Industry 4.0 is directly due to the economic crisis caused by the 2008 financial crisis. At that time, Germany proposed that core industries such as engineering and manufacturing must make changes and become more efficient before they can survive the financial crisis. The discussion period lasted for three years, and began to land in 2011. In the past 7 years, Industry 4.0 has gone through three stages of development: flexible and customized production, enterprises have evolved from product platforms to service platforms; Internet of Things technology has made the Industrial Internet a reality.

In the next 7 years, the most important technological trends are digital twins, the virtual world and the physical world are completely connected, and the employees' capabilities and business models are completely reconstructed. However, no company can do this by itself, focus on the core, and create an ecosystem , Is a common practice of leading enterprises.

Industry 4.0 in the next seven years

There are many opportunities in the future. First, we are undergoing new technological changes, the most important of which is the digital twin. Products exist in the virtual digital world before the physical world actually exists. Once you have a digital twin, you can design the product virtually, simulate the market, configure the product to the customer's needs, and design product performance and experience. Everything can be done in the digital world without any operations in the physical world.

Second, we have to rethink the components of the product and rethink the issue of the product as a software platform. A mechanical device operated by software, you may not be sure what service it needs to provide after two years, and it is a real device that runs every day. If it is not controlled well, it may harm humans and be very dangerous. Therefore, we need to rethink how to verify these products, so that these products can update software and realize new functions. These products will introduce production processes that have not been tested at first, then the entire verification process will have to be reconsidered. This is what we have to reconsider the meaning of product components: to reconsider how products are designed and verified.

Many customers may no longer buy products, they want to buy the function of the product. For example, instead of buying a locomotive, it is transportation capacity, which is a completely different business model. If you provide high-quality and timely transportation, and have a good customer experience, you can get a premium, which becomes a service industry, unlike the manufacturing industry, after selling products to obtain profits through services. In addition, the sharing economy has also entered the B2B industry.

Third, Industry 4.0 has entered a new level, that is, the upgrade of automation, with the new jobs and the need for new work capabilities. Many human jobs are not needed, but we need workers to do different things, because the leaders of Industry 4.0 are creating new jobs. Some outsourced supply chains have been brought back to China, and higher production efficiency has catalyzed the restructuring of the manufacturing supply chain. For leaders, they bring the supply chain back to China, which also means that they need to retrain their employees to do some important new jobs, and the types of jobs are changing.

This is both an opportunity and a challenge for German industry, because in the past you might be a typical engineering company, now you have to become a software company; before you were a product sales company, now you have to become a service company, before you were a discrete In a manufacturing process management company that is responsible for daily operations, your employees must now be more flexible to meet customer customization needs in real time. These are huge transformation challenges, and we need to think about how to create a system to train hundreds of different companies to improve their performance.

This is very important for Germany. Prime Minister Merkel often invites business leaders to discuss these issues. At a meeting three months ago, she asked business leaders to discuss German manufacturing, artificial intelligence (AI), and how to use AI technology to promote national development.

In order to answer her question, we began to compare the situation of AI around the world. What Germany is good at and what the United States is good at. We think that the only thing in the world that can compete or cooperate with us is the United States and neighboring countries in Europe, China. The way China develops AI is amazing.

For Germany, we focus on manufacturing. We are very strong in B2B, but our B2C industry is not very strong. We will use artificial intelligence, machine learning, and robots to build the infrastructure to enable us to implement customized products and services. Artificial intelligence technology will play an important role in the manufacturing industry. We will invest a lot in this, including human-machine cooperation technologies in robots and voice recognition. The normal state of human-machine communication in the future is that you talk to machines, and the same is true in the workshop.

For the automotive industry, how many cars did you sell, what configuration, who did you sell it to, when did you sell it, plus how many electric cars were there, how many were sold to end users, how many were sold to retailers, and how many were shared cars? How much does a car cost in the sharing economy? Can parts be sold separately? Faced with such a simple problem, we can discover how uncertain the future is.

