SIAA Columnist Part 3: International Rush to Industry 4.0

SIAA-Internation-Rush-to-Industry-4.0

“In the industrial revolution, Britain led the world in advances that enabled mass production: trade exchanges, transportation, factory technology and new skills needed for the newly industrialised world.” -Lucy Powell

 

Industry 4.0: for many, it’s an inescapable buzzword, a nexus of hype and business opportunity. Others see it as an initiative, a technological call to action. Sceptics may see Industry 4.0 as an umbrella term for a growing number of business and political challenges. In comparison, futurists may only see the boundless potential that this new era offers.

National Industry 4.0 initiatives are plans or policy documents that describe each country’s vision of the opportunity and challenges that these disruptive technologies present to manufacturers. Governments distribute these plans as one or several documents. Industry 4.0, however, means different things to different stakeholders.

To governments — Industry 4.0 initiatives represent important priorities and development goals to help identify changes in policies, incentives, and ideal standard practices.

To private sector companies — initiatives identify new opportunities brought forth by the real-time access to the intelligence and point to incentives and sources of investment to transform the way they conduct the business.

To Academic institutions — initiatives help identify which technologies or resources need to strengthen to support innovation during or initial research or advanced R&D phases. Educators can use national development plans to determine which types of training and education to develop or offer non-university students.

To the individual — Established or newly graduated engineering professionals can use initiatives to identify likely trends in manufacturing tech development, education, and employment. Initiatives are a great place to start looking for indicators of current and future needs for manufacturing professionals and technical specialists.

There are plenty of reasons to adopt Industry 4.0 technology and processes. At the more idealistic side of the motivation spectrum, it can be the desire to move the nation’s manufacturing effort up the value chain by adopting advanced technologies to increase productivity and competitive edge and upgrade workforce skillsets. That approach involves trading assembly line production for a role as a provider of automated and highly customised products and associated customer services.

The promise of reviving stagnant manufacturing performance is also a worthy goal. Efficiency-inducing Industry 4.0 technologies are just the ticket that legacy manufacturers need to become more competitive.

National Industry 4.0 Initiatives

Industry 4.0 is the data- and technology-intensive transformation of manufacturing and other related industries. These changes set in business and technical environments link data, people, machines, processes, services, and IIoT-connected devices. The history and current status of Industry 4.0 efforts in countries within and beyond Southeast Asia show their concerns and priorities about current and future manufacturing development. We begin our analysis at the birthplace of “Industrie 4.0”, Germany.

Germany: Industrie 4.0 Initiatives

The Industrie 4.0 idea began in 2006, even though the name didn’t exist yet, and digitisation was a long way from public consciousness. Industrie 4.0 was the name given to a German strategic initiative introduced in 2011. Industrie 4.0 was developed by the BMBF (Ministry of Education and Research) in Germany to create a coherent policy framework that would maintain the nation’s industrial competitiveness. The strategy emphasised robust product customisation enabled by intelligent, highly flexible mass production.

Industrie 4.0 embraced these six design principles, which later played essential roles in Industry 4.0 thinking:

Interconnection — devices, machines, sensors, and humans communicate and connect via the Internet of Things (IoT)

Information transparency — useful information that helps manufacturers make more accurate and timely business decisions

Inter-connectivity — The ability of operators to connect devices, machines, IT networks, and people are the basis of smart manufacturing. These connections enable collecting and transferring immense amounts of data from all points in the expanded Industry 4.0 manufacturing process

Technical assistance — Industrie 4.0 recognises two types of assistance systems. First, assistance systems, which support humans by visualising and gathering information taken throughout the manufacturing process. Manufacturers and partners throughout the value chain use this information to make informed decisions and solve urgent problems, even at short notice.

Smart factories, another important Industrie 4.0 idea, are where the six design ideas come into play. It’s where data, network connectivity, and cyber-physical systems interact in processes that occur throughout manufacturing supply and value chains. These ideas and German leadership in the global Industry 4.0 development effort have merged into global Industry 4.0 events and practices. German businesses participate in Open Industry 4.0 Alliance meetings at the Hannover Messe trade fair.

 

China: The Made in China 2025 Plan

Awash in a sea of international high drama, China’s Made in China 2025 initiative stimulates a range of emotions. At first, Chinese manufacturers and government officials were filled with pride and promoted the plan vigorously. Some of the country’s economists tried to inject a more measured response with less ambitious goals. Overseas, industrial rivals, chiefly in the United States, reckon that the Chinese were aiming for world domination in manufacturing. Beijing insists that it is just a guide meant only to steer Chinese development into the future. The launch of MIC2025 driven by the nation’s concern on both its weakness in core manufacturing capabilities and ambition to catch up with the leading players in the international arena — Like many manufacturing rivals, China worries about the middle-income trap, although at a different scale and higher up the value chain as the 2nd largest economy of the world. Chinese manufacturers and government officials worry about continued reliance on foreign technology in its supply chains, and there’s a growing sense of national pride in domestic technology companies. Largely state-driven, the MIC2025 plan wants to move the country’s role away from being the world’s assembly line. The plan’s goals include moving Chinese industries up the value chain by replacing imported components and technologies with locally manufactured products. The initiative also aims to develop world-class technology champions who can take on the Western tech giants in cutting-edge technologies. Clearly defined targets and a long-term outlook — The original idea behind MIC2025 was to catch up with other countries. Somehow the plan’s objectives became caught up in recent Chinese nationalism. Now, the desire to be a technology superpower is deeply bound up in the “Dream of China.” In detail, the plan aims to end China’s reliance on foreign technology and raise local high-tech industries to Western standards. The plan documents the first of three 10-year periods of digital industrialisation:

• Phase 1: 2015—-2025 (becomes a robust manufacturing country)

• Phase 2: 2025—2035 (able to compete with developed manufacturing powers)

• Phase 3: 2035—2045 (transformation into a leading manufacturing power)

In the Chinese government’s official view, the plan is a market-led effort guided by the national government. Details of the initiative present a significant leapfrogging from previous economic models.

