2
Foreword
− Introduction of SME Development Fund (SDF) − Introduction of project : Hong Kong foundation
industry towards “Industry 4.0” Editorial Board and Disclaimer Organizer and support organization
Table of contents
Sector-specific Industry 4.0 Benchmarking Model Section One: Overview
− What is “Industry 4.0” − Reasons and objectives of implementing
"Industry 4.0" − “Industry 4.0” goes beyond automation − Project benefits for Hong Kong SMEs
Section Two: Industry 4.0 Core Principles − Concept of Industry 4.0
− Industry 4.0 framework
3
− Building corporate uniqueness (innovative digital business model)
− Smart solutions, smart innovation, smart supply
chain, smart production
− Implementation driven by technology
Section Three: Industry 4.0 Maturity Model
− Analytical level − Enterprise level − Smart level − Industry 2.0 (-1) − Industry 3.0 (-2) − Industry 4.0
Frame condition (0i) Real-time data generation (1i) Real-time data analysis (2i) Information Physics Fusion System (CPS)
(3i) Smart Autonomous System (4i)
Section Four: Questionnaire on Maturity level of Industry 4.0
− The Sample Questions in Questionaire − The Methodology in Evaluation
4
− The Meaning of scale Section Five: Insights from the Survey
5
Foreword
6
Introduction of SME Development Fund (SDF)
The Hong Kong Special Administrative Region Government established the SME Development Support Fund in 2001 to subsidize projects that will enhance the competitiveness of Hong Kong SMEs as a whole or in particular industries. The SME Development Support Fund aims to support non-distributed profit support organizations, business organizations, professional bodies and research institutes to implement projects which will enhance the competitiveness of SMEs in Hong Kong as a whole or their respective industries. SMEs in Hong Kong can apply and be suitable for the following institutions: A) Supporting organizations, business organizations, professional bodies and research institutions that do not distribute profits*; B) The applicant institution shall be a statutory body or an institution registered under the laws of the Hong Kong Special Administrative Region; * "Non-distributed profits" institutions/organizations are organizations/organizations that do not distribute
7
bonuses to their directors, shareholders, employees or any person. Applicants may receive up to $5 million in funding or 90% of the project's funding for each approved project (whichever is lower). The balance must be borne by the applicant in cash, in kind, or by other sponsors. The SME Development Fund (SDF) and the Organization Support Programme under the Dedicated Fund on Branding, Upgrading and Domestic Sales (BUD(OSP)) have been merged to form the TSF with effect from 1 October 2018. TSF provides financial support to projects which aim at enhancing the competitiveness of non-listed Hong Kong enterprises in general or in specific sectors, including assisting them in developing any markets. For inquiries, please contact the Trade and Industry Department ("TID") for the Application Form and Guide to Application. Hong Kong Federation of Innovative Technologies and Manufacturing Industries (“FITMI”) has been funded by the "SME Development Support Fund" of the Trade and Industry Department of the Government of the Hong Kong Special Administrative Region. The Hong Kong Productivity Council has implemented the
8
project to promote the implementation of Industry 4.0 for SMEs in Hong Kong. In this project, “Short-Mid-Term Strategic Upgrade Mapping,” developing a “Sector-specific Industry 4.0 Benchmarking Model” and a “Sector-specific practical implementation guideline” will be developed to assist HKSMEs of four Industries sectors to migrate their legacy manufacturing operation and production into Industry 4.0 gradually. In order to provide a robust reference protocol to assist them in riding on this new management and manufacturing concept, the information and standard are important to assist them in mastering the know-how of step-by-step realization towards Industry 4.0. Introduction of project: Hong Kong foundation industry towards “Industry 4.0” In the face of the increasing number of overseas customers who are implementing "Industry 4.0", Hong Kong companies as suppliers must also upgrade to "Industry 4.0" in order to remain competitive in the international market. To help Hong Kong SMEs move forward and implement "Industry 4.0", the Hong Kong
9
Federation of Creative Technology and Manufacturing Industries (FITMI) has partnered with the HKPC to launch a three-year "Hong Kong Basic Industry into Industry 4.0". "Deployment Plan" to promote the upgrading and transformation of Hong Kong's industrial sector and enhance its competitive edge. The "Plan" is funded by the Industry and Trade Administration's "SME Development Support Fund." The "Industry 4.0" team of the HKPC will work with international experts to conduct an in-depth analysis of the current situation of the Hong Kong industry and deploy new services. The model develops a blueprint for the short- and medium-term strategy upgrade and prepares an industry implementation guide for Industry 4.0 to provide a step-by-step and feasible upgrade for local infrastructure industries. The "Plan" is supported by more than 20 chambers of commerce and will implement "Industry 4.0" through the three significant trilogy industries, plastics, electronics, metals, and machinery. The "Plan" trilogy: Enterprise on-site assessment, preparation of three industry guides of different natures, the publication of research results in various seminars and workshops, and sharing of experience with the industry.
10
Three industry guides provide a multi-angle "Industry 4.0" upgrade reference: "Industry 4.0 Benchmarking Guidelines" for objective and systematic assessment criteria and models for Hong Kong companies, covering product development, sales, procurement, production, quality management , logistics and services, and other important operational areas; "Industry 4.0 deployment medium and short-term strategic upgrade blueprint" introduces the analysis of the overall maturity of Hong Kong enterprises; and "Industry 4.0 implementation of industry design and implementation of industry guidelines and case studies" is detailed Introduce the "Industry 4.0 Implementation Plan", including technology, hardware, software, management concepts, procurement solutions, cost budgeting, and business benefits. For HKSMEs, it is necessary to have knowledge and technique to implement industry 4.0 at different levels of adoption and company status. While the proposed upfront knowledge and know-how transfer programmes for four sectors will be the trump card to maintain their qualified suppliers status and act as the catalysis to boost the overall technological and unique
11
position of HKSMEs in the global industrial arena, and hence, Hong Kong industry as a whole.
"Hong Kong foundation industry towards "Industry 4.0" deployment project" was officially launched. The guests included (from left): Dr. Lawrence Cheung, Director of Technology Development, HKPC, Li Yuen Fat, Chairman of FITMI, and Toni Drescher, Head of Fraunhofer IPT, Germany. The process of Hong Kong enterprises moving towards "Industry 4.0" has just started. Most of the enterprises are still in the stage of industrial 2.0 to 3.0, that is, labor-intensive production and application of automation equipment for mass production. There is no single method or technology for the implementation of "Industry 4.0".
12
The industry must develop appropriate routes and strategies in accordance with the nature of its business and the degree of development. "Industry 4.0". Companies are advised to "listen and see more", understand their capabilities and customer needs firstly, and then develop an "Industry 4.0" development blueprint. The Hong Kong industry is now in need of absorbing more "Industry 4.0" information to tie in with the assistance of the Government, experts and partners, and to formulate an overall development blueprint based on its actual situation.
13
Editorial Board and Disclaimer Publication: Hong Kong Productivity Council Productivity Building, 78 Tat Chee Avenue, Kowloon, Hong Kong Copyright: Hong Kong Federation of Innovation, Technology and Manufacturing Federation Hong Kong Productivity Council The project is organized by the Hong Kong Federation of Innovation, Technology and Manufacturing Industries. The Hong Kong Productivity Council is responsible for implementation and is funded by the SME Development Support Fund of the Trade and Industry Department of the Government of the Hong Kong Special Administrative Region. Any opinions, research findings, conclusions or recommendations expressed in this publication / in the event (or members of the project team) do not represent the Hong Kong Special Administrative Region Government, the Trade and Industry Department or the SME Development Support Fund and the development of brands, upgrading and expansion The
14
opinion of the special fund (institutional support plan) review committee of the domestic market. The information in this report is for reference only. Although the content has been tried to be precise, neither the publisher nor the organization involved in the project is responsible for the negligence of the information provided or any loss caused thereby. Copyright may not be reproduced All rights reserved. No person may use any electronic or mechanical technology without the consent of the publisher. And other methods of reprinting or using the information in this report, including photocopying, recording, and placing the information into any form of information storage or reading system.
15
Organizer and supporting organization
Organizer:
Implementation organization:
Funding for the SME Development Fund:
Any opinions, findings, conclusions or recommendations
expressed in this material/event (or by members of the Project
team) do not reflect the views of the Government of the Hong
Kong Special Administrative Region, Trade and Industry
Department or the Vetting Committee of the SME
Development Fund and the Dedicated Fund on Branding,
Upgrading and Domestic Sales (Organisation Support
Programme).
