Top Industry 4.0 Initiatives Around The world You Must Know
Industry 4.0 initatives: for many, it’s an inescapable buzzword, a nexus of hype and business opportunity. Others see it as an industry 4.0 initiatives, a technological call to action.
Sceptics may see Industry 4.0 as an umbrella term for a growing number of business and political challenges. While futurists may only see the boundless potential that this new era offers.
“In the industrial revolution Britain led the world in advances that enabled mass production: trade exchanges, transportation, factory technology and new skills needed for the new industrialised world.”-Lucy Powell
Industry 4.0 Initiatives Background
Although the content of Industry 4.0 initiatives varies quite a bit, it tends to answer several basic questions, which we present here:
What’s the Hurry to Industry 4.0?
Countries throughout the world recognise Industry 4.0 technologies as potentially disruptive forces that can produce business profit or pain. Many nations identify them as time-sensitive drivers of economic growth and technology development. The business opportunities that Industry 4.0 technologies enable are unmistakable. Unfortunately, the window of opportunity that manufacturers can use to compete more effectively is short.
Think of Industry 4.0 adoption as a steeplechase. Manufacturers who are quick to start and nimble over the obstacles will gain a competitive advantage over their rivals. That means assembling the political will, resources, and persistence needed to prevail over legacy technology, practices, and thinking. Finally, national leaders must make these daunting decisions at the high speed of 21st Century technological development.
The Common Thread
What these national frameworks have in common – with each other and ASEAN initiatives – is a focus on investment in people, education, research, and technology. The goal: to develop and take advantage of digitised manufacturing equipment, solutions, and processes to make manufacturing more efficient and workers more productive.
The importance of embedded devices and intelligent non-human process control in national plans is often manifested in high-profile “smart” initiatives. These would include as smart factories or productions, designed to drive operational efficiencies and ultimately stimulate economic growth.
In this chapter, we review the national initiatives of ASEAN member states with major manufacturing operations. We also describe approaches from several established manufacturing heavyweights around the world.
What is an Industry 4.0 Initiative?
National Industry 4.0 initiatives are plans or policy documents that describe each country’s vision of the opportunity and challenges that these disruptive technologies present to manufacturers. Governments distribute these plans as one or several documents. Industry 4.0, however, means different things to different stakeholders.
To governments — Industry 4.0 initiatives represent important priorities and development goals to help identify changes in policies, incentives, and ideal standard practices.
To private sector companies — initiatives identify new opportunities brought forth by the real-time access to the intelligence, and point to incentives and sources of investment to transform the way they conduct the business.
To Academic institutions — initiatives help identify which technologies or resources need to be strengthened to support innovation during or initial research or advanced R&D phases. Educators can use national development plans to determine which types of training and education to develop or offer to non-university students.
To the individual — Established or newly graduated engineering professionals can use initiatives to identify likely trends in manufacturing tech development, education, and employment. Initiatives are a great place to start looking for indicators of current and future needs for manufacturing professionals and technical specialists.
Why Bother Creating an Industry 4.0 Initiative?
Industry 4.0 plans are public statements, which ideally identify and summarise all the critical points that stakeholders need to implement a program successfully. That means describing and putting stakeholders’ seal of approval on:
- High-level vision that shapes the overall plan — The nation’s overriding outlook about manufacturing technology and its role in transforming the economy, for example.
- What’s most important to those stakeholders — Initiatives set goals and prioritises the industry’s future approaches to achieving them.
- Methods used to achieve goals — Clearly defined goals help all stakeholders envision the future but presenting the methodology helps guide them through the entire process.
- Fair representation — Any good initiative should assign roles to government, business, and academic stakeholders.
These are fine as general principles go, but which political, economic, and technological trends drive countries to adopt and implement Industry 4.0 tech and ideas?
Drivers of Industry 4.0 Strategy
There are plenty of reasons to adopt Industry 4.0 technology and processes. At the more idealistic side of the motivation spectrum, it can be the desire to move nation’s manufacturing effort up the value chain by adopting the advanced technologies in order to increase productivity and competitive edge, as well as upgrade the skillsets of workforce. That approach involves trading assembly line production for a role as a provider of automated and highly customised products and associated customer services.
The promise of reviving stagnant manufacturing performance is also a worthy goal. Efficiency-inducing Industry 4.0 technologies are just the ticket that legacy manufacturers need to become more competitive.
How Do We Know It works?
