Industry 4.0

In simple terms, Industry 4.0 refers to nothing other than optimizing the entire value chain during the life-cycle of a product through digitalization and networking. The integrated product represents the pinnacle of this development. It contains knowledge, communicates with machines, tools and humans and autonomously determines its own ideal path through the production process by accounting for system malfunctions, scheduling priorities, energy consumption, etc.

Industry 4.0 is the reaction to increasing cost and innovation pressure arising from the growing demand among customers for individual solutions. Production companies now have to provide their customers with detailed information about the manufacturing process. These customers wish to know exactly which batch the product originates from, the material used, along with how it was processed and tested. To fulfill these requirements, an ideal production facility has to be able to obtain all the relevant data and analyze it automatically.

Yet what exactly does Industry 4.0 mean for intralogistics? The rapid development of the Internet laid the foundation for Industry 4.0. Innovations such as cloud computing (providing IT infrastructure and services such as storage, processing power or application software as services via the Internet), big data (large and complex quantities of raw data from diverse sources) and the ‘Internet of Things’ (the increasing interconnection of devices, sensors, etc. via IP networks) are all integral aspects of this development. The keyword for intralogistics is Smart Logistics.

Customers now want to be able to access inventories from anywhere and at any time and also obtain availability information. As a result, speed, precision, flexibility, and availability have become critical competitive factors for logistics companies. This situation demands transparency throughout every step of the process. The boundaries between the real world and the virtual world are becoming less and less distinct. One logical consequence is the need for a network between business operations and the warehouse.


Yet the networking continues. Rainer Buchmann, CEO of SSI SCHAEFER Automation GmbH, describes one example: “A package which leaves the warehouse can also include all the necessary information: contents, status, destination, origin etc. This information is so detailed that the package can effectively tell the deliverer where it has to be unloaded along the route and the optimum place to load it.”

This means that data needs to be exchanged between companies. However, a number of obstacles have to be overcome first. The greatest obstacles are the lack of standardization and data security.

“Data has to be exchanged between different companies throughout the entire value chain”, explains Thilo Jörgl, Chief Editor of the trade magazine Logistik heute. “Companies offering closed systems for intralogistics will face problems because they increase the difficulty of or even prevent this type of data exchange.”

Standardized systems are absolutely essential in the age of Industry 4.0. “The market will soon demand open standards”, says Rainer Buchmann with conviction. “However, the issue of data security currently remains unresolved. That is why this needs to be a shared standard.”

Companies and the Government have already launched initiatives to address this problem. With regard to data, this means that it is no longer stored on the company’s own high-security server but in the cloud, another key element of Industry 4.0.

Data will also play an increasingly important role in intralogistics. Big data lives up to its name, given the vast amounts generated by sensors integrated into machines and systems, by process information and drawn from innumerable other sources. Yet, this is precisely the problem. “The key lies in finding and monitoring the useful data within this flood of information. Which data is important and which do I need?”, says Sven Göhring, Technical Director at KNV Logistik GmbH. “For example, this is essential for predictive maintenance.”

The objective is to make effective use of big data. The hierarchal structure of traditional manufacturing needs to be replaced by vertical and horizontal data integration spanning all of the processes involved in the production chain. This means that the data is no longer used by the production alone. Instead, other areas of the company make use of this information. Providing all of the key data in real time is a defining aspect of Industry 4.0. Every area of the company draws on the same sources.

Yet this requires that all of the systems within a company can communicate properly with each other. “Currently, systems are still frequently unable to talk to each other”, emphasizes Buchmann. “This is why open interfaces are so essential. Without continuous and comprehensive communication among machines and humans, intralogistics will be unable to benefit from the fourth industrial revolution.”  

Logistics companies that continue to cling to a rigid and relatively one-dimensional approach to storage and shipping will face major difficulties with remaining competitive in the near future. Many companies already utilize partially or even fully automated transport systems. The question for logistics companies is which steps are necessary to keep pace with the developments.

In future, networking between data and transport logistics will play an important role. In particular, the ‘Internet of Things’ will give rise to intelligent, autonomous vehicles that create automated flexible logistics solutions which we can barely imagine today. If one considers this development from the perspective of e-commerce, in which constantly increasing production involves transporting ever smaller batch sizes, then production facilities will eventually become impossible to operate without flexible, integrated transport logistics. In view of this, the fourth industrial revolution (keyword ’Smart Factory‘) can only succeed if logistics systems are capable of supplying raw materials, preliminary products and finished items to their correct destination by means of automated processes.

However, these conclusions have yet to achieve general acceptance throughout the logistics industry. “Mid-sized companies remain relatively conservative with regard to these issues. Many are waiting to see what the major companies will do. Then they will copy them in the next few years and decades”, observes Thilo Jörgl. Yet this is a poor strategy in a time in which digitalization is advancing at such an extreme pace. “Even smaller companies can already implement aspects such as predictive maintenance.”

Rainer Buchmann from SSI SCHAEFERs emphasizes the same point: “A modern machine or system generally includes all the necessary features. As a result, every company already possesses the foundation for Industry 4.0, regardless of its size.”