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Industry 4.0 is no longer just about data and analytics, but about connected and automated production. Henry Ford’s mass-manufacturing concepts are on the way out because flexible and highly automated manufacturing are no longer mutually exclusive – no matter whether you manufacture a customer-specific or standardized product.

Ten years ago, the fourth industrial revolution began. The first machines in factories were equipped with sensors and connected to digital dashboards. Data has become new gold: they promised to use analytics to revolutionize the world. Are we still at the beginning of this revolution or at the end?

Today, smart sensors and embedded computing can be found everywhere: in trucks, ships, manufacturing, or warehouses. They not only generate and send information that provides valuable insights into the status and condition of machines and assets but also enable them to control the machine in real-time. What value can the business gain from this?

Let’s look at a number of deployment scenarios for Industry 4.0 in production.



Which companies benefit from being able to automatically control the entire supply chain through machines and sensors?

“Auto-control” management means saving effort in manual processes along the entire supply chain and realizing the full potential of intelligent machines and sensors.

Businesses in Europe in particular are creating opportunities here – their strength is traditionally more in customer-centric manufacturing, rather than mass production.

However, standard products also benefit from flexibility. The global crisis of supply and logistics poses challenges for every manufacturer.

Only those who dynamically parameterize production to deploy alternative materials and processes at the push of a button will win the global race for capacity and resources.

Innovative manufacturers of configurable products now offer so many variants that it is no longer possible to map them using classic routings and master data concepts. They also benefit from the “auto-control” of production.

But is the configuration of a bill of materials in product development the same as that of a production line? No. The configuration of production maps the flexibility of the machines, materials, and operators of each production line – it is the digital twin of the factory.

Specifically, it includes all possible configurations of operator guidance, machine parameters, work programs, and routings. Henry Ford chose to sacrifice exactly this flexibility for the sake of efficiency and limited himself to producing black cars. This choice poses a dilemma for many companies. Today, it concerns the maintenance of master data for production control and is amplified by the increasing complexity of the machines which is perceived as a challenge on the IT side rather than an opportunity. In this context, a production configuration offers immense advantages.


Figure 1: Agility through “remote” driven production



Data can only be the gold of the digital age if it is used to automatically optimize production.

We already find this intelligence in individual machine control, which means that the machine optimizes itself during the production process. This individual optimization of each machine alone cannot exploit the full added value of Industry 4.0.

Only when planning reacts dynamically to real-time data such as product confirmations and the factory is no longer controlled by theoretical values, can the factory reach its full potential.

The same applies to maintenance and product development. Every line of business can be integrated into dynamic feedback loops with manufacturing. As a result, the efficiency of the business increases.


Figure 2: Self-Optimization of Production Planning



Do I just use intelligent sensor systems to fill the kanban and control AGVs, or do I benefit from flexible, automated, and, above all, holistic material flow control in production?

• Manufacturing space is valuable and should not be wasted on storage of materials.

• Flexibility in supplying production lines with material is a prerequisite for agile use of production lines.

• Full transparency of material stocks in production increases planning flexibility.

These are three good reasons to prioritize material flow control and implement Industry 4.0 for end-to-end processes.


Figure 3: The management of material flows varies from company to company. Intralogistics is a priority everywhere.



Automation and mechanical engineers, and manufacturers of sensor system technology have had to prove themselves in the Industry 4.0 space over the last decade. Now there are vendors like SAP who continue to drive automation and turn such concepts into reality.

Experience the value of Industry 4.0 in an intelligent enterprise – industry-specific, tangible, and scalable – from small quick wins to big transformations – at the SAP Pop-up Factory in Walldorf.

Have we made you curious? We are only at the beginning of a move towards large-scale automation of end-to-end processes.

Become an SAP intelligent enterprise and join the revolution!

Dear reader, now, you may wonder why I personally care about the industrial revolution. I grew up right next to the Görlitz Rolling Stock Corporation in a family-owned metal workshop and I fell in love with the smell and look of machines. I got a physics degree and then worked in different positions in the automation, electronics and semiconductor industry for 15 years. When I realized that software is key to making factories even more successful, I moved from hardware to software industry. And ever since I really enjoy working with businesses to find new solutions to their challenges.