How industry 4.0 could 're-shore' manufacturing closer to home

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An automated, robotic warehouse. Image credit: Ocado

Speaking at Huawei Eco-Connect in Berlin this week, Professor Dr Detlef Zühlke says that demand for mass customisation will lead to the shortening of the logistics chain

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The increasing demand for individually customised products will lead to customised mass production, and this could be set to fundamentally alter the way manufacturing, markets and economies operate in the years to come.

That's according to the director of Germany’s oldest smart industry institute, Dr Detlef Zühlke. Speaking at Huawei Eco-Connect in Berlin today, the director said that markets catering to customised services will shift economies and manufacturing back along more localised lines again.

Think, for example, of the Adidas 'speedfactories' in rural Germany, where it is robotics that put the finishing touches to your running shoes.

Industry 4.0 is often used as short-hand for the next stage in industrial production – following along the lines of the first industrial revolution – and bringing with it advances in automation, AI, smart factories, cities and applications.

According to Zühlke, the term was invented almost accidentally – as Chancellor Merkel in the 2000s tabled a conference to address something called Cyberphysical Systems for Production. Simplified, someone called it industry 4.0 and that stuck.

In 2004 the idea for a nonprofit organisation where industry 4.0 products could be trialled was floated, and in 2005 SmartFactory KL was built, and this is where Dr Zühlke is director today. It has 50 partners as of today, and these range from smaller companies to large enterprises such as Cisco.

The conventional mindset for manufacturing has been that cheaper is better. But an increasing demand for customised products ordered and expected to be delivered within hours or days, means production will have to shift more locally to support that.

"In a sense we will re-shore production more and more," said Zühlke. "The future is in more mass customisation and this means more local production – because we have to shorten the logistics chain from the production side to the side of the user."

How this looks in practice is unlikely to be clear for some time, but it could mean, he said, placing the production much closer to the customer in a number of regional markets, perhaps divided by continent, with production sites based in each.

"This will lead to a new world economic structure," he said. "All countries around the world have recognised this and are preparing for this change, especially China."

This will create new business requirements: factories today, Zühlke said, have a "rigid structure".

This will have to change to a more modular approach, effectively like Lego bricks – so that businesses running smart factories will be able to plug and play various components.

"We need more agile factories," he said. "The smallest building blocks of our factories will be modules."

That will translate to individual building blocks in smart factories to be fitted with their own micro-servers, running their own IP addresses, and as with the internet of things, not only will they be connected to the internet, they will be a part of the internet.

And for these various components to run effectively, the underlying infrastructure will also have to be up to par in a way that will be enabled by new standards, for example in the move from ethernet to ethernet TSN, and the shift from 4G to 5G.

Back when the smart factory started in 2005, the industry was requesting more progress in wireless technologies – Wi-Fi, Bluetooth and so on. But it became clear that these wireless technologies weren’t suited for heavy industrial use, especially as they were operating on public radio bands.

However, 5G, should enable real-time connectivity in technology like microcells with latency of just 1 millisecond. The emergence of 5G technology will see a completely different approach than the way 4G has played out, because it will allow for the creation of not only public networks for mobile, but also secure bands for industry, and subnets sitting beneath these for organisations to call their own.

Unfortunately, Zühlke said, it will be a number of years before these technologies are up and running for industry.

But in the meantime, organisations can prepare by trialling the use of smart devices – and by making an extra effort to safeguard data, train and upskill staff, track assets by RFID chip or similar technologies, and experiment with creating systems of their own.

Because far from being a distant idea, the wheels are already in motion to make truly smart, connected manufacturing a reality.