
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