16
Supporting organizations (in no particular order):
17
Supporting organizations (in no particular order):
18
“Sector-specific Industry 4.0 Benchmarking Model”
Section One:
Overview
19
What is “Industry 4.0” The Term Industry 4.0 stands for the fourth industrial revolution. Best understood as a new level of organization and control over the entire value chain of the life cycle of products; it is geared towards increasingly individualized customer requirements. The basis for the fourth industrial revolution is the availability of all relevant information in real time by connecting all instances involved in the value chain. The ability to derive the optimal value-added flow at any time from the data is also vital. The connection of people, things, and systems create dynamic, self-organizing, real-time optimized value-added connections within and across companies (i40, 2019; Thangaraj, 2018) The concept of Industry 4.0 only emerged in 2011 as a future project within the framework of the High-Tech Strategy. Acatech - the German Academy of Engineering Sciences - presented a research agenda and implementation recommendations in 2013 at the Hannover Fair. These recommendations were compiled at the initiative of the German Federal Ministry of Education and Research (BMBF). Over 3
20
million euros were invested in pre-analysis, education, and promotion. Industry 4.0 does not only concern manufacturing processes in factories, but the concept applies to all operations, including products and services. Technology enables Industry 4.0; however, the selection of the right applications is essential to deliver value to the company. The goal is different from the past, instead of creating new industrial technologies (predictive industrial revolution), but integrating all industry-related technologies, sales, and product experiences. It is to build a smart factory with adaptability, resource efficiency, and ergonomics, and integrate customers and business partners in business processes and value processes to improve production efficiency and achieve smart production. With the advent of the industrial Internet era, Germany's Industry 4.0 practice provides a new path to explore future production. It connects factories, machines, production materials, and people through network technology, bringing unlimited imagination to industrial intelligence. Enterprises have started to implement Industry 4.0 and gradually expand the concept of Industrie 4.0 not
21
only into their supply chain but also in the complete value chain. In particular the automotive industry as well as the consumer goods industry. Additionally, product personalization, small batch sizes, and flexible production, including many different data points, have led to a highly flexible new working model. German manufacturing is one of the most competitive manufacturing industries in the world and has a leading position in the global manufacturing equipment sector. Much of this stems from Germany's focus on the research and development of innovative industrial technology products and the management of complex industrial processes. Germany has a strong equipment and workshop manufacturing industry, a high level of competence in the world of information technology, and expertise in embedded systems and automation engineering. These factors together have established Germany's leading position in the manufacturing engineering industry. (Mingxing, 2019)
22
Industry 4.0, proposed by Germany in 2011, aims to help Germany maintaining its leading position in the global industrialized countries (re-industrialization and industrial renaissance in the UK and the US, China from a big country to a strong country) and increase the technological content of the country in the industry to increase industrial added value. With the development and application of a large number of innovative technologies, it is aimed to encourage and assist industrialists in maintaining local production. (Industry Cluster 4.0, 2019) Through the
23
implementation of the Industry 4.0 strategy, Germany will become a supplier and leading market for a new generation of industrial production technology (i.e., information physics systems) (Mingxing, 2019), which will enable Germany to enhance its global competitiveness once again while continuing to maintain the development of domestic manufacturing. (Industry Cluster 4.0, 2019) Reasons and objectives of implementing "Industry 4.0" "Industry 4.0" is hailed as the fourth industrial revolution, using digital information to integrate sensors, Internet of Things, big data, the Internet, and other technologies to achieve smart and automated production. There are two reasons for implementing Industry 4.0. The first reason is to launch innovative business models, develop smart products and services, sustainable growth, and revenue. The second reason is to reduce costs, save time, create a safer production environment, and improve production quality and flexibility.
24
Although most of the SMEs in Hong Kong are positive about investing in "Industry 4.0", they generally do not know where to start. “Industry 4.0” goes beyond automation Many people think that "Industry 4.0" is automation, but it is not. Everyday automation was already introduced with the third industrial revolution. Data is the essence of "Industry 4.0". "Industry 4.0" connects the entire product cycle through the Internet of Things (IoT), from "single order," purchasing, "ordering", production to shipment, real-time Data analysis, flexible adjustment according to actual conditions. Therefore, "Industry 4.0" is a direction, not an end; companies are doing business, not "Industry 4.0." Providing personalized products and services with high efficiency, high quality, and low cost is the real goal. According to the HKPC's understanding, in the past year or two, many OEMs and ODM factories in Hong Kong have received overseas customers' inquiries about "Industry 4.0". Customers even sent out questionnaires to understand the degree of Hong
25
Kong businessmen's understanding of "Industry 4.0". For example, Ask the manufacturer about the smart factory, smart data, Internet of Things, and other concepts, and ask if the manufacturer's production and test equipment has been connected. Finally, even ask the manufacturer's ERP system to connect with the customer's system. It is beyond your choice for manufacturers to implement "Industry 4.0" for more and more overseas customers and upgrade to the "Industry 4.0" smart manufacturing model. Together with smart manufacturing in national policy will promote the provinces and municipalities to subsidize smart manufacturing projects, encourage enterprises to carry out technological and industrial changes, Hong Kong businesspeople should seize the opportunity to transform. The biggest problem in the industry is the lack of awareness of "Industry 4.0", which is doubtful about the benefits of equipment, software and workforce training for "Industry 4.0". Of course, the implementation of "Industry 4.0" is not singular and unilateral. Each industry and each company must
26
develop appropriate routes and strategies by its nature of business and development level. The upgrade of the company to "Industry 4.0" is a gradual process. First, companies should be aware of their ability to implement "Industry 4.0" and their customers' needs, and then formulate an "Industry 4.0" development blueprint. The HKPC collaborated with the Fraunhofer IPT Institute in Germany to develop an “Industry 4.0” maturity assessment model from 0 to 4, which can be used as a reference for the implementation of “Industry 4.0”. Enterprises, especially SMEs, are moving towards "Industry 4.0". Although there are many challenges, they are actually "big and big, small and small", but they must do it. Among them, digitalization is the first step. SMEs do not need to invest heavily in new equipment. They can install sensors on existing machines or plug in a "set-top box" to connect to the network. This will enable existing production lines to add networking and collect real-time information. Take the first step towards "Industry 4.0" (Microsoft, 2019)!
27
Project benefits for Hong Kong SMEs The proposed project will assist HKSMEs to maintain their international status and ride on the global industrial trend, by contributing a clear and comprehensive roadmap and practical implementation guidance for HKSMEs to transform their production modes from I 2.0, I 3.0 to Industry 4.0 step-by-step. Four sectors i.e. 1) Metal, 2) Plastics, 3) Electronics and 4) Machinery Equipment of Hong Kong Industries will be evaluated and studied. These sectors are the foundation industries, cover most of the HKSME manufacturing process and are characterized by relatively low labor intensivity and mutual inter-correlation. They are expected to have direct and immediate compliance pressure from their overseas buyers. Therefore these sectors will be evaluated and their current operation condition will be studied based on a reliable and practical solution composing of a “Short-Mid-Term Strategic Upgrade Mapping”, development of a “Sector-specific Industry 4.0 Benchmarking Model” and a “Sector-specific practical implementation guideline”. A solution proposal will be developed and compiled by HKPC Industry 4.0
28
Implementation Team and overseas experts of Industry 4.0. In particular, the benchmarking model is used to collect the whole picture of the four Industries’ current production conditions. Then the information collected will be used as important reference for compiling the “Short-Mid-Term Strategic Upgrade Mapping” and “Sector-specific Practical Implementation Guideline and Case Analysis”. Upon collecting and reviewing the benchmarking results, the overseas expert and HKPC consultant will conduct on-site detailed analysis for four sectors to identify a series of industry 4.0 project ideas and case studies. Afterwards these ideas and studies will be compiled in the form of a “Sector-specific practical implementation guideline and case anslysis” which will be the valued reference as these guidelines and cases will be derived in accordance with the actual situations of HKSMEs and contains local operation elements. It would be difficult for the overseas experts to straightly compile an implementation guideline composing of different project ideas and cases without having a personal impression of the actual situation of local SMEs. HKSMEs can then use our developed implementation guideline to select appropriate Industry 4.0 project ideas for self-
29
implementation based on their own status step-by-step. In the following direct benefits for SMEs of our proposed deliverables are listed:
Catch up with the ideas of the latest digital information management system and management roadmap of Industry 4.0.
Immediately identify their current industry level (Industry 2.0, 3.0 or 4.0) by conducting preliminary self-assessment and find out suitable development methods from the implementation guideline compiled by experts of Industry 4.0.
Minimize the investment amount on hardware and software by referring to the suggested solutions of various levels and complexity in the implementation guideline.
Time-saving as the latest information of Industry 4.0 can be obtained through the Platform.
Obtain hands-on and practical knowledge on how to implement Industry 4.0 effectively and economically.
30
Based on our acquired price information on overseas industry 4.0 experts, SMEs have to pay a much higher cost if they implement Industry 4.0 on their own without industry-wide program support. The high cost of manpower and financial resources would be needed to be spent on collecting consolidated information, and the latest development of Industry 4.0 to understand the knowledge and implementation know how. Also, it would bring a tremendous financial burden for HK SMEs if they hire overseas experts to conduct Industrial assessment and project ideas identification based on their operation individually. The SMEs may also suffer significant loss if they invest unsuitable hardware and software, conduct unsuitable implementation methods, or even misunderstand their level of maturity. Overseas experts will provide Industry 4.0 detail theory, definition, standards, best practices, implementation know-how, etc. from overseas institutes and overseas enterprises as innovative and technical inputs. Overseas experts will develop the draft benchmarking model, high-level training, conduct 4 HKSMEs benchmarking studies, draft strategic upgrade mapping, identifying Industry 4.0 project ideas for four HKSMEs, etc.
31
Section
Two: Industry 4.0
Core Principles
32
Concept of Industry 4.0 The term Industry 4.0 is based on the previous global industrial revolutions throughout the last centuries. The commencement of the 1st Industrial Revolution is closely linked to a small number of innovations. Foremost the power machine became suitable and was introduced into industrial use in the second half of the 18th century.
Figure 1 Effects of the different industrial revolutions
The 2nd Industrial Revolution came with the analysis and optimization of workflows. Applying science to engineering processes, labor was allocated according to specific process steps (a division of labor).
Overhead productivity
compared to 2010
Computer operations
per second per 1$
In dependence on: H.-J. Warnecke (1992) Fraktale Fabrik
19001825
#Op./(s*1$)T€/(c*a)
CollaborationSteam machine Automation
Yearly consumption of
energy in Germany
Medium per capita income
in Germany
%
30
GWh/a
2,5
2,0
1,5
1,0
0,5
3,0
3,5
1. Industrial Revolution 2. Industrial Revolution 3. Ind. Revolution 4. Industrial Revolution
1925 1950 1975 2000 2025 2050
25
20
15
10
5
600
400
200
800
1,E+09
1,E+00
33
Productivity increased due to the standardization of best practices and the elimination of waste. The 3rd Industrial Revolution introduced automation technology into industrial use by the developments of electronics and computers. Production lines were automated with industrial robots and Programmable Logic Controllers (PLC). The 4th Industrial Revolution integrates the physical and digital world in production companies creating value by digital-driven business models and further increase in productivity and efficiency. Industry 4.0 is driven by recent trends in both the cyber and physical world. The single source of truth is the practice of structuring information and schemata in a single database. Any possible linkages to the data are established by reference only. The single source of truth is the basis for reliability and consistency in the company data necessary for data analytics and predictions. The digital players in the market drive the cooperation in business and social communities. Information Technology (IT) supports the storage of data in the cloud, provide methods for data mining and high-speed computing. Automation processes by including sensors become highly robust and cost-efficient and provide open IT-Systems. Industry 4.0
34
fosters collaboration and productivity by improving human/human, human/machine, and machine/machine interfaces.
