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Future of Manufacturing in Germany

Germany to lead digitalisation with Industrie 4.0

logo_2B1stInitiated in 2006, the German program Industrie 4.0 was the first structured initiative to be released by a developed country Government regarding the Future of Manufacturing.

In 1989, the fall of the Berlin Wall was followed by series major political and economical decisions such as one East Deutsch Mark should be equal to one West Deutsch Mark.

In doing so the intention was to boost the economy in the previous East Germany where the salaries were less than a tenth of West Germany.

German_Future-of-Manufacturing_Industrie_4.0In the 1990s years this gap in the labors costs between German regions motivated companies to go East for cheaper production.

In the 2000s years with the introduction of the Euro, Germany repeated the operation going further East to Czech Republic, Poland, Romania  or Turkey to maintain competitive labor costs.

In parallel most of the developed countries were running to China for the same reason.

This massive transfer of production to eastern countries and to China, thus nicknamed the World Factory, triggered number of alarming bells within the German industry community.

As first exporter of industrial goods in the world, Germany realized the risks in the long run of this delocalization for its economy and the urgency to invent a new industrial universe in order to preserve its competitive market leadership on the next decades.

Mobilizing all the sectors of its industry, the task force created to investigated solutions came out with the Industrie 4.0 concept in adding a new dimension the manufacturing process, the digitalization, to overcome this challenge to invent the Future of Manufacturing in Germany.

Should Germany go for Industrie 4.0 or Industry 4.0? 

With the digitalization, Germany is changing the rules to produce to the point that this Future of Manufacturing program has been branded Industrie 4.0 , as it should lead to the fourth industrial revolution.

We remind that the first industrial revolution came from the textiles machines and the steam power, the second revolution resulted from the electricity and oil energies in combination with the first mass production while the third revolution is still where we are with the development of the computers in the machines.

Four_Industrial_RevolutionsIn that respect the Germans make a clear difference between automation or robotization, which is about introducing a computer in a machine and the digitalization which is about connecting industrial systems together.

While most of the countries confuse automation and digitalization, in Germany this technology is perceived as a break through to justifies the “4.0” as to open a new dimension in industry.

The digitalization will enable the German companies to team up through collaborative platforms.

These collaborative platforms will revolution the relationships between all the key players of the supply chain.

They do not work in line any more in a customer – supplier relationship, but they interact in parallel from the emergence of the end client need to his delivery.

The expectation is to favor innovation, cut costs and reduce time to market.

In using the Deutsche spelling in “Industrie 4.0 to name their Future of Manufacturing program, Germany intended to promote the technology “Made in Germany” as a model.

Anyway the digitalization to support this program cannot be deployed in a closed system, its performance will also be related to European and global companies and requires some harmonization between all the Cyber Physical Systems (CPS).

The Internet of the Things (IoT) can become commercially viable  only after international alignment. 

Therefore the question is now if Germany should take advantage of its decade advance in Future of Manufacturing to go global with Industry 4.0 instead of standing local with Industrie 4.0.

For more information about Future of Manufacturing in Oil & Gas and Petrochemicals

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