SIAA-Columnist-Make-in-China-2025
Table 1 : Made in China (MIC) 2025

 

United States: Industrial Internet Initiatives

The U.S. name for a group of disruptive and possibly transformative technologies is the Industrial Internet, more recently known as the Industrial Internet of Things (IIoT). A bit of Industry 4.0 history — The U.S. Industry 4.0 initiative supports fundamental improvements in manufacturing, engineering, materials purchasing, and supply chain management. The initiative is the product of several programs:

The Advanced Manufacturing Partnership (2011) was a national effort that brought together representatives from industry, universities, and the federal government. Its goal was to identify challenges and opportunities to transform the technologies, products, and processes across several manufacturing industries.

• Launched in April 2014, the Advanced Manufacturing Partnership (AMP) 2.0 is a national effort appointed by President Obama to secure U.S. leadership in emerging technologies. It aims to create high-quality manufacturing jobs and enhance America’s global competitiveness.

• Ensuring Leadership in Advanced Manufacturing (2011) called for a partnership between government, businesses, and educators. The plan identified the most pressing manufacturing challenges and business opportunities.

• Capturing Domestic Competitive Advantage in Advanced Manufacturing (2012) described the policy opportunities and requirements of the United States as viewed from economic and national security perspectives.

• The National Strategic Plan for Advanced Manufacturing (2018) documents opportunities for federal policy to accelerate advanced technologies in manufacturing.

Each of these programs focused on developing stronger ties between expertise, innovation, and a strong economy. Innovation, talent, and a healthy business climate — Objectives and recommendations related to Industrial Internet proposals have scattered throughout many documents. However, the central ideas about what needs to transform U.S. manufacturing gathered as recommendations in Capturing Domestic Competitive Advantage in Advanced Manufacturing - a report released through the Advanced Manufacturing Partnership Steering Committee.

When rendered down to the essentials, the recommendations focus on three primary goals: making innovation faster and less expensive, developing a future U.S. manufacturing workforce, and improving the manufacturing business climate.

Accelerating innovation — The first pillar highlights the need to facilitate R&D to take ideas from the drawing board, lab, or testbed, to saleable products and services. These recommendations directly address the hypercompetitive nature of manufacturing.

Securing the talent pipeline — This pillar focuses on developing current and next-generation members of the manufacturing workforce. Rapid scale-up of new ideas into production requires a well-trained, innovative, and flexible workforce.

Improving the business climate —In an Accenture survey of more than 1,400 business leaders, only 36% of respondents claim they fully grasp the implications of the IIoT. At the same time, only 7% of companies have developed comprehensive strategies and investments. As in other countries in and beyond ASEAN, U.S. manufacturers recognise the short-term benefits of Industry 4.0 — more efficient production and more productive employees. However, the value of Industry 4.0 as an enabler of new and lucrative business models seldom comes up on executives’ radar. Government-supported research and inter-business collaboration are established parts of technology development. However, there are still resource gaps and obstacles in the United States that will slow the digital transformation process.

 

Japan: Society 5.0

Japan’s approach to Industry 4.0 adoption reflects the nation’s unique set of challenges and concerns about digital technology changing its businesses and society. A broader scope is the hallmark of Japan’s digital technology adoption plan. Other nations limit the focus of their Industry 4.0 strategy to the digital transformation of manufacturing. However, faced with worrisome social challenges, Japan developed its Industry 4.0 adoption plan, which goes far beyond the digitisation of the economy. Rather than focusing on changes in technology (industrial revolutions), Japan expands its attention to the effects of digitalised technology on society.

Society 5.0: An expanded view of value — As the name implies, Society 5.0 plan recognises that the availability of vast quantities of data and increasingly powerful analytics are leading to new ways of doing business. However, the plan’s authors acknowledge that changes in technology will also impact social interactions. That’s why the plan addresses change in Japanese society. In April 2016, the Japanese government enacted Society 5.0, the 5th Science and Technology Basic Plan. The plans set out that today, human still create knowledge from information. In the proposed fifth stage of human society, intelligent machines guided by AI will do the same.

Society 5.0 drivers and objectives — Japanese officials are faced with an ageing population and sluggish manufacturing growth. They recognise that digitised processes provide the opportunity to strengthen the national economy, reduce environmental problems, and address social issues. The Society 5.0 Plan describes high-level capabilities that will enable Japanese citizens to stimulate the development of future industries and reinforce the “fundamentals” of the nation’s science, technology, and innovation.

New manufacturing capabilities — The Society 5.0 plan concerns itself with many areas, but we’ll stay focused on manufacturing. Manufacturing companies will incorporate Big data, the Industrial Internet of Things (IIoT), artificial intelligence (AI), and robotics at different levels of manufacturing facilities, machines, and production processes. Within the Society 5.0 framework, digitalised technologies will enable manufacturers to:

• Perform flexible production planning and inventory management in response to changing requirements.

• Make production more efficient by using AI and robots to enable inter-plant coordination and achieve high-mix, low-volume production.

• Make distribution more efficient by using processes such as cross-industry cooperative shipping and truck platooning.

• Provide consumers with highly customised goods with minimal delays in delivery.

 

About the Columnist

Industry veteran Colin Koh is our monthly columnist to share with SIAA community the essence of ASEAN manufacturing and pragmatic tips on how to approach and navigate the fourth industrial revolution for their businesses. Stay tune to Colin's regular segment all about Smart Manufacturing 4.0 in ASEAN! Please visit www.asean4ir.com more resource.