You might wonder how to know whether anything meaningful will result from the hype and noise of Industry 4.0 marketing. The answer is simple. We’ll know when nations and businesses get tangible indicators of value. That means value measured as higher revenue and lower costs of manufacturing operations; greater worker productivity; and more resilience to changes in the global manufacturing marketplace.
These crucial overriding elements influence the direction of the initiatives but significant insight can also be gained from a deep dive into specific initiatives from ASEAN member nations and beyond.
National Industry 4.0 Initiatives
Industry 4.0 is the data- and technology-intensive transformation of manufacturing and other related industries. These changes are set in business and technical environments that link data, people, machines, processes, services, and IIoT-connected devices.
The history and current status of Industry 4.0 efforts in countries within and beyond Southeast Asia show their concerns and priorities about current and future manufacturing development. We begin our analysis at the birthplace of “Industrie 4.0”, Germany.
Germany Industrie 4.0 Initiatives
Before there was Industrie 4.0, there was “Industrie führ punct null” or “Industry Leader point zero”.
The Industrie 4.0 idea began in 2006, even though the name didn’t exist yet, and digitisation was a long, long way from public consciousness. Industrie 4.0 is the name given to a German strategic initiative introduced in 2011. Industrie 4.0 was developed by the BMBF (Ministry of Education and Research) in Germany to create a coherent policy framework that would maintain the nation’s industrial competitiveness. The strategy emphasised strong product customisation enabled by intelligent, highly flexible mass production.
Industrie 4.0 embraced these six design principles, which later played essential roles in Industry 4.0 thinking:
- Interconnection — Devices, machines, sensors, and humans communicate and connect via the Internet of Things (IoT).
- Information transparency — Vast amounts of useful information that help manufacturers make more accurate and timely business decisions.
- Inter-connectivity — The ability of operators to connect devices, machines, IT networks, and people is the basis of smart manufacturing. These connections enable the collection and transfer of immense amounts of data from all points in the expanded Industry 4.0 manufacturing process.
- Technical assistance — Industrie 4.0 recognises two types of assistance systems. First, assistance systems, which support humans by visualising and gathering information taken throughout the manufacturing process. Manufacturers and partners throughout the value chain use this information to make informed decisions and solve urgent problems, even at short notice.
Also, cyber-physical systems conduct a wide range of support tasks, the jobs that are too exhausting, unpleasant, or unsafe for humans to complete themselves.
- Decentralised decision making — This occurs when cyber-physical systems make decisions and perform tasks with little or no human attention. Ideally, tasks are only delegated to humans in cases of interferences or conflicting goals.
- Sustainability — Industrie 4.0 envisions environmentally sustainable manufacturing, which uses green manufacturing processes, supply chain management methods, and products.
Smart factories, another important Industrie 4.0 idea, are where the six design ideas come into play. It’s where data, network connectivity, and cyber-physical systems interact in processes that occur throughout manufacturing supply and value chains.
These ideas and German leadership in the global Industry 4.0 development effort have merged into global Industry 4.0 events and practices. German businesses participate in Open Industry 4.0 Alliance meetings at the Hannover Messe trade fair.
Now more than ever, Industrie 4.0 events and publications describe tech-wonk implementation topics. AI as the driving force of autonomous systems, movement to the mittelstand (SMEs), and intelligent support of end-to-end manufacturing processes are standard bills of fare.
China: The Made in China 2025 Plan
Awash in a sea of international high drama, China’s Made in China 2025 initiative stimulates a range of emotions. At first, Chinese manufacturers and government officials were filled with pride and promoted the plan vigorously. Some of the country’s economists tried to inject a more measured response with less ambitious goals. Overseas, industrial rivals, chiefly in the United States, were sure that the Chinese were aiming for world domination in manufacturing. Beijing insists that it is just a guide meant only to steer Chinese development into the future.
The Made in China 2025 plan was drawn up by more than 150 Chinese scientists and scholars in 2014. The Ministry of Industry and Information Technology (MIIT) and 20 other cabinet-level agencies supervised its creation. In 2015, vice-premier Ma Kai led a group that coordinated the planning and implementation of MIC2025 policies nationwide. A technology roadmap published a few months later provided more specific targets for industries mentioned in the plan.
