3.

1 Value-based development stages

The introduction of Industrie 4.0 involves significantly upgrading a manufacturing company’s digital
competencies and capabilities and entails changes across large parts of the organisation. Since this
transformation is a highly complex undertaking, it will usually take several years. It should be planned and
implemented in such a way as to ensure that positive impacts on profitability – i.e. growth and efficiency –
occur at various stages throughout the transformation. Benefits should be made visible at any point in the
transformation process in order to support its overall success. This approach enables quick wins while also
driving towards the overall transformation goal.

This strategy necessitates a step-by-step approach to the company’s development. As part of the study, we
developed an Industrie 4.0 development path that starts with the basic requirements for Industrie 4.0 and
supports companies throughout their transformation into learning, agile organisations. The path comprises
six development stages. Each stage builds on the previous one and describes the capabilities required in
order to attain it and the resulting benefits to the company (see Figure 5). It is important that the capability
is built step-by-step, i.e. the benefits of the first stage can be achieved with a lower level of capability than
stage two. The transformation process is a continuous journey of many successive steps that are taken
incrementally and may not be perfectly synchronised across businesses, plants, lines, and cells. It is up to
each company to decide which development stage represents the best balance between costs and benefits
for its own particular circumstances and should therefore be adopted as the target state for the end of the
planned transformation process.

Today, companies are still confronting the challenge of creating the basic conditions for Industrie 4.0.
Accordingly, the development path begins with digitalisation. Although digitalisation does not itself form
part of Industrie 4.0, computerisation and connectivity are basic requirements for its implementation.
These two initial stages are followed by four further stages in which the capabilities required for
Industrie 4.0 are developed.

3.1.1 Stage one: Computerisation

The first stage in the development path is computerisation, since this provides the basis for digitalisation. In
this stage, different information technologies are used in isolation from each other within the company.
Computerisation is already well advanced in most companies and is primarily used to perform repetitive
tasks more efficiently. Computerisation delivers important benefits by e.g. enabling cheaper manufacturing
to higher standards and with a degree of precision without which it would be impossible to make many
modern products. Nevertheless, it is still possible to find many machines without a digital interface. This is
especially true of machinery with long cycles or machines that are manually operated. In these cases,
terminals are often used to provide the missing link between business applications and machines.

One example for the computerisation stage would be a CNC milling machine. Although it can machine parts
with great precision thanks to the use of computer numerical control, the CAD data detailing which actions
should be performed still often has to be transferred to the milling machine manually – in other words, the
machine is not connected. Another example involves business application systems that are not connected
to the company’s ERP system. This can lead, for instance, to a situation where semi-automated quality
assurance is carried out at a test station, but the recorded data is not associated with the corresponding
work order. This makes it much harder to subsequently determine which quality issues occurred in which
orders.

3.1.2 Stage two: Connectivity

In the connectivity stage, the isolated deployment of information technology is replaced by connected
components. Widely used business applications are all connected to each other and mirror the company’s
core business processes. Parts of the operational technology (OT) systems provide connectivity and
interoperability, but full integration of the IT and OT layers has not yet occurred.
The Internet Protocol (IP) is becoming more and more widely used, even on the shop floor. Since the
current IPv6 version allows for much longer addresses than its IPv4 predecessor, all the components can
now be connected without the need for network address translation. This is a key requirement for the
Internet of Things. Connectivity means that, for example, once a design has been created in engineering, its
data can be pushed to production, so that the production steps can be executed accordingly (CAD/CAM
processes). Once the manufacturing step has been completed, confirmation can be provided automatically
and in real time via a Manufacturing Execution System (MES). It also allows machine tool manufacturers to
perform remote maintenance on products being used by their customers thanks to the availability of
cheap, high-volume data links.

In existing factories, assets are kept in production for as long as they continue to produce quality products.
It is not unusual to see machines that are 50 or more years old still in use on the shop floor. Since the
Internet Protocol enables standardised communication on the shop floor, new sensor technology mean
that these assets, which remain very productive, can easily be connected in order to provide production
data.

3.1.3 Stage three: Visibility

Sensors enable processes to be captured from beginning to end with large numbers of data points. Falling
sensor, microchip and network technology prices mean that events and states can now be recorded in real-
time throughout the entire company and beyond rather than just in individual areas like manufacturing
cells, as was formerly the case. This makes it possible to keep an up-to-date digital model of factories at all
times. We refer to this model as the company’s digital shadow. The digital shadow can help to show what is
happening in the company at any given moment so that management decisions can be based on real data.
It is thus a core building block for the later stages.

Producing a digital shadow is a major challenge for many companies. One problem is that there is usually
no single source of truth – data is often held in decentralised silos. Furthermore, for functions such as
production, logistics and services it is often still the case that very little data is collected at all, even in
centralised processes. In addition the data captured is in many cases only visible to a limited number of
people who are able to access and understand the respective domain systems. Wider use of the data is
prohibited by system boundaries. In order to achieve the goal of an agile learning enterprise,
comprehensive data capture right across the company is essential for the provision of relevant data about
the operation throughout the business.