Figure 2 Drivers for Industrie 4.0
Additionally, the adaption of Industry 4.0 is enabled by
recent changes in sensor technology. Sensors are
becoming smaller, cheaper, and more versatile. They
can measure more data and can interact with each
other.
Furthermore, networks are established ad-hoc and
automatic. The data transfer rate and the number of
network partners significantly increases. Data sources
are linked together from different and heterogeneous
35
sources. Thus, diagnostics analytics and predictive
modeling are possible such as pattern recognition.
Apart from the data side, the interaction with the user
becomes the central role. The human-machine-
interface (HMI) is user-specific and suited to the needs
of the customers. Assistance systems help in manual
processes such as maintenance work. Methods from
augmented reality interact link the digital to the
physical world.
"Industry 4.0" promotes industrial applications and
develops innovative technologies while encouraging
smart production, upgrading and transformation,
researching and developing industries suitable for
Hong Kong-based industries, and creating high-quality
and diverse employment opportunities.
The "Industry 4.0" concept encompasses a
fundamental shift from centralized control to
decentralized enhanced control to create a highly
flexible production model for personalized and digital
products and services. In this model, traditional
industry boundaries will disappear, and new forms of
activity and forms of cooperation will emerge. The
36
process of creating new value is changing, and the
division of industry chain will be reorganized.
Additionally, the adaption of Industry 4.0 is enabled by
recent changes in sensor technology (Figure 3).
Figure 3 Enablers of Industry 4.0
Sensors are becoming smaller, cheaper, and more
versatile. They can measure more data and can
interact with each other. Furthermore, networks are
established ad-hoc and automatic. The data transfer
rate and the number of network partners significantly
increases. Data sources are linked together from
different and heterogeneous sources. Thus,
diagnostics analytics and predictive modeling are
possible such as pattern recognition. Apart from the
data side, the interaction with the user becomes a
central role. The human-machine-interface (HMI) is
Sensors:§ become smaller, cheaper,
more versatile
§ can measure more data
§ can interact with eachother,
etc.
Ad-hoc networks:§ Automated recognition
and utilization
§ Significant increased data
transfer rates
§ Increasing number ofnetwork partners, etc.
Smart Data:§ Linked data from
heterogeneous sources
§ Diagnostic analytics
(pattern recognition)§ Predictive analytics,
etc.
HMI:§ User-specific Human-
Machine-Interface (HMI)
§ Assistance Systems
§ Augmented Reality,
etc.
37
user-specific and suited to the needs of the
customers. Assistance systems help in manual
processes such as maintenance work. Methods from
augmented reality interact link the digital to the
physical world.
“Industry 4.0" will pay special attention to attracting
SMEs to participate, and strive to make SMEs users
and beneficiaries of a new generation of smart
production technology, and also become the creators
and suppliers of advanced industrial production
technology (Mingxing, 2019).
For a structured approach towards understanding the
different aspects of Industry 4.0 one can use the
Smart i4.0 Navigator (Figure 4). The navigator gives a
structured overview over the interaction of a unique
business model (Uniqueness), technology driven
applications that implement the business model
(Application) and the technologies that enable these
applications (Enablers). The central element of the
navigator is value creation. Value from the viewpoint
of a company doing business can be created in the
form of Growth & Revenue or in the form of enhanced
Productivity & Efficiency affecting costs of the
38
company. To drive growth & revenue the other
important viewpoint regarding value creation is the
customers ́one. For a successful business it is of
utmost importance which value it creates for the
customer. This value determines how successful a
company will be in gaining and keeping satisfied
customers and ultimately how successful a company
will be in generating growth & revenue. In order to
make Enablers, Applications and Business Model work
successfully together with the ultimate target of value
creation a company needs a coherent strategy and
organizational structure (Strategy and Organization) as
well as a supportive Mindset and Culture. These
aspects form the framework and internal environment
for a prosperous business.
39
Figure 4 Smart i4.0 Navigator (Source: KEX AG)
Building corporate uniqueness (Innovative Digital Business model) The business model is the foundation of a company and
determines whether it will be successful and grow in the middle
and long run. The best business idea will fail if there is no
functioning business model beneath it. Furthermore the
business model can differentiate a company from its
competitors leading to a unique position in a market and
thereby significant competitive advantage.
40
Figure 5 Smart i4.0 Navigator – New Digital Business Models (Source KEX
AG)
The business models evolving from Industry 4.0, will go beyond traditional business methods. Due to the possibility to add sensors to the products and machinery, a new quality of data will be available. Enabling the analysis of user data along the whole product life cycle, which will result in data-driven business models and new add on services which can additionally be offered, such as predictive maintenance on demand. When companies aim to develop such new business models and services, it is necessary to develop upfront a digital vision for the company and a holistic strategy
41
which will be introduced with the support of a defined roadmap. The establishment of a digital roadmap to enhance the common understanding and vision of Industry 4.0 at all levels across the organization is a first step in changing the mindset of the company towards a more digital one. Business model innovation has changed the face of all walks of life and redistributed billions of dollars in value. Retailers like Amazon are entering the market in a groundbreaking business model.
But it's not uncommon to write a business model of innovation in business models like Apple Computer
42
("Apple"). The analysis of the major innovations of the old companies over the past decade has nothing to do with the business model.
In 1975 • Weight: 81⁄2 US-Pound (about 3.9 kg) • Size: 83⁄4 x 6 x 9 inches (approx. 22 x 15 x 23 cm) • Image quality: 100 x 100 primitives (0.01 million pixels), black and white • Save pictures to tape: Each photo takes 23 seconds. • Pictures are sent to TV: Each photo takes 30 seconds. New business models often cause an industry to disappear. Kodak has a long history but finally went bankrupt in 2012. Texas Instruments published the first patented digital camera in 1972. Kodak is aware of the potential of this new technology. Later, in the
43
1990s, a new technology of digital images related to Microsoft was launched.
Figure 6 Stephen Shasen and the first digital camera
When the first digital camera entered the market in 1999, Kodak predicted that digital cameras accounted for only 5% of the market in ten years, and analog cameras remained 95% strong. In 2009, the reality was different, and the analog camera had only 5% of the market, but it was too late. Between 2008 and 2008, Kodak reduced the number of employees by more than 80%. In 2012 Kodak filed for bankruptcy protection.
44
It has been found that the average profit margin of the innovative business model has increased by 6%. Therefore, managers believe that the advantages of innovative business models are more important than product or service innovation.
The methodology of the St. Gallen business Model Navigator supports the development of new business models. The Navigator focuses on four main aspects and questions which should be answered when developing a new Business Model. The four main questions are:
- What do you offer to the customer? - Who is your target market?
Figure 7 St. Gallen Business Model Navigator (Gassmann, 2013)
45
- How is the value proposition created? - How is the revenue created? (Gassmann, 2013)
The main areas of the Business Model Navigator are further described in the following. The “who question” targets the customer – asking the following question is mandatory: Who are our target customers? For any successful business model, a company must understand exactly which are the relevant customer segments to address and which are not. The customer is, therefore, at the center of the business model.(Prof. Oliver Gassmann, 2019) “What” focuses on the benefit of the customer. It
describes what is offered to customers in order to satisfy their needs or solve problems. In other words, the customer value proposition has to be defined upfront. (Gassmann, 2013) In order to achieve the value proposition, a company has to perform various processes and activities. These processes and activities - together with the resources, skills, and partners involved - form the 3rd dimension in the design of a business model. (Prof. Oliver
46
Gassmann, 2019) The value chain focuses on how the service or product is produced within the company. The 4th dimension explains why a business model is financially sustainable. It includes aspects such as cost structure and revenue mechanics. The revenue mechanism dimensions answer the central question of any company: How do you make a profit Focusing on the income model of the new business model. (Prof. Oliver Gassmann, 2019) In the process of innovation, the power of imitation and reorganization is emphasized. The phrase “no need to reinvent the wheel” describes the fact that, with careful observation, only a few phenomena are new. Often, innovation is a small change in something that exists elsewhere. Over hundreds of business model innovators, it is found that about 90% of the innovations are recombined with previously existing concepts. (Gassmann, 2013)
47
It is important to understand the 55 business models that make up many new business models. The Business Model Innovation Map by Prof. Dr. Oliver Gassmann depicts the 20 most popular models and companies that apply them to new business models. (Gassmann, 2013) For example, the RAZOR AND BLADE model can be traced back to Gillette's 1904 move to sell primary products (razors) at low prices and make money from more expensive consumables (blades). This model defines the value proposition and revenue logic of the business model and has since expanded to many industries. Examples include inkjet printers and ink
48
cartridges, blood glucose meters and test strips, or Nespresso coffee machines and capsules. In the business world, there are not many new business models. However, you can find many powerful application backgrounds and industries. When considering an innovative business model, existing business models can be used as inspiration. The Business Model Innovation Map is one of the tools to help with innovation. If they can be used elsewhere, why not apply them? This method brings external stimuli. (Gassmann, 2013) Another well known example for a business model innovation is “Power-by-the-hour” of British jet engine manufacturer Rolls-Royce. The company shifted its business model from selling turbines and aftermarket services towards a wholistic service offering charging its customers by the time of turbine usage. The engine will remain the property of Rolls-Royce and the company will also be responsible for the maintenance and repair of the engines. In the context of the 55 business models by Prof Gassmann this is an example for “Servitization”.
