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11 Apr 2018

Industry 4.0 – We are already moving forward! Why aren’t you?

John Bensalhia

“In the long-term, there will be a fully digitalised and connected value chain with global deployment of i4.0.” - Lyan Law, Lead Consultant, Industry 4.0, Smart Manufacturing & Materials Division, Hong Kong Productivity Council

Industry 4.0 is big news. The trend of automation and data exchange in manufacturing technologies includes cloud computing, the Internet of Things, cyber-physical systems, and cognitive computing.

The subject of Industry 4.0 is on the agenda at this year's Hong Kong Cloud Expo show. Lyan Law, Lead Consultant, Industry 4.0, HKPC (Hong Kong Productivity Council), and Benny Drescher, Head of Invention Centre, Fraunhofer IPT Invention, will present a talk on 'Making Industry 4.0 Happen'.

“The fourth industrial revolution – Industry 4.0 was initiated in Germany in 2011,” explains Lyan. “This brought upon different country policies, such as, ‘Made-In-China 2025’ in the Mainland, and ‘Re-industrialisation’ in Hong Kong, etc.”

Lyan and Benny will cover a number of aspects such as the German & Hong Kong perspectives on the development of Industry 4.0; how HKPC supports local Industry in the pursuit of Industry 4.0; and case-sharing on Industry 4.0 deployment in Hong Kong.

“The German industry has a strong base in automotive and mechanical manufacturing,” explains Benny Drescher. “More than one quarter of the Gross Domestic Product (GDP) is generated on the basis of the creation of physical products. With the increasing importance of information technology, the German government initiated Industry 4.0 in the year 2012.”

Benny says that Industry 4.0 is a game-changer for the entire industry and will mean an increase of productivity and efficiency on the one hand, and enable novel business and service models on the other hand. “The core of I4.0 is data-based decision making by information gathering in real-time along the value chain.”

For over three years Fraunhofer IPT and Hong Kong Productivity Council (HKPC) have been working closely on transferring i4.0 technologies and methodologies to the Hong Kong manufacturing industry. “We provide consulting services and assess the maturity level of company departments in i4.0,” explains Benny. “On the basis of our assessments, we help our clients to understand their current situation and, thus, identify potentials to migrate towards i4.0. Thereby, we follow a step by step approach to transform companies and help them to implement i4.0 pilot projects as well as roll-outs through all the departments of the enterprise.”

“Furthermore, we have established the Invention Centre in Hong Kong which is powered by Fraunhofer IPT and HKPC. The Invention Centre helps to create intelligent products for Industry 4.0 by facilitating a culture of innovation. We connect our members with experts from Fraunhofer IPT, RWTH Aachen Campus in Germany and HKPC, have regular conferences and support Hong Kong companies in the development of their products from a first idea to a working prototype. Here we support the OBM business of our members at the early front end of the product development. We consider Hong Kong as a place of innovation and technology and want to contribute to its reindustrialisation.”

In August 2017, HKPC set up 'Smart Industry One', which is the first demonstration centre in Hong Kong to showcase the core technologies and operations of industry 4.0. “It has built up a pool of certified trainers and experts to support local manufacturers to make the transition to the smart era,” says Lyan.

Meanwhile, March 2018 saw the launch of the HKPC 'Smart Industry One Consortium', which as Lyan explains, is: “a new cross industry platform to facilitate information and experience exchange on smart industry and help businesses to seize on new market opportunities.”

Despite the increasing importance of information technology for government, industry and education, Benny says that i4.0 in Germany focuses principally on the digitising of the manufacturing industry. “Thereby, the horizontal and vertical integration of software tools as well as the application of sensor technology by smart sensors are of major importance.”

“Additionally, the analysis of data by using Artificial Intelligence will form the foundation for a data-based decision making through the entire company. As all players in Germany are currently adapting their game and migrate towards i4.0, the industry is moving fast and in a highly dynamic way.”

