Industry 4.0: Why it Matters?

Everything is a revolution or revolutionary these days…this service, that business model, this product, even that toothbrush.

Whatever your feelings are towards “revolution”, we are in the midst of one – that is reinventing the way we do things, make things and operate all things and processes that result in a (better) consumer-existence. This is the Fourth Industrial Revolution and we are all part of it (whether we know it or not). Ensuing breakthroughs are inevitable.

What is Industry 4.0?

The Fourth Industrial Revolution, or Industry 4.0, describes the current trend of automation and data exchange in manufacturing technologies. It includes cyber-physical systems, the Internet of things, cloud computing, and cognitive computing. As a result, we foresee the rise of “smart factories”, where machines may operate collaboratively with humans, navigate environments autonomously, make decisions on the fly, and even do local process optimization.

The first productive deployments have generally been limited to digital automation via IoT and sensors, e.g., a robot turning screws, or sensors tracking parcels in trucks or a 3D printer printing spare parts. (And robots aren’t always the answer.) But that’s today. What’s coming next? And what is Germany’s role?

Germany and Industry 4.0

Germany’s reputation and economy are firmly built on the country’s famed manufacturing legacy. Global producers including Audi, Daimler, Bosch, Siemens, Bayer, ThyssenKrupp, Adidas and countless smaller yet crucial mid to small-sized manufacturing businesses hail from the land of “bier and wurst.” With so much riding on the continued success of the manufacturing sector, it is no surprise that Industry 4.0 turned from a buzzword to a central pillar of Germany’s “Action Plan High Tech Strategy 2020"

Platform Industrie 4.0 (as it is known) is the German government’s push to maintain Germany’s stronghold in the manufacturing sectors, but as the steering Committee Chairman (and SAP Head of Product & Innovation) Bernd Leukert wrote “it is by no means an exclusive club for any particular industry or region” but rather “a business-outcome-driven digital transformation approach to generate value from the collaboration of multiple partners in ecosystems across value chains and industries.” In other words, representatives from industry, trade unions, research institutions, and political groups are urged to work together to make the future happen sooner rather than later.

Is this starting to sound like a revolution yet?

Like all great revolutions, Industry 4.0 boasts a manifesto: 4 design principles established to support companies in identifying and implementing Industry 4.0 scenarios.The four guiding principles are :

Interoperability: machines, devices, sensors, and people need to be able to connect and communicate with each other via “the Internet of Things (IoT) or the Internet of People (IoP)”

Information transparency: information systems need to be able to create virtual copies of the physical world via sensor data.

Technical assistance: this consists of two parts, the first is informational assistance in which “systems support humans by aggregating and visualizing information comprehensibly” to enable humans to make informed decisions and solve urgent problems. The second part requires “physical systems to physically support humans by conducting a range of tasks that are unpleasant, too exhausting, or unsafe for their human co-workers.”

Decentralized decisions: machines and cyber systems are autonomous, capable of making decisions, assigning tasks and performing them without any need for human intervention.

The Tech is there, but who will deliver it?

As things stand it takes a “combination of technology and the corresponding domain knowledge (in value chains, maintenance, or process modeling, for example) to produce actions that deliver value.” New capabilities coupled with organizational transformation are required to bring the revolution to factory shop floors. Startups are often best positioned to bring forward these new capabilities.

With their lean approach to ideation, prototyping, implementation and business model innovation, startups are able to combine technical expertise and flexibility to deliver solutions unhindered by traditional organizational and bureaucratic restraints. What startups typically lack, however, are access to data (e.g., to train algorithms) and the opportunities to work with/sell to legacy industries.

In-house innovation teams, who often have the understanding, use case expertise, customer relationships, and technical competence to address emerging edge cases, may be focused elsewhere (e.g., building or enhancing products to that operate at scale and deliver significant returns to the parent company). Startups therefore can complement corporates nicely in delivering the Industry 4.0 vision.

The SAP Industry 4.0 Startup Program

SAP has a longstanding reputation of being an open driver of innovation and collaboration. Recognizing the need for innovative solutions and also the responsibility we have to our customers to deliver the very best technologies, SAP.iO has joined forces with the award-winning SAP IoT Startup Accelerator to put together the SAP Industry 4.0 Startup program. By addressing both industry and startup needs, the program can accelerate the rate of adoption amongst disruptive technologies and industries.

This zero-equity ask program is designed to provide startups with curated expert support from both inside and outside of SAP over the span of six intensive weeks. Through workshops and dedicated training, startups will receive: 1) mentorship across product development, industry specifications​, understanding of B2B businesses and B2B sales, 2) exposure to SAP technology, data, and APIs, and 3) opportunities for customer interactions. The mentor-driven approach will also provide startups with invaluable feedback about their solution, business model, funding, and go-to-market strategy​ as well as their sales strategy, and marketing efforts.

The aim of the program is to help startups identify and address innovative use cases and business opportunities, that lead to high value outcomes for SAP customers.

When? Where? What?

Selection is underway for the program’s Launch on May 28th in Berlin. If you want to see who made the cut - come and join us at the kick-off event. The revolution starts now!

A Big thank you to Ram Jambunathan for the thoughtful edits and invaluable feedback on this piece.