Industry 4.0 – the pathway to the simple supply chain

Industry 4.0 is the topic when visiting current trade fairs and congresses. Talks are about the Smart Factory as forth industrial revolution. Industry 4.0, however, is not merely a vision anymore since many companies already head towards it by realizing first steps. What exactly is the Industry 4.0? And is it relevant for everybody?

The vision of Industry 4.0 is clear: in the near future, the Smart Factory will continuously optimize all processes. Digitalization plays a major role here. The constant availability of all essential information in real-time enables the planning and controlling of all processes along the entire industrial supply chain.

Industry 4.0 is crucial for manufacturing enterprises as well as for companies facing extreme logistics expenses. According to a study conducted by the Fraunhofer Institute, numerous sectors will benefit. Automotive manufacturers, mechanical engineers, electrical goods manufacturers, chemical plants and businesses operating in the fields of information- and communication technologies will especially benefit due to optimized processes.  

Industry 4.0 – the requirements

In Industry 4.0 production and logistics increasingly merge with communication- and information technologies. Up to now, profoundly integrating information technologies within the fields of production was seen with skeptical eyes. Doubts about dependencies on, so far unstable systems not yet aligned with large data quantities, are no longer appropriate. Various technologies have proven capable of processing and analyzing data at peak periods in real time.  

These technologies master Big Data for high data volumes, machine-to-machine communications (M2M) and high data transfer rates and form the ideal foundation for the conversion to Industry 4.0.

Industry 4.0 in the fields of logistics

Primarily Industry 4.0 seems to address manufacturing measures. Industry 4.0 however, also means to interlink all logistics and intralogistics processes within the warehouse – most ideally realized with the SAP EWM warehouse management system. Warehouse processes are supposed to operate at their optimum without the interference of the employee. SAP EWM can already check, prior to the storing, whether incoming goods or materials are instantly suitable for manufacturing or shipping. So the SAP EWM-Crossdocking skips the storing process resourcefully.

Furthermore, the SAP EWM warehouse organization takes care of optimizing the bin status report by automatically integrating stock transfers into daily operations. This is particularly important when it comes to seasonal fluctuations. Above all, warehouse processes are supported by an integrated material flow control in real-time through the interlinking of automatic components by SAP EWM.

Industry 4.0 in the fields of production

The outcome after the conversion to Industry 4.0 represents a fusion of physical and digital processes. Systems, inevitably, have to feature a direct link to production lanes.

SAP ERP and SAP Manufacturing Execution (SAP ME) are integrated applications which communicate with production lanes by means of direct interfaces.  Line supervisors are not required any longer, double data maintenance and inconsistent databases can be eliminated.

Even maintenances and quality assurances function fully automated in Industry 4.0. Ideally, malfunctions of technical errors are identified prior to failures in applying intelligent maintenance-and service scenarios featuring predictive analysis functions.

Sensors are continuously recording error- and service information which are delivered to IT- and unit components. A process enabled by applying open, configurable systems and communication standards.

Advantages and chances

Benefits of Industry 4.0:

  • Increase of productivity thanks to improved production unit loads
  • High flexibility thanks to the adaptability to market developments
  • Reduction of warehouse costs thanks to resource management
  • Immediate reaction to unscheduled results thanks to the availability of all process data
  • Reduced error rate
  • Sustainability thanks to energy efficiency
  • Cross-industry network approaches
  • Coordinated processes between companies ensure horizontal integrations

Disadvantages and risks

Industry 4.0 may predominantly bring benefits but a few risks have to be mentioned:

  • Additional costs due to investing into increased IT security, for example by IT Service Management
  • Absolute security is never guaranteed
  • Costs due to employee trainings teaching the handling of new systems and applications

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