How Leading Manufacturers Overcome Smart Factory Implementation Challenges

Smart factory

Three case studies from Industry 4.0 pioneers in Germany

The rapid development of sophisticated Industrial IoT (IIot) applications means a fully digitised manufacturing facility is now an achievable reality.

Such a smart factory is on one hand side enabled by advanced connectivity technologies, which allow organisations to bridge previously unconnected silos of data to generate a unified (virtual) data lake. On the other hand, advanced data analytics, both via established optimisation algorithms and via novel machine learning approaches, allow for turning this data from visibility over diagnostics into predictions and prescriptions.

The result is the rise of a "Factory of the Future": a cloud-connected, flexible, and autonomous AI-driven operations environment. Embedded digitised systems also facilitate continuous customer input into new product development, via real-time manufacturing analysis. This collaborative approach to innovation means that enhanced customer-centricity becomes a cornerstone of a company’s philosophy.

This latest industrial revolution presents opportunities across several industry sectors. Hence, understanding the underlying intelligent engineering practice and how smart data-driven decision making works, is essential for any leader in organisations who want to out-perform competitors and become an industry leader.

Complete transformation to an IIoT operation, however, is naturally a complicated process, and as manufacturers strive to incorporate advanced strategies into traditional manufacturing platforms, they are presented with a compelling set of challenges.

This article discusses the learnings of three very different leaders from Germany in Industry 4.0 and the Smart Factory: Wittenstein, a mechatronic component manufacturer, SMS Group, a provider of infrastructure and plants for metal processing, and Evonik Industries, a global speciality chemistry leader. While operating in different markets and with different budgets, they share a number of common ground when benefitting from smart manufacturing.

Customer-centricity demands operator (worker) centricity

One challenge addresses the need for real-time insight along the entire value chain. This also includes insights into customer orders. Here, the growing individualisation of demand and, accordingly, decreasing batch sizes of orders lead to an increase in complexity. Handling such an environment is one of the most significant opportunities for a digitally connected manufacturing environment.

Consider, for example, the example of German component manufacturer WITTENSTEIN SE. The company develops customer-specific products, systems and solutions for highly dynamic motion, precise positioning and intelligent networking in mechatronic drive technology.

To cope with the high variety of orders and customisation, Wittenstein implemented a worker's guidance system at its line to turn operators into "smart operators", supporting them on the line with customised assembly instructions to increase process reliability. With this system, order and process-related data about each workpiece are available directly at the workplace. Via a touch screen, an employee receives information on necessary materials, process descriptions and additional optical information to facilitate assembly (e.g. pick by light).

To take full advantage of the opportunities industry 4.0 offers, Wittenstein established an organisational unit in 2016 – its Digitalization Center. A team of sensor, electronics, software, data and cloud specialists is driving digitisation forward. Wittenstein aims to increase efficiency in the fields of both digital offerings for their customers and the transformation of their internal value creation.

Internally, Wittenstein promotes an agile corporate culture. In all activities, people are at the centre of their thinking. Employees are shown the opportunities offered by digital transformation, they receive further training, and are offered orientation during the course of transformation.

Another focus is the expansion of its partner network (e.g. with research institutes, associations and universities). Wittenstein cooperates with VDMA, ZVEI, the German national Platform Industry 4.0, or the Fraunhofer Institute. They also build on partnerships with key customers as an essential element to shape a digital future. These partnerships allow Wittenstein to benchmark their digital practices continuously, but also to lead cross-industry initiatives on IIoT connectivity and data exchange.

Employees first: Using digitalisation to connect and empower operators

Evonik Industries AG is a large provider of specialty chemicals, with 80% of its sales in areas in which it has a leading market position. The internal unit "Evonik Technology & Infrastructure GmbH" (T&I) set the course for Industry 4.0 at Evonik approach with a global digitisation strategy. A dedicated focus also here is on the empowerment of the operator and worker.

Novel technologies are tested at Evonik's own digitalisation pilot facility “DIGIkum” in a safe environment. In addition, employees are trained and educated in new technologies.