This issue is applicable to any company. If you are a company that manufactures medical equipment, do you sell machines, or sell diagnostic capabilities to patients? We already have companies doing this, and some German companies used to sell equipment. Now they have found a way to optimize the treatment plan of the equipment, so that the life expectancy of patients can be extended by five years. They no longer sell equipment. Is selling services. They sell a promise that some patients come to us to live at least five years longer.

These questions are questions that the industry does not need to answer in the past 50 years. There have been many automations in the past 50 years, but there has been no revolution. Now we are entering such a field, we must rethink how to combine products and services to sell to end users in the future.

Digital twin technology that changes everything

The next question is, can I do this on my own? Or to build an ecology to achieve? Because many engineering companies are not software companies, they do not yet know how to build software platforms for their products.

The next question is who do you compete with in the future? The German automotive industry did not see Tesla becoming their competitor a few years ago, and Airbus did not see the emergence of new space rockets in the defense business. So we have to keep asking these three questions: What products and services can we sell? What partners can help us achieve our goals? Who will we compete with? If we can have a good dialogue on these issues, we can get some new insights and conclusions.

We suggest that the German industry should prepare for the future, have smart products, have smart production, and sell products and services. You may not have service when you sell the product, but the product needs service after two years of use. Your product is a service platform. It will take many years. As a product manufacturer, can you participate in its value-added process? This is a new business model. It sounds simple, but it is very complicated to implement. This is what we are doing. We are collaborating with German companies in these three areas at the same time.

Our recommendation for a single company is to prepare your core business, the software platform, and prepare everything to be digital, which can bring transparency and shorten the cycle; make your core products personalized, thus Tightly tied to the customer; then to focus on the core business, you don't need to do everything, so focus on the core capabilities and strengthen the advantages.

Then we began to think about the upcoming digital revolution, which is the digital twin. We believe that the next trend in engineering and manufacturing companies is digital twins.

This is a new platform where you can market your products through digital twin digital channels, sell them digitally to customers, and provide digital manufacturing and services. There are already some pilot projects in this area. At present, the industry does not have an integrated solution, but it will appear in the next five years. We believe that the company will have a new platform around the "digital twin", it will control all the company's processes.

Once you have a digital twin, once you connect the company's operations with the digital twin, the business model will change. You will be able to develop new businesses and earn income around product service platforms.

Next is the technical foundation. What does a manufacturing and engineering company need to enter a new era? That's all: smart products, smart services, new value and new business models.

Every company needs to understand the "digital twin", how to operate the operating system of the software platform; there will be many new electronic devices, many sensors are needed, as well as hardware security technology, machine learning on edge devices, and consumer-human interaction , Such as voice and digital identity sensors, application programming interfaces (APIs) that collect data from products, and new manufacturing technologies such as 3D printing.

Regarding smart services, a platform is needed, an Internet of Things, blockchain, big data, and machine learning frameworks are needed, and a digital service factory is needed, because once a product is launched, it is a software platform, and a weekly digital service can be provided to customers. The factory, which can not be shut down, is also a new money-making tool. You also need a data space to trade this data, perhaps with competitors, because your competitors have the data you want, and you also have the data that your competitors want, and you need to build a market.

There must also be supervision, because if the devices implanted with AI are not properly controlled, it will be very complicated and dangerous for humans. Then we must consider how to construct dynamic verification of product behavior, because the software is constantly changing.

Then you have to consider the new business model and experience for the customer, as well as the convenience of the user in obtaining the product, how to charge for the service, and how to establish a new business model. At the same time, we are also considering whether the business digital twin can provide "business twins" for all manufactured products in addition to the "digital twins". Under this, you need to provide cloud-based services and provide solutions according to customer needs.

We are working hard in these areas, and no company can master all these links, but this is the future of Industry 4.0 in Germany, and many ideas will become reality in the next five years. There will be many challenges, and the management of the company will resist these changes, which is easy to understand, because they have to do unfamiliar and laborious things. There is also regulation, and the government can encourage these changes through regulation. We must also consider the company's organizational flexibility, not only to provide good product services and business models, but also to make money. You can't give up the core business, but also want to do new business, so how to adjust the company's organization? There are many challenges, but if done well, the benefits are obvious.