Digitization is without question the major driving force that is turning our world inside out. The spaces around us are increasingly pervaded by smart and connected systems. What started with the Internet of people will end in an Internet of everything. The phenomenon known as the Internet of Things (IoT) will affect settings of all kinds—homes, cities, traffic, logistics, retail and medicine. And it will not stop at our factory gates.
McKinsey estimates the potential economic impact of IoT applications in 2025 is between $3.9 and $11.1 trillion, of which $1.2 to $3.7 trillion is allotted to IoT applications within the factory environment. Also known as Smart Manufacturing, or Industry 4.0 in Germany, the IoT is the technological driver for fully networked manufacturing ecosystems.
In a future where all “factory objects” will be integrated into networks, traditional control hierarchy will be replaced by a decentralized self-organization of products, field devices and machines. Production processes will become so flexible that even the smallest lot size can be produced cost-effectively and just in time to the customer’s individual demands.
Despite this huge potential, the introduction of IoT technologies in the rather traditional domain of manufacturing, where investment cycles are long and robustness of processes and technologies outweigh striving for innovation, will not happen abruptly. Too many questions have first to be answered. As IoT technologies penetrate ever deeper into our factories to the smallest piece of equipment, technology providers and factory planners are confronted with a variety of hurdles.