Evonik's #HumanWork initiative aims to establish new working methods and promotes active digital passion. Hence, the digitalisation group always focuses on the question of how employees can be integrated and benefit from digitisation. Employees have the opportunity to continue their education and develop themselves further and to expand their network with internal social networks, for example, without much effort.

Upskilling teams

Agile operations and design thinking to capture real-time data insights

Or consider SMS group, a leading company in the world of metals. As a family-owned business headquartered in Germany, quality and innovation are of high priority. Fast and flexible, the SMS group develops modular process solutions in the field of metallurgy, casting, or hot rolling, among others.

To continuously optimise its operations, SMS created an "augmented operations" solution, basically a digital twin of a high-bay storage to control, monitor, and optimise their operations. Utilising a full 3D map of the warehouse including transport systems and finishing facilities, an operator can observe all warehouse activities and release signals along transport operations via "drag and drop" in the digital twin. The digital twin also allows for forecasting in order to project processes and optimise operations in the future.

Again, technology is only one part of the game. Like Wittenstein,  SMS also invested in a supporting digital organisation enabling the design of these applications, but also its implementation and adoption by the operators.

At SMS, a spin-off company, SMS digital GmbH, takes up the challenges of digitisation and Industry 4.0 for the entire SMS group. Using state-of-the-art innovation methods, know-how of metallurgical processes, and technological expertise, the objective is not to digitalise anything and everything, but follow up on what will provide added value. For this, SMS digital often relies on Design Thinking to push industry 4.0 ideas into concrete user-centric applications.

Here, they follow thy typical five-step process of design thinking: empathise with the user, define the problem statement, ideate a solution, prototype a concept, and test it with potential users to ensure they stay close to the needs of internal and external customers. Each IIoT project starts with a broad interview stage to identify pain points of users – also making them part of the game. Such a human-centric design approach is crucial for successful realisation of the Smart Factory vision.

Smart factory vision

Digital Security for the Factory of the Future

The interconnected nature of a digitalised plant brings inevitable cybersecurity implications. Cloud-connectivity across numerous third parties naturally increases the openness of access, with inherent security complications which could allow cybercriminals to infiltrate the manufacturing system.

A completely revised approach to security is therefore required. In a Smart Factory environment, a particular concern is toward all operational technology (OT). Whereas before Industry 4.0 the primary role of OT was plant operation and functionality, nowadays improved access control and network security are paramount features when buying new equipment to prevent disruption of the manufacturing process.

These prospective new threats call for companies to adopt a fully integrated security strategy to counter increasingly sophisticated cyber-attacks, which are capable of compromising all aspects of a vulnerable operation.

A particularly weak point is created by the increased interface between OT and IT departments. This greatly raises exposure to malware attacks, so to prevent these, industrial enterprises must ensure flawless component compatibility between the two.

To this end, SMS Group has established fully encrypted TLS/SSL connections to secure industrial app/platform communication. Such a modern multi-cloud infrastructures mean that encryption of data storage and transfer is also essential to prevent security breaches. Third party access control for partners or suppliers is increasingly achieved by the use of encrypted access tokens, and these are becoming recognised as a secure method of authentication.

Security for the Smart Factory often is not a core competency for many organisations. Hence, partnering and networking again is a viable strategy to stay alert and informed. In the end, security is a base factor, i.e. nothing to gain competitive advantage or to create excitement for your customers – but essential to just stay in business.

Both SMS Group and Wittenstein are part of industry networks and associations providing advice and development on plant security. Together with a dozen other partners, they also participated in a consortia study of RWTH Aachen University, comparing and benchmarking the field of advanced IIoT security.

This research study, however, also revealed another key success factor: Developing and deploying a unified strategy between previously independent departments and divisions of each individual company: Prevention for external threads starts, first of all, inside!

In our Masterclass "Leading the Factory of the Future", senior decision makers from industry learn and I discuss how to transition to a smart factory. Experience exclusive factory tours at Porsche, Siemens, Bayer, or Schneider Electric to benchmark your own experiences with smart manufacturing visions and practices.

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