The initial euphoria surrounding Industry 4.0 has given way to healthy skepticism and a realistic assessment. The digitalization of industry does not just fall into your lap; Industry 4.0 is neither simply the next generation of automation technology nor is it simply the transfer of familiar software products to an industrial environment. Rather, Industry 4.0 is the consistent, real-time networking of all industrial things, the systematic collection and structuring of data along the three dimensions of life cycle, horizontal value creation and vertical business models and - based on this structured data - the efficient redesign of existing business models, but also the creation of beneficial, new software-based business models. And this is a really big challenge, as the structured collection of real-time data requires the error-free, complete description of the data sources - i.e. the industrial things.

1) The basic prerequisite for any digitalization of existing and new business processes is well-maintained master data. If the underlying master data is incomplete or incorrect, every automated, digital process will inevitably run incorrectly. For manufacturing companies, which often have to 'manage' several 10,000 finished goods and a comparably large number of raw materials, master data maintenance is a truly Herculean task. So if you are on the way to digitally transforming your company, harmonizing and maintaining the article master data should come first. In a digital agenda that presents all topics of the company transformation in a context and 'monitors' their successful processing, the chapter 'article master' should not be missing. The digitalization of business processes (smart business processes) is just as dependent on this as the digitalization of value creation (smart production processes) or the digitalization of products and services (smart products, systems and services).

2 Another, more general aspect is the consistent modularization of product structures and the conversion of manufacturing processes into 'batch size 1' oriented production systems. This is the only way to meet the desire for greater individualization of products and services while remaining competitive.

3 And last but not least, 'connectivity' is a key word for digital products and services. Digital devices must be fully described by their asset administration shell and thus enable integration into Industry 4.0 networks. As the asset administration shells are nothing more than a significantly expanded article master, the mechanisms available for selection are not new. However, most manufacturers and users lack a certain amount of operational experience - and all those involved are still at the beginning of a steep learning curve when it comes to application. For this reason, the first digital transformation projects usually involve the use of service providers who help to connect devices and data from the store floor with systems and software on the office floor.

Multi-stage development process

Such service providers can also be very helpful in the development of digital business models that use the integrated data. One example of such a service provider is Neoception, a start-up from Pepperl+Fuchs: in a multi-stage development process, this start-up supports its customers in an agile manner from the idea to the productive value-added service.

Neoception offers solutions for easily connecting RFID systems to the cloud. The retrofittable solution makes it possible to monitor and analyze processes in distributed production facilities.

© Neoception

In most cases, customers already have a concrete idea of what the future of their products could look like. The focus here is on savings and increased efficiency through the symbiosis of existing products with information and communication technologies. If the business analysis has not yet been fully completed, Neoception can also provide support here if required.

As soon as the added value has been determined, all potential users and their roles and all business processes relating to the service can be defined in the subsequent functional analysis. Only then does the actual implementation of the services begin - successively, starting with a small solution that is gradually expanded. This eliminates the need to write extensive functional specifications for the entire project at this stage, which greatly speeds up the process. Dispensing with requirement specifications also allows a rapid response to new findings, which can be incorporated directly into the development process rather than through complex change processes. Analysis and implementation from a single source ensure that the solution is implemented with minimal risk. Once the final test phase has been completed, the go-live takes place. Enhancements follow in an agile manner in further, similarly structured development rounds.

Throughout the entire development process, the focus is on early feedback from future users. Even in early phases, user feedback is obtained through demos that give a realistic impression of the later application and fed back into the development process as early as possible.

A cross-sectional task

After all the preparatory measures, it is time to formulate an interim conclusion. Where does Pepperl+Fuchs stand today in the digital transformation process? - First of all, all managers and the majority of the workforce now share the conviction that digital transformation is a cross-cutting task for all functions and areas. Each organizational unit must identify and evaluate its digitalization potential and implement it in individual projects.

The strong interdependence of many projects requires additional coordination of digital projects and a global roll-out of efforts. The Pepperl+Fuchs organization has now launched over 50 digitalization projects. Some of these require their own legal framework - such as the founding of the system integration specialist Neoception - or have since led to a joint venture, such as the 3D.aero joint venture founded with Lufthansa Technik at the turn of the year. Others suggest expanding certain skills and areas of focus, for example through further acquisitions. 3D/6D software, for example, is a possible direction of attack, which is in high demand from customers due to the successful marketing of 2D and 3D sensors.

The first digitalized business processes are currently being rolled out globally and both the efficiency gains achieved and the potential qualitative improvements to the process as such are considerable.

Authors:
Dr. Gunther Kegel is CEO of Pepperl+Fuchs in Mannheim and
Dr. Jörg Nagel is Director Technology and Operations at Neoception in Mannheim.