Benny adds that the perspective of i4.0 in Germany is much broader and contemplates the value chain from end-to-end, with the focal point being the generation of value of the company. “Therefore, i4.0 can help to create novel and data-driven business and service models. It also helps to increase efficiency and productivity by the integration of sensor technology and data-driven competencies in the company. Thereby, the approach for a digital transformation very much depends on the level of i4.0 maturity and must be tailored towards the company’s strategy.”

A key advantage of Industry 4.0 is that it can create values for industry in a number of ways. Lyan says that this can be done by enhancing cost efficiency through connectivity, and can be done so in a number of ways.

“For example, it can improve real-time transparency and forecast accuracy throughout the value chain, from designing customised products, to manufacturing, delivering the products, and collecting after-sales feedbacks from consumers. It can also ensure effective connections among people, machines and systems, which create dynamic, automation, and optimisation, within and across the company.”

Lyan adds that another is example is promoting innovation through smart manufacturing: “For instance, from mass and agile production, to profitable personalisation and flexibility and all-round data connection throughout the value chain to enhance the speed to market.”

In order to take a stepwise and holistic approach of migrating toward i4.0, HKPC & Fraunhofer IPT jointly developed a i4.0 maturity model and recognition programme for local industries.

The programme includes a number of aspects, such as the i4.0 Key Facilitator Training Programme, which Lyan says offers training modules with comprehensive knowledge transfer of i4.0 concepts, deployment methodology, technologies, and business cases. Another element is the i4.0 Maturity Assessment, which, as Lyan explains, “defines for an enterprise its potential upgrade areas, and formulates strategic upgrade roadmaps and digital transformation strategies for the next two to five years.”

The i4.0 Pilot Project Identification and Deployment element of the programme “identifies a list of pilot projects with detailed consideration of both tangible and intangible costs and benefits”. Meanwhile, the i4.0 Advisory Service “guides enterprises to upgrade and transform into smart enterprises (with smart operation, logistics, production and product) step-by-step, with the applications of i4.0 enabling technologies.” Finally, there is the i4.0 Smart Operation, Manufacturing & Factory Recognition, which jointly provides recognition scheme with Fraunhofer IPT to recognise enterprises for the achievement of i4.0 maturity on different perspectives.

Looking ahead, Lyan says that there a number of different things to consider with respect to Industry 4.0, both in the short-term and the long-term futures.

“In the short-term, overseas buyers / clients make i4.0 as basic procurement requirement, which defines the ‘adopt or die’ situation for OEM manufacturers,” says Lyan. “Solution providers, which offer i4.0 enabling technology like IoT and data analytics, will become industry partners to assist enterprise in realising digital transformation. Also, more digital players will enter the traditional markets for automotive, healthcare, and smart home.”

“In the long-term, there will be a fully digitalised and connected value chain with global deployment of i4.0. In addition, Smart products and services will become part of daily life, while Smart City and Smart Industry will become global concerns.”

Benny Drescher says that the major challenge for i4.0 lies in fostering a positive mind-set for new technologies. “The biggest impediment is people’s fear of technologies and what they eventually reveal about the company’s processes. It is important to implement an acceptance of truth, even though a bitter/hard one. The company must become an innovation culture in which transparency is supported and an open mind towards new ideas and processes is valued. Therefore, i4.0 must be considered holistically and include for all stakeholders in a company.”

Apart from the human factor, i4.0 always must be a value creator for companies. “This can be by growing revenues, enabling new business opportunities or by increasing efficiency/productivity,” says Benny. “Despite various technical solutions such as in data acquisition, predictive maintenance or augmented reality, key decision-makers must look beyond the fanciness and novelty of the technologies. It is imperative to analyse and, at best quantify, if and how it truly can create business value for the specific company and their set of challenges in the market.”

“Thus, our i4.0 projects have a highly individual approach and focus particularly on the needs of our clients.”

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