49
Figure 8 Power-by-the-hour – Servitization
With regard to the St Gallen Business Model Navigator Rolls Royce has fundamentally changed its revenue model (Value), its value chain (How) as well as its value proposition (What) while the target customers (Who) remained the same. As shown in Figure 6 sensors, network connectivity and data analytics are the enabling technologies working together in smart product as application in an innovative business model. Smart Factory and applications (smart solutions, smart innovation, smart supply chain, smart production)
50
The smart factory is a significant theme of Industry 4.0, and it is also the specific basic scene that reflects Industry 4.0. The "smart factory" is not just a physical factory, but also a virtual factory that supports decentralized network manufacturing. Smart factories are considered to be a key component of smart infrastructure, with a core focus on smart production systems, processes, and the implementation of networked branch production facilities. In the future, the business will establish a network that uses information physics systems as a carrier, including mechanical equipment, storage systems, and
51
production equipment. Regarding the manufacturing sector, cyber-physical systems will include smart machines, warehouse systems, and production facilities that automatically exchange information, trigger actions, and coordinate control. Thereby, the quality of production, design, material resources, supply chain, life cycle management, etc. are improved. Smart factories have been using new production methods, and the products are uniquely tagged to trace their footprint throughout the life cycle, showing the current status and future processing methods. The embedded production system will form a horizontal network with the vertical network of the factory or enterprise business process and the dispersed value chain and form immediate management from the procurement of raw materials. To achieve the above vision, Industry 4.0 needs to include the following elements: Cyber-Physical System (CPS), Internet of Things (IoT), Service Networking (IOS), Cloud Computing, Big Data and Smart Factory. The realization of these elements depends on the application of advanced equipment. The technology is based on the Cyber-Physical System (CPS) and the Internet of Things (IoT). In the rapid development of
52
the Internet, more and more powerful and independent micro-computers (embedded systems) have realized factories that cooperate with other microcomputers and the Internet, the physical world and the virtual world (cyberspace) with information physics systems. The implementation of CPS modernizes production methods. Industry 4.0 depicts a blueprint for a smart factory: in a smart factory, people, machines, and resources naturally collaborate and collaborate as if they were in a social network. Smart products know the details of how they are made and how they will be used. They will assist the production process by answering such questions as "When was I made" or "The set of parameters on the machine should be used to handle me" through RFID or other embedded systems? "My next stop will be sent there. Moreover, other issues". Smart factories are connected to smart mobility, smart logistics, and smart system networks. Smart factories are characterized by end-to-end engineering manufacturing. This end-to-end engineering manufacturing not only covers manufacturing processes but also includes manufactured products and product research. Develop processes to integrate both digital and physical systems seamlessly. Smart
53
factories will make increasingly complex manufacturing processes for workers more manageable while making the manufacturing process attractive while making the manufactured products environmentally sustainable. Critical indicators of production system performance are yield, quality, cost, and component accuracy. Industry 4.0 proposes to use data to analyze and understand the factors that affect the above-mentioned key indicators of the production system and to predict and monitor the risks that may occur — the key to predictive manufacturing. Today's production systems in most factories use commercial management software to assist plant managers in obtaining information such as overall equipment efficiency (OEE), to timely grasp and respond to the influencing factors and results produced in the production system. However, more in the production system is the influence of invisible factors, such as the degradation of equipment performance, the lack of precision, and the waste of resources. The accumulation of invisible factors often causes visible influencing factors to a certain extent. For example, the decline of equipment eventually leads to downtime, and the lack of precision eventually leads
54
to quality deviation. Therefore, predicting and managing these invisible factors is the key to avoiding the influence of visible factors. In Industry 4.0's factory, Self-Prediction functions become new features in monitoring and control systems that help users understand machine performance degradation, remaining available time, lack of precision, and various factors. Quality and cost impact. Also, the machine can be predicted by the fusion of the performance of the components and the peer-to-peer. This predictive capability allows the plant to take timely maintenance measures to improve management efficiency and thereby optimize machine uptime. Finally, the health information of the machine can also be fed back to the machine design department to form a closed cycle lifecycle update design that ultimately achieves worry-free production. This predictive analytics approach enables both product and manufacturing systems to be self-aware and self-maintaining. Product Prediction Service and System Forecasting combine information from manufacturing systems and supply chain systems to enable products to generate proactive service requests and further predict/prevent potential failures.
55
Smart Solution:
Figure 9 Smart i4.0 Navigator – Smart Products / Solutions (Source KEX AG)
The smart solution includes products or services.
Products/services are aware of customer behavior and
generate user data connections to the operating
platform. Provides value-added services to customers
by observing and analyzing user behavior through
sensors. For example, connecting and sensing infusion
pumps can promote safety, safety, and timely
personal assistance while reducing logistics costs. It is
56
expected to increase the annual growth rate of the
market by > 30%.
A new generation of smart products, such as mobile
phones, automobiles, and home appliances, has
innovative features that adapt to the specific needs of
the user and the specific environment, and this
adaptability is one-way, and the smart product will
contain different components and embedded
software. Moreover, smart products can interact with
users in a smart way, such as the following four major
interactive projects:
Four characteristics of smart products:
I. Background and awareness Perceived
environment Interactive and
nearby equipment Interaction and
background
II. Safety and security Check user
permissions Provide
remote use function
57
The main functions of smart products:
Because the new generation of smart products is a
relatively advanced product, the design and
manufacturing are very complicated, usually contain
thousands of components and need to achieve the
overall operation, so the system-level engineering
design has become a pivotal position.
As with traditional methods, companies need to
design each subsystem separately and then spend
billions of dollars on physical testing later in the
product design process, and if design changes are
needed, the cost will be very high and time-
consuming, traditional The actual test method may
not provide all the information needed to eliminate
product risk and ensure product success. So in the
III. External information About obtaining
external data/services
Integrate social networks
IV. User profiles Distinguish
product users
58
new era of Industry 4.0, a part of smart products
emphasizes product lifecycle management,
engineering simulation and simulation software
applications to provide these data and manage and
quickly and finely adjust the entire product system in a
virtual environment. The entire product development
process to production can be easily mastered.
Smart flower pots: Smart pots do not require soil. As
long as the lighting and irrigation systems are set up,
they can provide enough nutrients for the three
important stages of seed germination, seedling
growth and harvesting. It can grow almost all types of
plants with an acceptable maximum height of 2
59
meters. The pots are equipped with 18 LED lights,
which adjust the light intensity according to the
growth of the plants. The built-in irrigation system
also has this capability.
Smart luggage: The smart luggage incorporates many
useful functions. The built-in digital scale can indicate
the weight of the items carried by the user; and the
application software can check whether the luggage is
overweight; the built-in battery can charge the
electronic device. In addition, it also configures a
digital control lock that users need to use to turn on
their smartphone. If the suitcase is unfortunately lost,
the suitcase will be automatically locked. When your
60
suitcase is lost somewhere, it will send a reminder
notification to your phone and help you find it through
a close-range map navigation.
Smart Trash Can: An US company has developed a
solar-powered trash can that automatically
61
compresses in 41 seconds after the trash is full and
notifies the cleaners via the wireless network. This
smart trash can is especially suitable for areas with
high traffic, such as shopping centers, amusement
parks or sightseeing areas. The device is 128 cm high
and weighs about 136 kg. The normal capacity of a
trash can is 120 liters, but it can accommodate up to
five times the volume of waste by compression
technology.
On the other hand, the smart service referred to in the
era of Industry 4.0 is no longer a model of remote
artificial online response and after-sales product
service in the traditional sense, but rather focuses on
the use of big data formed by the entire industry chain
for comprehensive data analysis and the mining of
valuable data provides users with customized
information for their specific activities and needs to
assist their specific activities in decision-making.
This part is the core content of smart production. It
can collect the original information of customers and
62
accumulate into a powerful database to provide the
basis for building the structure model of demand. It
can further explore the hidden needs related to
identity, work and life status. In order to provide
customers with accurate and efficient services.
Information and network-based electronic services are
infiltrating into various industries and fields of the
social economy, supporting the transformation of
modern society from a manufacturing economy to a
service economy. In the Internet environment,
collaboration between enterprises is closer, and the
organization and operation mechanism of enterprises
are becoming more service-oriented. This is a new
enterprise organization model that implements the
flattening of organizations in the form of business
components, improves the operational efficiency of
enterprises, and realizes the need for business
collaboration across enterprises.
"Context-awareness" applied to smart products is that
service systems and service networking provide
63
efficient and reasonable services to customers based
on the time, place, and activities of customer
information and services. The system architecture of
context-aware services includes sensor layers and
scenarios. Perception engine, repository and business
service layer and execution process, including
situation information collection, situational reasoning,
business service invocation, and analysis of the
theoretical and technical issues involved.
Cloud computing is the key technology for computing
resource service, and how cloud resources and service
applications are actually utilized is an important issue
of concern. Linking the common network resource
sharing and application integration requirements of
various industries with the core ideas of cloud
computing, emphasizing the important role of virtual
resource centers and domain services in applying
cloud computing concepts.
Smart services involve service computing and service
management. Modern service management is paying
64
more and more attention to the role of customers in
the process of creating service value together,
establishing a network of communication with
customers, further presenting production information,
increasing production transparency and meeting
customer-defined requirements.
The four major categories of the main functions of smart services:
I. Optimize use Forecast user
needs Collect location
related services Optimize services
through collected usage data
II. Ecosystem Provide an ecosystem
platform Personalized user
experience Selling collected usage
data
III. Resources Arranging the use
of resources and infrastructure
IV. Community Integrate community
services Users can use their
personal electronic devices to query
65
resource details through the network
Provide remote user support
Smart innovation:
Figure 10 Smart i4.0 Navigator – Smart Processes (Source KEX AG)
Smart innovation provides an early user experience
for the fuzzy front end and agile development teams.
As a result, data-driven engineering and open
innovation have improved customer personalization
66
and exploration of unknown areas, while the company
has a positive attitude toward future innovations.
