Digitalization and automation triggered a fourth industrial revolution. As digital networks and cyber-physical systems are deployed, production and logistics tend to become auto-regulated. This entails nothing less than radically new modes of doing business and providing services.
The terms Industry 4.0 and Internet of Things suggest not only that computers and smart phones communicate with each other. Also shaping the fourth industrial revolution are cyber-physical systems and smart objects that are connected through the internet. By means of sensors, they are able to receive data from their physical environment and respond back to that environment.
In the future, the smart factory features industrial complexes, machines, products, and materials that are equipped with embedded intelligence and thus able to communicate with other systems. Production and logistics operate in increasingly auto-regulated ways.
The Intelligence of Autonomous Systems
Cargo robots, transporting shipments independently, anticipate the vision of a fully automated process. The port of Hamburg, with its smooth logistics, is inconceivable without intelligent solutions governing the flow of goods. The port’s truck traffic is coordinated by Smart Port Logistics and GPS navigation in impressively precise ways.
Self-driving vehicles are another example of extremely advanced cyber-physical systems. They analyze their own situation in traffic and constantly obtain data via the internet. Ideally, they drive to their destinations in safe and independent ways.
Starting in 2018, new vehicles registered in the EU must be equipped with a SIM card via the eCall emergency call system. In principle, the system required for emergency cases can be used for all conceivable new services in connected cars. At the same time, this raises issues about data protection, data sovereignty, and IT security.
Overall, the target is to accelerate the speed of response, up to the point of reaching real-time supply chains and even anticipatory logistics. To be regulated by an inbuilt intelligent evaluation of comprehensive and up-to-date information.
Mass customization: individualizing production and services
What sits at the core of the Internet of Things? Smart objects that can communicate with each other and even act autonomously.
This makes it possible to build items in smaller quantities, which allows for greater
individualization of products, at lower prices. 3D printing can produce minimal series in decentralized ways, including individual items. Already, additive manufacturing processes are used in the consumer goods sector, by jewelry and watch designers, shoe manufacturers, and sports equipment producers.
This technology is perfectly suited for the structures of tomorrow, which are customer-oriented and extremely flexible modes of production. Connecting the processes of ordering, producing and delivering is the next step of a development that leads to individual mass production in a lot size of 1.
Great opportunities, new risks
By means of smart objects, the Internet of Things reinvents the process chains of value creation. It establishes innovative services. This involves connected factories where machines, workpieces, and production orders constantly exchange information. Production becomes more flexible and efficient.
The Internet of Things inaugurates digital forms of doing business that harbor enormous opportunities. Yet these chances do entail challenges, too, prime among them the security of digital systems.
Future developments also face considerable legal hurdles. This affects many aspects of commercial law, ranging from IT implementation and digital communication to rights concerning data, know-how, data protection, HR issues, and tax law. Existing legal regulations do not properly cover these digital dimensions.
What emerges from these evolving technical, economic, and legal frameworks is the imperative to fully exploit the digital potential. This requires a holistic concept that applies company-wide.
The topics here presented dealt with future and innovation. They were developed in cooperation with the Zukunftsinstitut, which, as one of the most influential think tanks in European trend research, continuously investigates the changes taking place in business and society.