Industry 4.0, meet Watson Internet of Things

By | 8 minute read | December 6, 2016

The fourth industrial revolultion

As customers and citizens, we are surrounded by more and more connected devices every day – what we’re calling the Internet of Things. Yet, for all the buzz, the real value in the Internet of Things is in business-to-business applications, which will account of 70% of the value derived from IoT in 2018, according to the International Data Corporation (IDC.) The industrial world is seeing the same explosion of sensors connected to data in the cloud, advanced analytics and cognitive. Often this is referred to as the “Industrial Internet of Things” and it is a key component of Industry 4.0. But where did the 4.0 come from? What was 3.0, and why are you going to hear about it more and more? Welcome to the fourth industrial revolution!

A brief history of industrial revolutions

Beginning at the end of the 18th Century in Britain, we saw the shift from an agrarian economy to mechanical production. We captured the power of water and steam and drove machines like the mechanical weaving loom. We called this the first industrial revolution – Industry 1.0.

In the mid-1850’s electricity moved us on again. We created factories and built assembly lines and welcomed in a new age of industrial production and affordable consumer products for mass consumption. This was the second industrial revolution – Industry 2.0.

Information technology and electronics brought us the next ‘revolution’ in the 1960’s. Machines were equipped with programmable logic controllers and we all got comfortable with computers, everything started to become digital and elements of manufacturing moved into automation and robotics. Hello Industry 3.0.

That brings us to today and Industry 4.0. Let’s see how it got started. In 2012, at the Hanovver Messe Fair, Germany introduced Industrie 4.0 as the next wave of manufacturing innovation connecting embedded system production technologies and smart production processes to pave the way to a next technological age. What started in Germany with Industrie 4.0 has led to other major industrialized countries developing their own version of this initiative – all aiming to accelerate the 4th industrial revolution in manufacturing:

  • Industrie 4.0 – Germany
  • SMLC – Smarter Manufacturing Leadership Coalition – USA
  • Industrial Value Chain Initiative – Japan
  • Made in China 2025 – China
  • Innovation in Manufacturing 3.0 – Korea

The innovation of Industry 4.0

Today the term “Industry 4.0” has come to represent many innovations in manufacturing. These include flexible manufacturing, 3-D printing, lot size 1, autonomous systems, self-diagnose, self-awareness, the API economy, new delivery channels and business models, analytics and cognitive, predict and prescribe, natural language communication, self-learning and the Internet of Things. Quite a long list, and there are more – but today I want to focus on the Internet of Things and Industry 4.0.

The McKinsey Institute expects Industry 4.0 applications enabled by the Internet to Things to create a new surge of factory productivity. This would provide a productivity increase of 10 – 25 percent and would amount to as much as $1.8 trillion per year in 2025.

Three areas of value for IoT in Manufacturing

1. Intelligent assets and equipment

We make the “things”—the assets and equipment used in manufacturing processes—more intelligent, improving reliability and reducing downtime. We connect data from equipment and other sensors and integrate it with other important information (like weather and historical data from ERP and production systems). Operating both at the edge of the network and centrally in the cloud, we apply predictive analytics and prebuilt industry models to detect anomalies and failure patterns. Then we recommend corrective actions and manage their execution.

2. Cognitive processes and operations

We use cognitive analytics to deliver data-driven process improvements that enhance quality and productivity. With connectivity through our Watson IoT platform, we use analytics to correlate the many variables that contribute to process failure or quality issues. We can predict failure earlier than statistical process control and apply new forms of analytics (like image and audio) to determine issues from non-traditional types of data.

 3. Smarter resources and optimization

We optimize the resources engaged around production, whether that’s keeping production line workers safe, improving the expertise of the workforce, or optimizing energy consumption. For example, by connecting sensors outfitted on workers we can detect if they’re in hazardous conditions and help provide a safer work environment. We can also combine a worker’s expertise with the effectiveness of their tools to determine if the right worker/tool combo is in place to get work done. And we can monitor environmental conditions and energy consumption in the factory to reduce energy usage.

The three stages of manufacturing

How does bringing these three value creation capabilities together with Industry 4.0 influence the goods and services we consume? Introducing the three stages of the manufacturing process: designing, making and using. Across each of these three areas, Industry 4.0 is changing the way that products come to market.

1. How we use products today informs the designs of the future

Creating new features that the market demands and assuring reliable products will be key for manufacturers. An Infotainment company is taking this continuous engineering approach to managing their entire engineering processes for designing, developing, testing, deploying and managing their high-end systems.