Example: The user experience has been incorporated
into the product testing phase and a disruptive
network is used to create products and technologies
with open and innovative user data drives.
Smart innovation combines all of these concepts,
including system-level quality, attributes, features,
functionality, behavior and performance. Through the
integration and integration of advanced
manufacturing, information processing, artificial
intelligence and other technologies, smart equipment
can form an smart production system with self-
organization and self-adjustment functions such as
perception, analysis, decision-making, execution, and
67
independent learning, as well as network and synergy.
Production facilities.
In the era of Industry 4.0, devices with IoT concepts
such as computers, smart phones, smart TVs, smart
robots, smart wearable devices, etc., have been
network terminals since their birth; traditional air
conditioners, refrigerators, automobiles, machine
tools, wind turbines, etc. will be new members of the
future Internet of Things, they will connect to the
network world, forming a variety of smart networks.
The process of smart equipment can be carried out in
two dimensions: stand-alone intelligence, and smart
homes, smart production lines, smart workshops, and
even smart factories formed by the interconnection of
devices. This process will continue to deepen and
progress with the evolution of ICT innovation
applications.
68
Smart supply chain:
Figure 11 Smart i4.0 Navigator – Smart Networks (Source KEX AG)
Based on a transparent visualization supply chain,
transportation logistics, business operations, and
production engineering are distributed to different
units in the supply chain. Example: Electronic kanban,
instant notification to suppliers that pallets and boxes
need to be refilled.
The smart supply chain utilizes a new generation of
information technology to enable the logistics system
69
to have the ability to sense, process, self-learn,
analyze and make decisions and solve some of the
problems in logistics. The smart supply chain is
connected with smart production and other networks.
End-to-end connectivity for customer-centric logistics
services. Leverage integrated intelligence technology
and support with cloud computing, big data, Internet
of Things, mobile Internet and CPS, as well as technical
support such as Global Positioning System (GPS) and
Earth Information System (GIS).
The future development of the smart supply chain will
reflect four characteristics: intelligence, integration
and layering, flexibility and socialization. In the
process of logistics operation, a large number of smart
operations and decision-making are involved; with
logistics management as the core, the integration of
transportation, storage, packaging and loading and
unloading in the logistics process and the hierarchy of
smart logistics systems are realized; the development
of smart supply chain.
70
The concept of “customer-centered” will be more
prominent, and production will be flexibly adjusted
according to changes in consumer demand, and
flexible to meet market demand. Development will
promote the development of the regional economy
and the optimal allocation of world resources to
achieve the goal of socialization.
The smart supply chain can be applied to the internal
decision-making of the enterprise. Through the
analysis of a large amount of logistics materials, the
decision of the logistics customer's demand,
71
commodity inventory, logistics smart simulation, etc.
is made.
Automate logistics management (acquisition of data,
automatic classification and automatic access, etc.) to
make logistics operations more efficient and agile.
Smart supply chains can also reduce the cost of
logistics warehousing. Actively acquire information in
the logistics process, and actively monitor the
transportation process and cargo status, as well as
proactive analysis of logistics information, so that
logistics operations are tracked and managed from the
source to achieve faster information flow.
Within the logistics enterprise, the external logistics
data transmission function is also realized
simultaneously, and the information is exchanged
with the service unit, thereby improving service
quality, accelerating response time, and promoting
customer satisfaction, and the integration of the
overall logistics supply chain will be closer.
72
The logistics field is one of the most practical
application areas of IoT related technologies. The
construction of the Internet of Things will further
enhance the intelligence, information and automation
of logistics. Promote the integration of logistics
functions. It will have a positive impact on the
operation of all aspects of logistics services.
The logistics system based on the Internet of Things
can realize the whole process of identification and
tracking of raw materials, parts, semi-finished
products and finished products on the entire
production line. Reduce manual identification costs
and error rates by using Electronic Product Code (EPC)
technology, you can quickly identify the required raw
materials and components from a wide variety of
inventory by identifying electronic tags. Automatic re-
formation of detailed replenishment information to
achieve balanced production and steady production.
The Internet of Things can make the management of
articles more transparent and visualized during
73
transportation. By attaching EPC tags to goods and
vehicles transported in transit, RFID check-receiving
devices are installed at some checkpoints of the
transport lines, so that enterprises can understand in
real time. The current location and status of the cargo.
Realize the visual tracking management of
transportation goods, lines and time. In addition, it
can help achieve smart scheduling, such as predicting
and scheduling the best driving routes in advance,
shortening transportation time and improving
transportation efficiency.
In warehousing management, IoT technologies (such
as EPC technology) can automate the inventory
management, and pick-up processes of warehouses,
thereby improving operational efficiency and reducing
operating costs. The goods stored in the warehouse
can be freely placed, which improves the space
utilization of the warehouse. Through real-time
inventory, the inventory can be quickly and accurately
grasped, the replenishment can be carried out in time,
the inventory management capability can be
improved, and the inventory level can be lowered. At
74
the same time, accurate and efficient extraction of
different goods according to instructions, reducing the
outbound operation time.
The use of EPC technology in the delivery process can
accurately understand the storage location of the
goods, which can greatly shorten the extraction time,
improve efficiency and speed up the transportation.
By reading the EPC label and checking with the order
form, the accuracy of delivery is improved. In addition,
you can also know exactly how many goods are
currently in transit, the origin and destination of the
shipment, and the estimated time of arrival. When the
EPC-labeled goods are picked up by the customer, the
smart shelves will automatically identify and report to
the system through the network. The logistics
enterprises can realize the agile reaction operation
and predict the logistics demand and service timing
through the historical records, so that the logistics
enterprises can better carry out the logistics
enterprises. Active marketing and proactive services.
75
A German company in the logistics center of
Humboldt is a very representative example for
Industry 4.0. Inside the Humboldt Logistics Center, you
will see a box of car engine parts piled up, as the green
light lights up, the stairway sends out a box of parts,
with the conveyor belt reaching the terminal; the
worker puts the box part at the terminal on the
luggage rack. There, it will be shipped with more parts
to the assembly point of the assembly plant, waiting
for assembly.
All parts of the Humboldt Logistics Center production
line have a unique RFID code that automatically
exchanges messages with the checkpoints along the
way, increasing overall productivity. Here, each time a
worker takes out a box of parts, he clips the "watch
strip" that records the product information into a
rectangular plastic clip. The clip is attached to the box
with a radio frequency identification code at the
bottom of the clip - the ID of the box. After each
production step, the card reader automatically reads
the relevant information and then feeds it back to the
control center for processing.
76
For example, when the shipping truck carries the box
parts out of the logistics center, the assembly plant
5000 meters away can get dynamic information.
Before the assembly workers bring it to the
production line, the logistics center and the supplier
can make a decision on whether to replenish the
goods based on the real-time information received.
At the Humboldt Logistics Center, there is a fuel
injector for assembling diesel engines. The main
injector body and the internal ejector are provided by
different suppliers, but one of the two parts is printed
on the sample QR code. This is done to speed up visual
management. When labeling a single product, it is
more convenient to use a two-dimensional code than
a radio frequency code. When labeling each box of
parts, a radio frequency identification code is used.
There are several ways to attach a smart tag to a
product: barcode, QR code, RF code or sensor. When
the Humboldt Logistics Center introduced the RF code
77
system, it cost hundreds of thousands of euros, but it
turns out that such investment is quite worthwhile.
When the new system is put into use, the factory
inventory is reduced by 30%, the production efficiency
is increased by 10%, and the savings can reach tens of
millions of euros.
The smart factory example of Humboldt Logistics
Center embodies this smart production process and is
highly compatible with the concept of lean
production, which not only avoids waste in the
production process, but also makes the entire
production process more accurate and efficient. In
addition, smart factories in the industrial 4.0 era can
achieve more advanced features. For example, the
production equipment can identify the maintenance
requirements and send relevant information to the
management personnel, and the management
personnel can remotely monitor the production status
and operation flow through the system. Thereby
optimizing the resource configuration and the like.
78
Smart production:
Figure 12 Smart i4.0 Navigator – Smart Production (Source KEX AG)
Smart production is an ideal production system. It
smartly edits product features, cost, logistics
management, security, production time and more to
achieve optimal product manufacturing for different
customers.
The smart production proposed by Germany refers to
the use of information physics systems, relying on
different sensors, industrial software, network
communication systems, new human-computer
79
interaction, etc. to realize mutual recognition and
interconnection among people, devices and products.
Effective communication, which promotes the close
integration of R&D, production, management, service
and Internet, promotes the development of
customized, flexible, green and networked production
methods, and continuously enriches and enhances the
global competitive advantages of Germany's own
manufacturing industry.
Production technologies such as sensors, data
analysis, etc. must be properly applied to the
production line, and production performance can also
be analyzed in real time to their key performance
indicators (KPIs). Examples: Effectively reduce
inventory, quickly configure machine mode changes,
production performance, better predictive
production, and fault prevention.
80
Based on the digital chemical plant, smart factories
use the Internet of Things and equipment monitoring
technology to not only effectively strengthen
information management and services, but also
clearly grasp the entire product sales process, and also
improve the controllability of the production process
and reduce the production line. Human intervention,
timely and accurate collection of production line data.
Through the emerging technologies such as smart
systems and smart networks, it rationally arranges
production plans and production schedules, and builds
a humanized chemical plant with high efficiency,
81
energy saving, environmental protection and
comfortable environment.
Real-time sensing, dynamic control and control of
large engineering systems through the integration and
deep collaboration of 3C: Computation,
Communication and Control technologies through the
Super Industrial Internet-Information Physics
Integration System (CPS) information service.
Products manufactured in smart factories have a
unique label in the production process that traces
their history throughout the life cycle, viewing current
conditions and future processing methods.