The launch of MIC2025 has been driven by the nation’s concern on both its weakness in core manufacturing capabilities and ambition to catch up with the leading players in international arena — Like many manufacturing rivals , China worries about the middle-income trap, although at a different scale and higher up the value chain as the 2nd largest economy of the world. Chinese manufacturers and government officials worry about continued reliance on foreign technology in its supply chains and there’s a growing sense of national pride in domestic technology companies.
Largely state-driven, the MIC2025 plan wants to move the country’s role away from being the world’s assembly line. The plan’s goals include moving Chinese industries up the value chain by replacing imported components and technologies with locally manufactured products. The initiative also aims to develop world-class technology champions, who can take on the Western tech giants in cutting-edge technologies.
Clearly defined targets and a long-term outlook — The original idea behind MIC2025 was simply to catch up with other countries. Somehow the plan’s objectives became caught up in recent Chinese nationalism. Now, the desire to be a technology superpower is deeply bound up in “Dream of China.”
In detail, the plan aims to end China’s reliance on foreign technology and raise local high-tech industries up to Western standards. The plan documents the first of three 10-year periods of digital industrialisation:
• Phase 1: 2015—-2025 (becomes a strong manufacturing country)
• Phase 2: 2025—2035 (able to compete with developed manufacturing powers)
• Phase 3: 2035—2045 (transformation into a leading manufacturing power)
In the Chinese government’s official view, the plan is a market-led effort, guided by the national government. Details of the initiative present a significant leapfrogging from previous economic models.
The MIC2025 plan provides specific targets for 2025. These include:
• 70 per cent local market share of total domestic technology suppliers.
• Lower manufacturing operations costs
• Shorten development cycles for Chinese manufactured goods
• Product defect rates reduced by 50 per cent
• Establish 40 national (and additional regional) innovation centres.
What’s the point of all the time, treasure, and national prestige put behind the China 2025 program?
Targets and priorities — To be sure, the state’s involvement in industrial technology development has grown in the past decade. Like earlier Chinese development plans, MIC2025 lays out specific growth and market share targets. In some cases, these goals include 95 per cent domestic market shares for particular industries.
The plan also includes these rather general high-priority tasks to promote breakthroughs in 10 key areas:
- Improve manufacturing innovation
- Integrate technology and industry
- Strengthen the industrial base
- Promote Chinese brands
- Enforce green manufacturing
- Restructure the manufacturing sector
- Promote service-oriented manufacturing and manufacturing-related service industries
- Internationalise manufacturing
- Develop the resources needed for broad Industry 4.0 adoption
- Address gaps in China’s scattered value chain
Building the necessary research community — Experts suggest a lack of theoretical scientific knowledge, a skills deficit in some areas, and insufficient patience and perseverance to see projects through in others.
“Although China has stressed the importance of fundamental research in becoming a manufacturing superpower… the proportion of around 5 per cent of overall research and development expenditure since Made in China 2025 was introduced is still small. It’s only a quarter to a third of those in developed economies such as the US,” points out Liu Yadong, editor-in-chief of Science and Technology Daily.
Developing a vigorous, collaborative R&D environment — China’s poor IP protection undermines healthy R&D competition. Successful R&D requires more open collaboration than in the past, and cross-company collaboration is still limited. When collaboration does occur, it is mandated or encouraged by the government. This peer-to-peer distrust creates problems for future development because current industrial innovations tend to cross traditional boundaries of expertise.
Establishing the right roles between the private and public sectors — China’s government has achieved remarkable economic growth with a tightly disciplined management style that’s typical of a top-ranked enterprise. To reach the next stage of economic development, however, China’s private sector will need to play a much stronger part.
Next, we review the Industry 4.0 initiatives of another nation, known for its powerful and independent private sector—the United States.
United States: Industrial Internet Initiatives
In the coming decades, businesses will establish global networks of machinery, warehouse systems, and production facilities by connecting physical, computer-controlled, and intelligent cyber-systems.
In the manufacturing environment, these cyber-physical systems will include smart machines, storage systems, and production facilities. These networks will exchange information, trigger actions, and control each other with varying levels of independence.
The U.S. name for a group of disruptive and possibly transformative technologies is the Industrial Internet, more recently known as the Industrial Internet of Things (IIoT).
A bit of Industry 4.0 history — The U.S. Industry 4.0 initiative supports fundamental improvements in manufacturing, engineering, materials purchasing, and supply chain management. The initiative is the product of several programs:
The Advanced Manufacturing Partnership (2011) was a national effort that brought together representatives from industry, universities, and the federal government. Its goal was to identify challenges and opportunities to transform the technologies, products, and processes across several manufacturing industries.
