Triggering an Industrie 4.0 Revolution

At the Fraunhofer facility in Dortmund, scientists and researchers are beavering away on technologies that could revolutionize Germany's manufacturing industry. One example is a self-driving factory vehicle, able to prioritize its own work orders as it moves boxes around the shop floor.

Through its Industrie 4.0 initiative, Germany is trying to foment such a revolution. But it faces some big hurdles. For all the promise attached to the Internet of Things (IoT), Germany's Mittelstand -- the name given to its large sector of small and midsized enterprises -- remains wary of investing in digital technologies without more evidence of the exact business benefits.

"The problem is the technologies you need are still under development and you can't estimate costs in terms of price per piece while that is happening," says Jan Cirullies, one of Fraunhofer Institute 's Dortmund-based researchers. "It's definitely a challenge to find acceptance in the industry."

As discussed in our special report on the Industrie 4.0 initiative, analysts make some bold claims about the cost-saving benefits that will come from investing in digital technologies. But they also acknowledge there is still a shortage of compelling examples that would persuade more SMEs to take the plunge. Early adopters, though, fear losing a competitive advantage if they share details of their experiences. It's the Catch 22 of Industrie 4.0. (See Industrie 4.0: Rebooting Germany.)

But it's not the only challenge, says Cirullies. "One issue is about the qualifications of staff within SMEs and another is regarding data security and sovereignty," he elaborates. "Mittelstand players are very innovative -- we call them 'hidden champions' -- and if the data on products or companies is lost then the whole base for the business is gone, which makes them very anxious."

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As one of the world's biggest research organizations, with about 25,000 employees spread across 60 German facilities, Fraunhofer is working to address some of these concerns. One project involving Cirullies is aimed at developing an architectural model for the secure exchange of data across different industry sectors. Another, known as RAMI 4.0 (for Reference Architectural Model Industrie 4.0), is about establishing a framework for Industrie 4.0 services throughout the various parts of a given vertical sector.

"It's so there is a common understanding of what kind of layers there are, how data can be aggregated and how it all works together," says Cirullies.

What's important, from Fraunhofer's perspective, is ensuring its efforts are aligned with those of other national and international groups working on IoT platforms. Fraunhofer regularly participates in meetings coordinated by the German government and including other Industrie 4.0 stakeholders. But it is also in close contact with organizations outside Germany that have similar objectives, such as Belgium's Big Data Value Association, which is also working on data security initiatives. "We have a work package to harmonize and integrate our activities," says Cirullies. "Otherwise there is no chance this will be a success."

That could be devastating. For all their capabilities, Germany's manufacturers are under threat from players in North America and Asia that are eager to embrace Internet-era technologies. "If you don't digitalize you will lose contact with the end customer and your power in the business," says Cirullies. "Industrie 4.0 will be very important for the future of the German economy."

— Iain Morris, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, News Editor, Light Reading

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