Unlike traditional products, smart products integrate
sensors, processors, memory, communication
modules, and transmission systems into products that
enable dynamic storage, sensing, and communication
capabilities to enable traceability and identifiability of
products. They will "know" how they are produced
82
and where they will be sent. This means that in the
huge information system of the smart factory,
production information can be quickly communicated
and integrated. Not only that, but in this production
process, "dialogue" and "communication" can be
carried out between raw materials, production
equipment, production lines and various related
management systems.
When there is wisdom between different people and
things, connections and information are everywhere,
the connection between equipment and equipment,
between people, between things and things, and
between people and things will become more and
more close.
Eventually, a system will be connected to another
system, a small system will form a large system, and a
large system will constitute a larger system, forming a
smart network.
Taking a smart phone as an example, each smart
phone is a system, and the interconnection between
smart phones will form a larger system. The
production link of smart phones is a system
integrating R&D, production, logistics, sales and
83
service. Of course, the production line of each smart
production equipment, the supplier of mobile phones,
and the enterprises that host mobile phone
manufacturing are also a system. And every customer
who uses a smartphone in our unit stores all the
information in the enterprise's customer management
system. It instantly senses, captures, evaluates,
selects, and transforms customers' needs.
These are just a few of the many complex systems
associated with smartphones, and smart production
can be imagined to be made up of these different
systems.
In Germany and around the world, a huge system of
super-complexity is taking shape. Machines in the
workshop (such as a smart phone), through the
update of the operating system to achieve functional
upgrades, through the industrial applications to
achieve a variety of functions Plug-and-play (Plug-and-
play), through the application design development
interface (API) to expand manufacturing ecosystem.
84
Smart machines are a complex group that can include
different production equipment: lathes, milling
machines, complete automated production lines,
industrial robots, precision instruments and test
equipment, 3D printing equipment, etc to automate
production processes through smart machines.
Intelligence, precision and environmental-friendly are
the basic elements of becoming a smart factory.
Industry 4.0 is not just automation
85
Implementation driven by technology
Figure 13 Smart i4.0 Navigator – Enablers (Source KEX AG)
Industry 4.0 is driven by recent trends in both the cyber
and physical world. The single source of truth is the
practice of structuring information and schemata only
in one database. Any possible linkages to the data are
established by reference only.
The digital players in the market drive the cooperation
in business and social communities. Information
Technology (IT) support the storage of data in the cloud,
86
provide methods for data mining and high speed
computing. Automation progresses by including
sensors, become highly robust and cost-efficient and
provide open IT-Systems.
In fact, SMEs do not have to have the resources of
large enterprises to achieve the "Industry 4.0"
standard. For Hong Kong SMEs to move towards the
level of "Industry 4.0", please refer to the following
five pragmatic methods:
1. Identify key IT applications
To play the role and value of "Industry 4.0", there is no
need to rush to add all IT applications in one go. First,
determine the areas that require IT support, such as
87
digital shop management, regular maintenance,
optimization of energy efficiency, advanced
automation and digital quality management. Focus on
installing the corresponding IT application.
2. Build a good foundation for IT
"Industry 4.0" is dominated by IT applications.
Therefore, enterprises that want to implement
"Industry 4.0" must first lay the foundation for IT. For
88
example, they must have a more complete
management system and database to prepare for the
future smart factory solution.
3. Understand the services of different technology
vendors
In the installation of IT applications, technology
vendors will generally provide assistance, but
"Industry 4.0" involves a variety of different
applications and it is difficult for a single supplier to be
responsible.
89
According to the experience of the HKPC, companies
start to look for different suppliers to provide
integrated solutions. Each supplier has its technology
strengths. As a user, you should understand the
services of different technology suppliers and find the
one that suits you best.
4. Build a strong and agile internal team
90
The team consists of colleagues from different
departments to plan and implement the development
blueprint for "Industry 4.0", discuss the progress of
related projects and provide necessary support. The
interaction of the entire cross-sectoral team can
condense the company's culture of innovation.
91
5. Piloting with a new business model
"Industry 4.0" integrates data from the supply chain,
allowing companies to develop new business models,
such as personalized, customized products and
services. Enterprises can use these new business
models as a pilot to grasp the concepts, then broaden
the application level and grasp the business
opportunities in the future.
At present, about 60% to 70% of Hong Kong
enterprises are still between "Industry 2.0" and
"Industry 3.0". Although they are widely used in mass
production, they are not fully automated. As more and
more overseas customers implement "Industry 4.0"
and individual elements of "Industry 4.0" are included
92
in the procurement requirements, Hong Kong
manufacturers must speed up the upgrade to
"Industry 4.0" in order to maintain their
competitiveness in the international market.
Therefore, "Industry 4.0" is not only a matter of big
international companies but also a topic of concern
for SMEs in Hong Kong.
Hong Kong has a world-class manufacturing base in
the Pearl River Delta. With the global business
network, sound IT infrastructure, and mature service
industry, Hong Kong has sufficient conditions to move
into the development of "Industry 4.0".
Also, the countries have already proposed "Smart
Manufacturing." With the development of this policy,
Hong Kong people in business are exceptionally
qualified to develop in this direction.
93
SECTION 3:
Industry 4.0
Maturity
Model
94
PRINCIPLE MATURITY MODEL
Maturity models are widely used for the assessment of
companies, technological systems, and engineering
processes. The first concept of maturity was used by
the National Aeronautics and Space Administration
(NASA) for assessing the readiness of components and
modules of flight/space products. Apart from a
technology-oriented point of view, maturity levels can
assess engineering/production processes, such as
Capability Maturity Model Integration (CMMI) or
Software Process Improvement and Capability
Determination (SPICE) models for quality evaluation.
The Fraunhofer-Institute for Production Technology IPT
and the Hong Kong Productivity Council (HKPC),
together with INC Invention Center, a cooperation of
Fraunhofer and RWTH Aachen Campus, have started
introducing Industry 4.0 concepts in Hong Kong since
2016. These approaches fit with the Re-
Industrialization strategy of the HKSAR Government.
The Hong Kong Productivity Council (HKPC) and the
Fraunhofer (IPT) developed a maturity model for
Industry 4.0. On the basis of the suggestions of the
German VDMA and the Acatach, the i4.0 Maturity
95
Model Integrated (i4.0 MMI) follows an operational
and hands-on approach fitting to the Market and
Environment in Asia. Furthermore, the i4.0 MMI has
been conducted with various companies and, thus,
outlines a practical view on Industry 4.0.
The Industry 4.0 maturity model for Hong Kong
Industry has had three levels preparing the
implementation of Industry 4.0 (-2 to 0), and four
progressive levels on reaching different Industry 4.0
maturities (1i to 4i). Preparatory levels are essential to
have the infrastructure to implement Industry 4.0, and
the following maturity levels of Industry 4.0 are
essential as each level provides the data and
knowledge needed to start building towards the next
levels.
96
Figure 14 Maturity levels of Industry 4.0 (Günther Schuh, 2017)
The application of the Industry 4.0 Maturity Index
within a company, helps to develop tailor-made
digitalization roadmaps for the introduction of Industry
4.0 to transform the company into a learning, agile
organization.
Impact on
development
process
Ind
us
try 4
.0 d
eg
ree
of
ma
turi
ty
Valu
e f
or
the
org
an
izati
on
Transparency Predictability Adaptability
Industry 3.0
What
happens?
Why does it
happen?
What will
happen?
How can an autonomous
reaction succeed?
“See”
“Understand”
“Be prepared”
“Self-optimization”
Visibility
Industry 4.0
Path of development
Enhancement of
data availability
Enhancing
interpretability of
big data
Improvement of
Predictability through
established patterns and
realistic models
Decisions based
on Smart Data
97
Agility provides a company with the ability to adapt
rapidly to changing environmental circumstances, and
in the more far-reaching sense even to fundamental
systemic changes, for example regarding the
company's business model. (Günther Schuh, 2017)
Through the introduction and development of Industry
4.0, manufacturing companies are capable to
significantly reduce the period between an event and
an appropriate action. (Günther Schuh, 2017)
The road to Industry 4.0 is individual for each company.
First of all, the individual starting situation must be
identified, analyzed and objectives must be defined.
The introduction of Industry 4.0 represents a significant
expansion of the digital skills and abilities to
manufacture companies and is embracing change in
many parts of the organization. Therefore, a step-by-
step approach has been developed to support the
transformation process within the company by not
radically changing the whole company but slowly
focusing on the most critical aspects. (Günther Schuh,
2017)
98
Therefore, in the first step, an analysis of the already
applicable levels is needed, and afterward, a stepwise
approach can be used to reach higher and more
efficient levels of Industry 4.0
In general, there are four questions that support the
identification of the right industry 4.0 level. Starting
with the visibility level that focuses on the question:
“What happens?” It is about seeing the actual data and
enhancing the data availability.
When the next level of industry 4.0 is reached the
following question can be answered “Why does it
happen?” – based on the available data one can
analyse and understand why a specific event occurred.
The next level is already more advanced and includes
the ability to predict. Asking the question “What will
happen?” – if a company is able to answer this question
based on a data set and can prepare themselves for
specific events the level of predictability is reached
which is marked by the improvement of predictability
through established patterns and realistic models.
The so far highest level which can be reached is
adaptability – focusing on self-optimization of
99
processes and applications. The leading question of this
level is “How can an autonomous reaction succeed?” –
whereby the decision which is made bases on smart
available data.
In many companies today it is still often the case that
in some areas not even the first question "What
happens?" can really be answered with the help of
collected data or that different levels are reached in
different business areas.
Before proceeding to the next chapter, we will first
describe and subdivide the individual levels in more
detail.
100
Not Ready (-2):
The level represents processes from Industry 2.0 and
3.0 predominantly. This means the company uses the
division of labor by an assembly-line work environment.
Eventually, first programmable controllers/logic are
introduced in order to control and automate process
steps.
Computerization (-1):
The first level describes the starting point for the
development path to a real industry 4.0 company and
assesses the basis for digitization, which is the
company's computerization. This Level describes the
isolated use of information technologies. It is already
well advanced in most companies and is primarily used
to perform repetitive activities more efficient. The
computerization represents a considerable benefit: It
enables a low-cost, low-error production and allows for
a precision that allows the manufacturer to produce
many new products.
