Over the last 3 centuries, the industry has evolved from the first mechanization through water and steam, to the development of mass production with the help of electricity, to the automation through the computer, and finally to the development of cyber-physical systems. Industry 4.0 refers to this last point and thus describes the digital transformation that has been in full swing for more than 10 years now and which was initiated by the automation of processes with the help of AI (artificial intelligence) and IoT (Internet of Things).

In the area of digitalized B2C products, American companies such as Google and Amazon dominate the market, and the chances of German companies catching up are slim. However, if we look at the area of industrial digitalization, there is enormous potential for German companies. As Europe's largest economy, experts see great growth opportunities for Germany in the area of digitalization, despite its current poor ranking in international comparisons [i]. The fact that Germany is lagging in international comparison is due on the one hand to the suboptimal structural setup, such as the lack of national network coverage, and on the other hand to the fact that the German industry, consisting of small, medium-sized, and large companies, is not taking advantage of the opportunities at all or only in parts.

Another problem is the lack of imagination in many companies. Digitalization is often understood as the "simple" switch from analogue to digital, such as storing information on computer files instead of filing up folders. Other methods can include using clouds, expanding digital channels, and generally modernizing IT infrastructure.  These are important steps but do not exhaust all the current possibilities. Digitalization in the Industry 4.0 is primarily concerned with connecting all the digitally collected data with the help of AI and IoT, highlighting correlations, and using the findings to simplify and improve processes.

IIoT entry

So if a company wants to fully exploit its potential to avoid falling behind the competition, it should look into IIoT (Industrial Internet of Things). IIoT has various possible applications. To find out in which form it is suitable for your company, you should ask yourself the following questions:

  • Do I want to reduce my production costs?
  • Do I want to understand more precisely how my hardware is being used in the field?
  • Do I want to be informed early on when maintenance is due?
  • What information am I missing about the usage of my hardware/devices?
  • Do I want to make product innovations or product optimizations, but I don't have data on the status quo?
  • Do I need to enable connectivity of my hardware/devices to keep up with the competition?
  • Do I have a recurring customer problem that I would like to solve?
  • Do I want to build a digital business model?

By answering such questions, an (industrial) company can fathom whether it would make sense to implement IIoT applications and whether they would be used externally or internally. For example, internally the production chain could be optimized (and costs saved), or externally a better customer experience could be achieved (and thus a new business model created).

IoT vs. IIoT

To be able to deal with the topic of IIoT, it is important to briefly deal with the terminology. What is IIoT, and where is the difference to IoT?

Internet of Things (IoT) is the umbrella term for hardware that is connected to the Internet through the installation and use of software and other technologies and can thus network with other devices and exchange information. IoT in general is mostly referred to in terms of applications for private individuals. The live tracking function of packages or intelligent heating systems are examples of IoT applications in the private sector. In the industrial context, we then speak of the Industrial Internet of Things. This refers to the implementation of such applications in industrial production and the connectivity of industrially used hardware.

IIoT Best Practices

As mentioned at the beginning, Industry 4.0 has been underway for more than a decade now. Some companies have already taken the step into digitalization and their example clearly shows the added value of IIoT implementation.

As an example of an external IIoT application, one can point to MAN, the German Truck & Bus manufacturer. The company provides its customers with a display device that detects transmission faults or potential malfunctions at an early stage and transmits them to the user. By implication, this demonstrably minimizes effort and cost for the customer [ii].

An internal IIoT application example is provided by the Austrian automobile manufacturer Magna Steyr. This company is pursuing the concept of the "smart factory" to offer production flexibility. The factory's entire network system is digital, giving employees the ability to measure and, if necessary, optimize the efficiency of processes. Furthermore, the company uses a Bluetooth application to test the concept of "smart packaging" for itself [iii].

These were just two of many examples of successful IIoT implementations in the DACH region. Bitrock also already has several IIoT successes under its belt. For example, in collaboration with Giesecke + Devrient, we developed, implemented and successfully rolled out an IIoT application for the company.

You can learn more about Bitrock IoT projects in our case studies! 

Act now!

IoT has so many applications and opportunities in the area of industrial production. If implemented correctly, it can generate enormous internal or external value for a company, which can be expressed in many different forms, such as cost reduction in production or process optimization. So why do so many companies still shy away from using IoT?

  • The fear of too high investment costs? This should be weighed upon the basis of a business case before development and implementation.
  • Does this make IT security too complex? The new technology and infrastructure can be designed securely from the start ("security by design") if you work with the right experts.
  • The employees do not have the necessary know-how to deal with the new technology? This is where tandem models come in handy, which we also like to pursue with our customers. During the implementation period, the employees accompany us and we can thus ensure the transfer of knowledge and take away the employees' fear.

Hopefully, we will see many more successful IIoT projects in the coming years, and together we will manage to win the race for industrial digitalization.

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