- Launched in April 2014, the Advanced Manufacturing Partnership (AMP) 2.0 is a national effort appointed by President Obama to secure U.S. leadership in emerging technologies. It aims to create high-quality manufacturing jobs and enhance America’s global competitiveness.
- Ensuring Leadership in Advanced Manufacturing (2011) called for a partnership between government, businesses, and educators. The plan identified the most pressing manufacturing challenges and business opportunities.
- Capturing Domestic Competitive Advantage in Advanced Manufacturing (2012) described the policy opportunities and requirements of the United States as viewed from economic and national security perspectives.
- The National Strategic Plan for Advanced Manufacturing (2018) documents opportunities for federal policy to accelerate the development of advanced technologies in manufacturing.
Each of these programs focused on developing stronger ties between expertise, innovation, and a strong economy.
Innovation, talent, and a healthy business climate — Objectives and recommendations related to Industrial Internet proposals have been scattered throughout many documents. However, the central ideas about what needs to be done to transform U.S. manufacturing are collected as recommendations in Capturing Domestic Competitive Advantage in Advanced Manufacturing – a report released through the Advanced Manufacturing Partnership Steering Committee.
When rendered down to the essentials, the recommendations focus on three basic goals: making innovation faster and less expensive, developing a future U.S. manufacturing workforce, and improving the manufacturing business climate.
Accelerating innovation — The first pillar highlights the need to facilitate R&D to take ideas from the drawing board, lab, or testbed, to saleable products and services. These recommendations directly address the hypercompetitive nature of manufacturing. To be competitive, companies must get new products to the market more quickly than before by:
- Establishing a national advanced manufacturing strategy — This includes setting up a systematic process that identifies and prioritises cross-cutting technologies.
- Increase R&D funding in top cross-cutting technologies — Establish a starter list of cross-cutting technologies that are vital to advanced manufacturing. Also, use the proposed Advanced Manufacturing Partnership process to evaluate technologies for R&D funding.
- Establishing a national network of manufacturing innovation institutes — Set up public-private partnerships to foster regional networks of advanced manufacturing collaborators.
- Encouraging industry-university collaboration in advanced manufacturing research — Consider changing the treatment of tax-free, bond-funded university facilities. Use these collaborations to support stronger relationships between universities and manufacturing companies.
- Fostering a stronger environment for commercialising advanced manufacturing technologies — Encourage manufacturers to participate in university innovation networks to get access to capital from startup to scaleup.
- Establishing a national advanced manufacturing portal — Create a searchable database of manufacturing resources to provide small- and medium-sized enterprises (SMEs) with a support infrastructure.
Securing the talent pipeline — This pillar focuses on developing current and next-generation members of the manufacturing workforce. Rapid scale-up of new ideas into production requires a well-trained, innovative, and flexible workforce. The training process involves the next-generation workforce and continuous training of current workers. Action items designed for this task include:
- Correcting public misconceptions about manufacturing — Engage in an advertising campaign to generate excitement and interest in manufacturing careers.
- Tapping the talent pool of returning veterans — Returning veterans possess many of the skills needed to fill gaps in the manufacturing talent pipeline. Connect these veterans with manufacturing employment opportunities.
- Investing in education — A community college education can reduce the skills gap in manufacturing. Follow the best practices of leading innovators to increase investment in this sector.
- Providing skills certifications and accreditation — Develop partnerships to establish stackable credentials.
- Improving advanced, university-level manufacturing programs — Universities should focus on advanced manufacturing by developing educational modules and course for future professionals.
- Launching national manufacturing fellowships and internships — Improve workforce skills and recognise manufacturing career opportunities by creating national fellowships and internships in advanced manufacturing.
- Improving the business climate — This pillar addresses manufacturing-related tax reform streamlined regulatory policies and improved trade policies. Suggestions include:
- Streamline regulatory policy — Set up a framework of smarter regulations related to advanced manufacturing.
- Improve trade policy — Change trade policies that negatively effect on advanced manufacturing firms.
- Update energy policy — To reduce operations costs and improve manufacturer competitiveness, establish energy policies more favourable to manufacturing companies.
This detailed list identifies the resources and priorities that U.S. stakeholders need to move forward with Industrial Internet proposals. So, how are government, business, and educational stakeholders doing?