Nevertheless, companies still have a large number of
machines without a digital interface. These often have
101
long lifetimes or are equipped with manual operation.
(Günther Schuh, 2017)
Connectivity (0):
The level represents the basic formation of a company
towards Industry 4.0. The company provides well-
functioning processes in all departments. Engineering
and Production Processes are optimized based on lean
management/production approaches. Manufacturing
processes are simple and can be measured (i. e. less
inventory). A mindset for continuous improvement is
embraced on all levels of the company hierarchy.
Mostly, there is no troubleshooting, and the process
goal can be reached in time with it is according to
quality requirements. The company embraces Industry
4.0 approaches and has a willingness to integrate and
adapt towards best-practices from Industry and
Research.
Real-time information generation (1i):
Sensors can capture processes from beginning to end
with a variety of data points. Processes and states can
no longer only be recorded in individual areas, such as
a production cell, but throughout the entire company
102
in real time. The data in the value chain of the company
can be automatically measured by sensor equipment
and provided to a standard and company-wide
database. The data is available in real-time and
acquired without manual labor. The data within the
company is consistent and provides a single source of
truth. The IT-Systems are integrated, vertically, and
horizontally along with the automation pyramid.
A digital shadow of the data already exists
In many cases, the data collected is only made available
to a small group of people who are directly involved in
the process. Further use of the data beyond the specific
process often fails due to system limitations. (Günther
Schuh, 2017)
Real-time information processing and integration (2i):
The following level focuses on the data, which is
aggregated in a company-wide database. The
integration of IT enables data fusion and a common
data set for analytics and forecasts (i. e. predictive
maintenance). In order to recognize and interpret
cause-effect relationships in the digital shadow, it is
necessary to analyze the collected data in the
103
respective context and to apply engineering knowledge.
The semantic linking and aggregation of data to
information as well as the associated contextual
classification represent the process knowledge
required to support more complex decisions.
Additional knowledge can be compiled due to
predictions and modeling.
Transparency is generated about specific operational
processes and sequences. (Günther Schuh, 2017)
Integration of cyber-physical systems (3i):
The 3i level enables the forecasting capability to
simulate different future scenarios and identify the
most likely ones. The company uses mobile assistance
systems for making decentralized decisions. The
human-machine interfaces (HMI) are matured in all
processes leading to efficiency and quick response
times for the operators (i. e. in case of emergencies).
Machines and robots are cooperating in order to work
on a standard process step (and goal).
This stage enables companies to anticipate future
events, make timely decisions, and initiate appropriate
response measures.
104
Intelligent, autonomous, and self-organized processes
(4i):
For the last level, the forecasting capability is the
prerequisite for automatic action and self-optimization.
Traditional manufacturing transforms towards an
intelligent and autonomous production environment.
Cyber-Physical Systems (CPS) automatically control and
act autonomously. The production has a high degree of
automation, is self-learning and continuously
optimized its processes and products.
The final level is reached when the respective company
can use the data of the digital shadow in such a way
that decisions with the greatest positive effects can be
made autonomously and without human intervention
in the shortest possible time and the resulting
measures implemented.(Günther Schuh, 2017)
For operations, simplified descriptions of these levels
are:
-2 Not ready: Certain fundamentals are not ready, no transparent processes defined
105
-1 Computerization: First steps towards digitalization have been done, but the IT landscape is not ready due to lack of basic connectivity
0 Connectivity: Fundamentals to start Industry 4.0 implementation are ready
1i Visibility: Data on all relevant processes is collected in real time throughout the operations
2i Transparency: Data is aggregated and analyzed in real time in such a way that reasons for situations and changes can automatically be found
3i Predictability: The basis of data and knowledge on the cause-and-effect relationships throughout the operations enables predicting relevant situations (maintenance need, order fulfillment times, …)
4i Adaptability: Strong, controlled models for
the behavior of the operations allow
automatic suggestions of decision options
with clear explanations of the implications
106
of each option and underlying scenario
analysis
Table 1: Maturity levels (summary description for
testing operations)
In order to provide a valid model and measurement,
the corporate structure is also analyzed and derived
four capability fields: resources, information systems,
culture and organizational structure. Combined, these
design fields represent the structure of the
organization.
Industry 4.0 Capabilities
Each design field is structured by two principles that
guide further development. Each principle bundles
capabilities that - depending on the benefit-oriented
development stages - must be built up successively.
The degree to which the skills are implemented
determines the degree of maturity of the principle.
These Capabilities are the following:
107
- Information Systems
- Culture
- Organizational Structure
- Resources
Figure 15 i4.0MC – Industrie 4.0 Maturity Center Analysis
Whereby Information Systems is divided up into the
principles information processing and integration of IT
Systems. The capability culture focuses on the
willingness to change of an organization and the social
collaboration within a company. The next capability
considers the organizational structure of a business
analyzing the dynamic collaboration in value networks
as well as the organic internal organization. Finally
108
resources will be analyzed as well considering the
structured communication and the digital capability of
an organization.
The following paragraphs will explore the individual
capabilities in more detail and analyze them.
Information Systems:
First of all, information systems are socio-technical
within which people and information and
communication technologies provide, process, store
and transmit information in accordance with economic
criteria. The design of information systems in
companies is crucial in order to make effective
decisions based on available data and information.
(Günther Schuh, 2017)
The evolvement of the digitalization enables
manufacturers to be able to take real-time data-based
decisions.
The software systems are vertically and horizontally
integrated into the IT-landscape. The digital tools are
interoperable with automatic file transfer/exchange.
The information systems capability is divided by two
principles, the first one concentrates on how the
109
information systems process and prepare the data for
decision support. The other principle focuses on the
integration of information systems for improved data
utilization and increased agility.
Figure 16 Overview of information systems capabilities (Günther Schuh,
2017)
As already described by the two principles the
information system capability is divided in two further
aspects.
Information System - Self-learning information
processing
The design of information systems in companies is key
to making effective decisions based on available data
and information. Aggregating different data sources to
build information and provide material to support
decision-making is a main aspect of the decision-
making processes for industry 4.0.
110
Only if these aggregated insights are available for the
employees and if these insights are adding value to the
company the full power of the principle can be
achieved. (Günther Schuh, 2017)
Information System integration
The aim of an integrated information system is to
guarantee the usage of universal data along the whole
value chain. This goal must be achieved through
incorporating the different already existing IT Systems
and enabling the combined usage of data. (Günther
Schuh, 2017)(Günther Schuh, 2017)
Figure 17 Optimum characteristics of a company’s information system
(Günther Schuh, 2017)
111
An early example for one of the first stages could be the
introduction of Product-Lifecycle-Management (PLM)
software which links data sources from different
discipline-specific systems together.
Organizational Structure:
Enabling a successful technical transformation and
implementation of new technologies strongly depends
on the organizational structure.
The capability consists of the internal organization of a
company in the form of organizational structure and
process organization as well as the positioning of a
company in the value-added network. The
organizational structure defines the necessary rules
and structures to enable collaboration within a
company and externally. The two leading principles are
therefore the organic internal organization and
dynamic collaboration within the value network.
(Günther Schuh, 2017)
Organic internal organization
The organic organization represents the opposite pole
to the mechanistic organization. It is characterized by
minimal control and a high degree of personal
112
responsibility on the part of employees. This makes it
particularly suitable for organizations in a dynamic
environment with well-qualified employees. (Günther
Schuh, 2017)
Figure 18 Overview of organizational structure capabilities (Günther
Schuh, 2017)
Dynamic collaboration within the value network
The smooth and automated exchange of information
between companies empowers more dynamic
collaboration and greater market transparency.
Hurdles for flexibility are aspects such as manual
enquiry, ordering and order processing. The
transparency of operational processes can be
significantly extended using current IoT technologies,
for example to the current production status of the
supplier or his quality level. The result is a more
113
effective exchange of information, goods and services.
(Günther Schuh, 2017)
Shaping already existing externa cooperation and
networks more effectively is a first step in reaching the
highest level of adaptability.
Figure 19 Optimum characteristics of an organizational structure (Günther
Schuh, 2017)
Resources:
The capability resources are defined as physical,
tangible resources. This includes on one hand the
employees of a company and on the other hand the
114
machines and plants, tools, the used material as well as
semi-finished goods and products.
When the workforce is considered a special set of
competences is necessary to generate the maximum
value of all the collected data points. The latency of
data and implementation can be reduced by
appropriate design of the technical resources. These
two described aspects lead to the principles of the
resource capability which are one, the digital capability
and two, the structured communication. (Günther
Schuh, 2017)
Figure 20 Overview of resource capabilities (Günther Schuh, 2017)
Digital capability
The competence digital capability is defined as the
basic requirements for information-based work and
learning – which enable the generation and analysis of
115
data. In order to build up this competence, both the
employees must be trained, and the necessary
technical equipment must be adapted.
Structured Communication
The basic prerequisite is the use of communication
technologies to create temporary networks that enable
interaction between resources. Especially in a world
where centralized management resources become
more and more complicated due to the increased size
and complexity of business processes. The creation of
control loops can have a positive effect on the reaction
speed and robustness of business processes. In order
to achieve these goals, it is necessary to bring together
all the actors involved in order to compare the target
systems.
Digital talents are available to drive the transition
towards Industry 4.0. The companies invest in
developing digital skills. The digital strategy and
training are aligned with each other. Product
companies launch employee exchange programs with
digital players.