For instance, this makes it possible to more rapidly determine the delivery date variance caused by a
particular problem by means of real-time KPIs and dashboards so that production planning can be adjusted
by the production manager and customers and suppliers can be kept informed. This is one area where
companies need to change the way they think. Rather than only collecting data to enable a specific analysis
or support a dedicated operation, they must instead be able to create an up-to-date model of the entire
company at all times that is not tied to individual data analyses. The combination of existing data sources
with sensors on the shop floor can deliver significant benefits. Integrating PLM, ERP and MES systems
provides a comprehensive picture that creates visibility regarding the status quo. Moreover, modular
approaches and apps can help to build the single source of truth.

3.1.4 Stage four: Transparency

Stage three involves creating a digital shadow of the company’s current situation. The next stage is for the
company to understand why something is happening and use this understanding to produce knowledge by
means of root cause analyses. In order to identify and interpret interactions in the digital shadow, the
captured data must be analysed by applying engineering knowledge. The semantic linking and aggregation
of data to create information and the corresponding contextualisation provide the process knowledge
required to support complex and rapid decision-making.
New technologies that support the analysis of large volumes of data can be extremely helpful in this regard.
Big data is a buzzword that is frequently mentioned in this context. It is used to describe mass data that can
no longer be processed and analysed using conventional business analytics processes. The term big data
also encompasses the technologies and applications that enable these extremely large and often
heterogeneous data sets to be processed and combined.

As a rule, big data applications are deployed in parallel to business application systems such as ERP or MES
systems. Big data applications thus provide a common platform that can be used e.g. to carry out extensive
stochastic data analysis in order to reveal interactions in the company’s digital shadow.

This transparency regarding the relevant interactions can, for example, be used to carry out condition
monitoring of machinery and equipment. Recorded parameters are searched for mutual events and
dependencies that are then aggregated to produce complex events reflecting the condition of the machine
or equipment. Among other things, transparency is therefore a requirement for predictive maintenance.

3.1.5 Stage five: Predictive capacity

Building on the transparency stage, the next development stage is predictive capacity. Once it has reached
this stage, the company is able to simulate different future scenarios and identify the most likely ones. This
involves projecting the digital shadow into the future in order to depict a variety of scenarios that can then
be assessed in terms of how likely they are to occur. As a result, companies are able to anticipate future
developments so that they can take decisions and implement the appropriate measures in good time.
While measures still have to be carried out manually, longer lead times help to limit negative impacts.
Reducing the number of unexpected events caused e.g. by disruptions or planning variance enables more
robust operation of the business. It makes it possible, for example, to flag up recurring logistics issues such
as carrier failure before they even occur so that they can be prevented, in this instance by changing
carriers.

A company’s predictive capacity is heavily dependent on the groundwork that it has previously undertaken.
A properly constructed digital shadow combined with a knowledge of the relevant interactions will help to
ensure that both the forecasts and the recommendations based on them are of a high standard.

3.1.6 Stage six: Adaptability

Predictive capacity is a fundamental requirement for automated actions and automated decision making.
Continuous adaptation allows a company to delegate certain decisions to IT systems so that it can adapt to
a changing business environment as quickly as possible.

The degree of adaptability depends on the complexity of the decisions and the cost-benefit ratio. It is often
best only to automate individual processes. Accordingly, the fundamental feasibility of performing
repeatable operations autonomously should be investigated. It is, however, important to carefully assess
the risks of automating approvals and acknowledgements for customers and suppliers. Examples include
changing the sequence of planned orders because of expected machine failures or to avoid delivery delays.

The goal of adaptability has been achieved when a company is able to use the data from the digital shadow
to make decisions that have the best possible results in the shortest possible time and to implement the
corresponding measures automatically, i.e. without human assistance.

3.2 General model design

This chapter describes the general design of the model underpinning the acatech Industrie 4.0 Maturity
Index (see Figure 6). To ensure that the model provides a full description of a manufacturing company, the
acatech Industrie 4.0 Maturity Index is based on the “Production and Management Framework”.5 The
framework divides the internal aspects of a company into corporate structure, corporate processes and
corporate development.6 Corporate structure refers to those aspects of a company that are indispensable
for the production of its goods and services. Corporate processes, on the other hand, refer to the process
chains in every area of the company, while corporate development refers to the strategic and operational
development of the company.

The acatech Industrie 4.0 Maturity Index breaks a company’s structure down into the four structural areas
of resources, information systems, culture and organisational structure. A detailed description of the four
structural areas is provided in Chapter 4. Two guiding principles together with the necessary capabilities are
identified for each structural area. The capabilities are geared towards attainment of the various
development stages and provide manufacturing companies with the basis for transforming themselves into
agile organisations.

Corporate processes form the basis of the five functional areas investigated by the Index. The five
functional areas of development, production, logistics, services and marketing & sales are addressed in
Chapter 5. A vision is outlined for each functional area, illustrating the features that characterise learning,
agile companies.