Jürgen Thurner
Jürgen Thurner
Juergen Thurner brings 28 years of expertise in various senior management positions of companies like Hewlett-Packard, Sanmina, Multi-Fineline Electronix and Flextronics. Founder of xprts4xInc - Thurner Suadicani & Partner. He lectures International Operations Management at the European School of Business at Reutlingen University. One of his main subjects is Industry 4.0 and the Internet of Things.

The Internet of Things, Industry 4.0, the Smart Factory and how these subjects relate to each other

(Image: ©Chesky)

First of all, hello everybody here in the brand-new smart smt factory forum. Looking at the community of bloggers in this forum, I’m pretty convinced this will become the place where experts meet and where users get useful information and advice on their journey to the digital factory.

Nowadays a lot is being published about Industry 4.0, the Internet of Things (IoT) and the Smart Factory. However, everybody is coming from a different angle and has a different view on these subjects. If you read articles in Electronic Manufacturing mags, they mostly talk very technical about M2M interfaces and the standardization of communication protocols, while others look from a 30,000 ft. view on IoT and how this will change our lives.

So, let’s have a quick look on how these things are related and what the one has to do with the other.



Let’s start with IoT. What it describes is basically how every kind of device – „thing“ – becomes a connected device and hence the ability to communicate with another „thing“.

If then intelligence is applied to these communicating devices, the system becomes „smart“ and can take its own decisions to achieve a desired result. What sounds pretty „artificial“ contains such a huge amount of use cases in the future, that we can hardly overlook today the full potential of opportunities that IoT will bring. The most obvious one of course is related to the electronics manufacturing industry: every device that wants to become a connected device needs electronic hardware. In 2016 there are approximately 6.5 billion connected devices on the planet. In 2020 it will be more than 20 billion. That’s what I call a business opportunity! All these things need to be manufactured!

Now let’s move on to Industry 4.0. Originally started as „Industrie 4.0“, the research program originated and funded by the German government was intended to re-vitalize the German manufacturing industries. The „4.0“ was the indication that by the use of modern communication and IT technologies, the fourth industrial revolution could be ignited. Meanwhile the term has been adopted internationally. But what is behind it? Industry 4.0 is basically the implementation of the principles and technologies of IoT in industrial environments. Just like „making things smart“, here we are attempting to make machines smart. Most of nowadays machines are already connected, older ones need to be re-furbished to make them connected ones, but all connectivity has a limited value if no intelligence is applied to those machines and the network they are part of. It is the intention that in the future machines can take their own decisions in order to optimize process flows and process capabilities, reduce lead times and the overall cost of manufacturing.

Finally, let’s come to the Smart Factory. This is basically the implementation of Industry 4.0 in the real industrial world. Connecting already smart machines to a network of value generation that is not limited to smart machines. Smart materials, smart warehousing automated material distribution and machine change overs are also a part of the smart factory. To an extend where the entire shop floor more or less controls itself and finds the best routings and process flows, utilizing available capacity and load balancing up to an optimum and hence reduce throughput time and cost. Even the customer himself will become a productive part of the smart factory.

However, this all will only be possible with new IT technologies such as Cloud Computing and Big Data. Smart data algorithms and the ability to retrieve and analyze unstructured data from various sources – including human beings – are needed to make the vision of the smart factory reality. But that’s material for another blog.

To summarize, it can be said that the Smart Factory is the nucleus of Industry 4.0 and the realization of the Internet of Things in an industrial context.

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