116
Figure 21 Optimum characteristics of resources (Günther Schuh, 2017)
Overall it is important to supplemented existing
competence profiles of employees by extended IT
competence. Technical resources are supplemented
by a data processing layer to extend it to include
connected sensors and actuators and to generate
confirmation data. This are transformed into a digital
system by interaction between resources. There is
communication and interaction between humans and
technical resources as well as among each other in
such a way that both data and information can be
exchanged in real time and all stakeholder groups can
be integrated in the communication. (Günther Schuh,
2017)
117
Culture:
The internal culture is an important part of the
introduction of Industry 4.0, because without it the
company will not get the agility it needs. Instead, the
first questions to be clarified are how tomorrow's
internal behaviors should be designed and what skill set
of the employees need. It is only based on these
aspects that technologies can be identified and
introduced that support the desired way of working.
The willingness of employees to continuously change is
one major aspect of the capability of culture. Especially
to adapt and evaluate their own behavior to match the
constant change of the company. Agility is only able to
evolve with the first principle willingness to change of
the employees.
The second principle of culture focuses on the social
collaboration which accelerates the exchange of
knowledge within a company. The target state within a
company is that the workforce actions are led by data
and fact-based knowledge. (Günther Schuh, 2017)
118
Figure 22 Overview of culture capabilities (Günther Schuh, 2017)
Willingness to change
Five skills define the principle that employees of
learning, agile companies should master. These skills
should not be viewed in isolation but result from the
interplay of the willingness to change.
These five skills are namely: (Günther Schuh, 2017)
1. Recognize the value of mistakes
2. Openness to innovation
3. Data-based learning and decision-making
4. Continuous professional development
5. Shaping change
Social collaboration
The principle of social collaboration is created by three
skills and these skills accelerate the exchange of
knowledge in the company.
119
These three skills are:
1. Democratic leadership style
2. Open communication
3. Confidence in processes and information
systems
Social collaboration occurs in between coworkers with
partners and customers.
Figure 23 Optimum characteristics of culture (Günther Schuh, 2017)
Overall inhabits the company an open mindset towards
IT. The culture empowers digital leaders, rewards
through recognition and compensation, creates a
digital culture, and establishes a digital image for
120
recruiting. A digital culture code enables a common
understanding of digitalization for all employees of the
company.
121
Section Four
Questionnaire
on Maturity
level of
Industry 4.0
122
Questionnaire on Maturity Level of Industry 4.0
On the overall approach, what companies should do to
achieve industry 4.0 and to the benefit of it entirely.
The questionnaire with its assessment is the second
stage as described in Figure 24 Overview what
companies should do? The assessment aims to support
companies in evaluating their situation at first and then
to follow the third step identifying possible solutions
and planning company-specific industry 4.0
development paths. This is done to prepare the step-
by-step transformation to an agile company with an
actual business case behind it.
Figure 24 Overview what companies should do?
123
The questionnaire enables a gap analysis to figure out
which processes and departments the company is how
far and in which areas they need the most support and
development to achieve Industry 4.0.
This gap analysis will be achieved through the
evaluation of department and process. The four
different capabilities which were described in section
three of the book will be considered for each
department and analyzed and assessed by the maturity
levels, which were also described in section three. The
usage of the different maturity levels enables a full
assessment of the individual skills and readiness within
a company and more precise within different processes
and departments. The characteristics of individual skills
can vary significantly between individual departments.
Methodology in evaluation
Different industrial sectors differ very strongly in their
process flows, especially discrete manufacturing and
process manufacturing differ strongly. For this reason,
the assessment and, the questionnaire are individually
adapted.
124
In the first step, the departments and processes to be
evaluated are first recorded and the general
questionnaire and assessment areas will be adjusted to
the specific needs of the company.
Figure 25 Exemplary Process and Department Overview
Figure 25 is an overview of the different departments
and production processes which will be evaluated and
adapted. Only if a high level of industry 4.0 capabilities
is achieved within every area of the company, it is
125
possible to gain the full benefit of the Industry 4. 0
implementations.
After the actual processes and departments for each
company are aligned the questionnaire will be adapted.
Thereby questions for each department, are adapted to
the individual capabilities.
In the following, the questions are assessed by experts
and/or consultants from the area of Industry 4.0 on-site
at the company’s production facilities. Due to their
experience within different industries and countries,
they have a broad understanding of Industrie 4.0 levels
an maturity.
On-site at the different production facilities of the
company, it is necessary to conduct workshops with all
departments. This workshop will enable the experts to
get an understanding of the individual maturity level
within each capability of each department.
The workshop follows a standard, proven procedure
and includes following stated agenda topics:
126
Current Situation: Please outline the current
situation in the department and elaborate on
your expectations.
Challenges: Please explain current problems and
difficulties in your department.
Wish List: Please state wishes or improvements
for your department.
Industry 4.0: Please outline your strategic
perspective on Industry 4.0 (i. e. business plan,
human resources)
Questionnaire: The questions for each of the
capabilities within the different processes and
departments are assessed by the
consultant/expert.
Additional interviews and guided tours with the
relevant key contacts and stakeholders of each
department need to be scheduled.
The questionnaires questions focus on the maturity
level of each of the four different capabilities and
principles. The capabilities will be evaluated within
127
each department, and in the end, there will also be an
overall score given for the whole company.
Sample Questions
In total, the questionnaire contains 160 questions for
characterizing the readiness of the company for
Industry 4.0. 10-20 leading questions support each
capability. The degree of implementation is equivalent
to the level of maturity in the I4.0 MMI.
In the following, an overview of some of the questions
for different departments at different levels is given:
Considering the supply chain process, one question for
the capability information systems with the principle
information processing could be:
- Within the supply chain management, are there
any data analysis methods being used?
Based on the answer to this question and the extent to
which the data is used, the ability is then assessed and
classified using the maturity level. The question arises:
Are the data only visible (level i1)- or will the data even
be used for prediction (level i3).
128
Another exemplary questions in the area of supply
chain management related to the capability
information system could be:
- Do the employees have an overview of the
process interdependence of the whole company
and consider these influences?
This question focuses on the second principle of the
information system capability –digital capability. Due
to the answers given by the interviewed people, the
examinations and consultants will be able to rank the
particular maturity level.
Considering the next capability – resources whit its two
principles, there are also different questions for each
department. The two following ones are exemplary
questions for production assembly.
- How do the employees communicate with each
other? Do they use special supporting tools?
- Is the production process vertically and
horizontally integrated into the company?
129
The first question aims to get a better understanding of
the communication structure and how advanced the
communication processes are – focusing on the
principle of structured communication.
The second question seeks to get a better knowledge
of the maturity of the IT systems and their integration
– concentrating on the principle of integration of IT
systems.
In order to give an example of quality control issues, we
evaluated the competence of the department in the
area of organizational structure.
The first question which focuses on the organic internal
organization – whereby the maturity can be defined
asks.
- How does the cooperation between the
coworkers look like? Are there any defining rules
and regulations for it?
Another representative question focuses on the
dynamic collaboration in value networks – especially
130
considering the impact in external networks or
cooperation.
- Are the core competencies of the company
known and understood?
After all, also model questions for the capability culture
will be given for the production planning department.
The first questions consider especially the willingness
to change of the employees.
- How are mistakes dealt with in the department,
is there such a thing as a culture of mistakes?
The second question targets the social collaboration
within the department of production planning by
asking for the willingness to use already existing IT
systems.
In summary the examiner will be asking questions for
each of the described capacities and principles in each
department.
The aim of all the different interviews is getting
detailed overview about challenges, mindset,
131
capabilities and collaboration mode of each
department.
Figure 4 Summary of possible questions asked per department
The themes and topics which are covered in Figure 4
give an additional overview of questions asked during
the assessment at each department.
Meaning of the scale
When the questionnaire is completed, and the
assessment finished an overall score and scale can be
developed, based on the answers given as well as the
132
observed actions and interactions an i4.0 level will be
submitted for each question.
Afterwards individual scores for the capabilities within
the department will be given, followed by the
generation of an overall score for the department –
using the average score of all the question for one
capacity. This will lead then to the possibility to also
rate the average level of a complete company.
The scale which is used for the assessment bases on the
maturity levels which were described in section three.
An overview of the different level which are used for
the scale can be found in Figure 6.
In order to realize great improvements and profits, the
goal must be to achieve predictability and adaptability
in most areas.
133
Figure 5 Overview of the industry 4.0 maturity scale
As in Figure 6 shown the scale of maturity assessment
show on the one hand the targeted level of industry 4.0
maturity of a company – indicated by a green dot and
on the other side the actual achieved level of maturity
– indicated by a red dot. In-between the two dots a grey
area can be found which indicated the maturity gap
which has so be minimized through to initiative and
actions to actually reach the targeted Industry 4.0 Level
in each department.
134
Figure 6 Exemplary result and scale overview
Assessment result overview
The overall assessment result will be presented with
the overall maturity assessment and gap analysis
versus the target maturity.
The overview information includes:
Detailed assessment results for main processes
(production, products/services, etc.)
The overall maturity in different areas versus the
target maturity is detailed with specific
improvement recommendations
Frameworkconditions
Smart Solutions
Smart Innovation
SmartNetworks
SmartProduction
Business model
Smart products
Focus areas
Smart services
Agile innovation
Digitalized processes
Agile collaboration
Connected supply chains
Decentral production
Data driven excellence
New digital business models
Category
Resources
Strategy
Culture
IT
Framework
0i
Visibility
1i
Transparency
2i
Predictability
3i
Adaptability
4i
Maturity LevelIndustrie 4.0
Goal Current Gap
135
Figure 26 Exemplary Overall Industry 4.0 Maturity
These results can be used to focus resources on most
important challenges and are a tool for department
heads and the overall Industry 4.0 team to improve
challenges and use opportunities.
These results help to focus attention on challenges in
individual departments and often include digitalizing
information collected manually and using already
available data for improvements.
Approaches to the next steps after the assessment
usually include:
136
A roadmap to start the implementation of
necessary infrastructure as well as processes for
Industry 4.0 implementation
A suggested organizational structure and basic
strategic framework to enable integrating the
Industry 4.0 transformation into the organization
and ensure that the process is understood and
supported by all departments
A list of pilot projects clustered by improvement
areas to start the implementation of Industry 4.0
across the organization
Top Related