Insight in product design is coming from the way we are using products today. The data we generate steers the products we’ll buy in the very near future. Indeed, it will guide not just product design, but move manufacturers into new areas. Michelin once made tires. They can manage fleets better with connected tyres data; guide drivers on how to save fuel and keep safe through changes in the way they drive; become instructors, teaching other companies how to travel the road more efficiently. Michelin moves from a tire manufacturer to a driving instructor.

2. Make

Sakishi Toyada introduced the ‘5 whys’ into his car company Toyota’s production lines. If there was a fault on the line, asking ‘why?’ five times found the human interaction that was usually at fault and could be fixed.

  • Q1. Why has the line stopped? A1. Because the belt is broken
  • Q2. Why is the belt broken? A2. Because the transmission drive has failed
  • Q3. Why has the transmission drive failed? A3. Because it was not lubricated
  • Q4. Why was it not lubricated? A4. Because it missed its scheduled service
  • Q5. Why did it miss its service? A5. Because an employee forgot to schedule it

With today’s sensors and analytics, and the context of external data that can influence wear and tear like weather, predictive maintenance can become widespread. Production lines can predict issues and schedule time to fix them, right down to product and component level. You can listen to manufacturing sounds. You can pick up unexpected sounds and identify what caused them. Then you can fix any issues to fulfil orders and maximise throughput.

A large European automaker worked with IBM IoT to analyze over 500 variables, such as machine settings and equipment maintenance activities. They used predictive models to identify adjustments that resulted in a 25% increase in overall production line productivity and a 50% reduction in time required to achieve process targets.

It is also important to ‘make’ safely

Wearable and embedded sensors make it possible to monitor workers and their surroundings to prevent them injuring themselves from falls, over-exertion, heavy machinery and many other hazards. This is great news given that 321,000 people die each year from occupational accidents. NorthStar Bluescope Steel, a steel producer for global building and construction industries for Australia, New Zealand and North American markets, is creating smart helmets and wrist bands to help employees stay safer in dangerous environments. Employees and their managers can respond to real-time alerts if their physical well-being is compromised or they don’t follow safety standards.

A German Engineering company specializing in automotive equipment and bearings is pioneering the development of ‘mechatronic’ components which combine both mechanical and electronic capabilities into individual parts which have the ability to monitor and report on their own performance.

3. Use

More and more manufacturing organizations are becoming deeply involved in the operation and service of the equipment they manufacture.

A major appliance manufacturer is using IoT and the Watson IoT platform to benefit all parts of their business, including a better understanding their end users, designing products based on extensive use data, accelerating detection of production and quality issues, transforming customer service; increasing first service call completion rate and avoiding unnecessary part replacement, as well as selling things like detergents, warranty extensions and replacement appliances.

One of the world’s largest elevator and escalator companies with operations in more than 50 countries and 40,000 employees believe that digital transformation is key to long term success. They are using Watson IoT and predictive analytics to remotely monitor and maintain over a million elevators. This is one of a wide range of major innovations throughout the years striving towards serving customers to perfection.

Revolutions are disruptive

Revolution is by its nature disruptive, and Industry 4.0 is no different from its predecessors. The work that people do will change. Sophisticated ‘aware’ robots could replace people doing manual, labour intensive work, repetitive activities or work in hazardous environments. New roles will emerge requiring new skills. The availability of those resources may be too low in the early days, slowing companies moving to Industry 4.0 models.

Where there is data there is risk. Hackers will hack and maintaining secure networks and keeping data safe will be paramount. This is particularly important when you consider all the devices we’re using and the connected ‘things’ we’re interacting with. Technology will continue to evolve rapidly. Do you update your phone each time a new handset comes out or do you wait? Scale that to production lines and the cost of waiting or moving increases exponentially. Fail to move sufficiently quickly and you risk losing out to another digitally transformed company.

The $15 trillion pay off

In ‘Defining and Sizing the Industrial Internet’ David Floyer estimated the value of Industry 4.0 at $15 trillion of global GDP by 2020. That comes from the increased efficiency of industrial plant equipment and long-term maintenance and management. It also comes from the contribution to adjoining Industrial Internet networks, and the value of disruptive new business models. If you’d like to find out more about Industry 4.0 and join the next industrial revolution, visit IBM Industry 4.0.