Next industrial revolution brings mixed outlook

The Bosch Group is leading the way to the next industrial revolution, which has been named Industry 4.0, by piloting complete smart technology and wireless automation supply chains at some of its 250 factories across the world.

The group is in the unique position of being both a lead operator and a lead provider of Industry 4.0 solutions.

Bosch also develops and offers automation products, sensors, software and services for Industry 4.0.

For the programming, commissioning and operation of machine control systems, Bosch has developed a new technology, the open core interface.

Previously, all major manufacturers of control technologies had defined "corridor" of functions available to original equipment manufacturers, or OEMs.

If they wanted to achieve functions outside this predefined corridor, OEMs had to turn to manufacturers for help.

Bosch said its open core interface changes this. The group said it created an app that makes it possible for programming to be done on a standard tablet computer, in the language of the OEM's choice and using core functionalities, even in real-time applications.

Connected industrial operations will consume less energy, as they are organized to optimize machine usage, labor and product and service delivery, Bosch said.

In another pilot project, the company has reduced energy consumption by approximately 25 percent per year.

By using an intelligent software function for energy peak management and recuperation, the company achieved an additional reduction of 10 percent.

Bosch said Industry 4.0 was even more far-reaching than the models outlined above.

Industry 4.0 will change traditional ways of doing business and lead to entirely new business models, according to Bosch.

It is also expected to attract new players, especially from the IT world, to the manufacturing industry to change customer-supplier relationships.

On the basis of data from the manufacturing process, these new players will be able to offer customers new solutions, such as predictive maintenance, according to Bosch.

If data analytics can be used for condition monitoring, they will allow not only wear and tear to be detected at an early stage, but also spare parts to be ordered in good time.

Bosch said there was no reason why such condition monitoring should be the monopoly of traditional manufacturing companies, however, access to customer data and big data analysis will be crucial to the success of Industry 4.0.

Established mechanical engineering companies may lose their service business to new companies offering such services.

Implications for China

Such a major shift in manufacturing philosophy will affect the global industry for years to come and China will not be immune to this development. Bosch said Industry 4.0 will lead to improvements in productivity and resource efficiency, but its potential benefits are even greater if it is extended to include all stages of the value chain - suppliers, manufacturers and customers, as well as international manufacturing networks.

Higher productivity will allow higher wages and may help to alleviate labor shortages.