Likely challenges to digital transformation — In the United States, the risk profile of IIoT adoption are somewhat different than those of ASEAN member countries. Government-supported research and inter-business collaboration are established parts of technology development. However, there are still resource gaps and obstacles in the United States that will slow the digital transformation process.
General readiness — The biggest challenge of American manufacturers adopting Industry 4.0 technology and processes? Most businesses are not ready. In an Accenture survey of more than 1,400 business leaders, only 36 per cent of respondents claim they fully grasp the implications of the IIoT. While, only seven per cent of companies have developed comprehensive strategies and investments.
A limited view of benefits — As in other countries in and beyond ASEAN, U.S. manufacturers recognise the short-term benefits of Industry 4.0 — more efficient production and more productive employees. The value of Industry 4.0 as an enabler of new and lucrative business models, however, seldom comes up on executives’ radar.
Lack of interoperability among existing systems — Integrating manufacturing systems with the internet adds a layer of complexity, which is likely to increase the time and costs of Industrial Internet deployments.
Business risks — Another notable barrier is the uncertain ROI on immature or untested technologies.
Finally, we return to Asia review Japan’s take on digital transformation. Its broader scope makes it unique among major manufacturing nations.
Japan Society 5.0 (Japan’s term for Industry 4.0 Initative)
Japan’s approach to Industry 4.0 adoption reflects the nation’s unique set of challenges and concerns about digital technology changing its businesses and society.
A broader scope is the hallmark of Japan’s digital technology adoption plan. Other nations limit the focus of their Industry 4.0 strategy to the digital transformation of manufacturing. Faced with worrisome social challenges, however, Japan developed its Industry 4.0 adoption plan, which goes far beyond the digitisation of the economy. Rather than focusing on changes in technology (industrial revolutions), Japan expands its attention to the effects of digitalised technology on society.
Society 5.0: An expanded view of value — As the name implies, Industry 4.0 technologies and processes are mainly concerned with industrial production. The fuel in the Industry 4.0 engine is information—data exchanged between people, devices, and machines.
The Society 5.0 plan recognises that the availability of vast quantities of data and increasingly powerful analytics are leading to new ways of doing business. However, the plan’s authors recognise that changes in technology will also have an impact on social interactions. That’s why the plan addresses change in Japanese society.
In April 2016, the Japanese government enacted Society 5.0, the 5th Science and Technology Basic Plan. The plans sets out that today, human still create knowledge from information. In the proposed fifth stage of human society, intelligent machines guided by AI will do the same.
Society 5.0 drivers and objectives — Japanese officials are faced with an aging population and sluggish manufacturing growth. They recognise that digitised processes provide the opportunity to strengthen the national economy, reduce environmental problems, and address social issues.
The Society 5.0 Plan describes high-level capabilities that will enable Japanese citizens to stimulate the development of future industries and reinforce the “fundamentals” of the nation’s science, technology, and innovation.
New manufacturing capabilities — The Society 5.0 plan concerns itself with many areas but we’ll stay focused on manufacturing. Big data, the Industrial Internet of Things (IIoT), artificial intelligence (AI), and robotics will be incorporated at different levels of manufacturing facilities, machines, and production processes. Within the Society 5.0 framework, digitalised technologies will enable manufacturers to:
- Perform flexible production planning and inventory management in response to changing requirements.
- Make production more efficient by using AI and robots to enable inter-plant coordination and achieve high-mix, low-volume production.
- Make distribution more efficient by using processes such as cross-industry cooperative shipping and truck platooning.
- Provide consumers with highly customised goods with minimal delays in delivery.
Considering the capabilities, we should expect obstacles to digital manufacturing development.
Obstacles to adoption of digitalised technologies — Japan’s manufacturing infrastructure is unparalleled. The quality of its technically trained workforce and engineers is consistently excellent. However, maximising the value of Industry 4.0 technologies requires the knack for innovation. This, in turn, requires a technically trained workforce with critical thinking skills, which Japanese workers are said to have room to improve. Finally, there is a growing demand for Japanese business owners with entrepreneurial skills and instincts. Current challenges with the infrastructure for technical and business innovation are what Japan is tackling hard to gain the Industry 4.0 adoption.
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Written by Colin Koh, Senior Business Development Manager, Industry 4.0 Consultant. This Industry 4.0 Article Series is aimed to enlightened readers about everything they need to know about Industry 4.0 and its application about technologies and benefits to companies and consumers.
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