The new language of transformation

Siemens CTO sees U.S., Germany leading the move toward an industrial Internet.


Siegfried Russwurm is a member of the Managing Board and Chief Technology Officer of Siemens AG. Courtesy: Siemens AGHannover Messe provided a stage for President Barack Obama and German Chancellor Angela Merkel to press their cases for boosting U.S.-European trade, particularly by advancing negotiations on the Transatlantic Trade and Investment Partnership.

But the world's largest industrial trade fair revealed yet another partnership that the world leaders can pursue to further economic growth: The United States and Germany can work together to lead a Fourth Industrial Revolution that delivers unprecedented creativity, versatility, speed, quality and cost-effectiveness to global manufacturing.

In Germany, we call this Industrie 4.0. In the United States, the terms heard more often is the Industrial Internet of Things. But while the labels may vary, the definitions are universal. Industrie 4.0 is the digital transformation of industry driven by state-of-the-art information and communication technology.

Early estimates are that Industrie 4.0 can deliver efficiency gains of between 6% and 8% annually to global companies. The global value added of investment in industrial Internet is forecasted to increase from $23 billion in 2012 to an incredible $1.3 trillion in 2020. There is more to this than shop floors filled with smart robots and connected, automated machines. With the rise of increasingly sophisticated industrial software and hardware, companies are now able to merge real and virtual production environments.

New products, even new factories, can be simulated, modeled, and tested virtually. This not only enhances speed to market; it brings new levels of flexibility and efficiency into large-scale production. For the first time, the doors are open to mass customization—something manufacturers traded off long ago to have moving assembly lines.

Merkel and Obama, the first U.S. president to attend the event, were able to see in Hannover that this new digital frontier for manufacturing is not just a concept. Throughout the fair, visitors saw a new wave of products, solutions and services developed both by and for industry.

Our company, Siemens—which now has more than 18,000 software engineers and is already helping customers digitalize their value generation network-provided application scenarios showing how Industrie 4.0 looks in practice.

The United States and Germany are well positioned to push this new industrial age forward. Over generations, our countries have each made important contributions to the development of modern industry, with each of us developing complementary strengths.

Combined strengths

Today, the German economy is guided by a network of major corporations and small and medium-sized companies that nurture highly sophisticated manufacturing technologies. Germany is a world leader, for example, in shop-floor control software, though our real engine is our skilled workforce and innovative strength. (Measured on patent applications per million people, Germany is the world leader.)

The United States economy has been trending towards reindustrialization. Manufacturing activities that had been given up or outsourced have been returning. In light of this, the United States was recognized as the Hannover fair's partner country for the first time in the nearly 70 years since the inaugural event.

For manufacturers, America offers favorable energy costs, economic incentives such as strong venture capital, and a truly inspiring environment for digital solutions, symbolized best by places like Austin, Boston and Silicon Valley.

Facing challenges

The United States and Germany must all work together to overcome some serious challenges. First, big investments are needed to overhaul our industrial bases. To move to Industrie 4.0, Germany will need to invest $40 billion annually through 2020. In the United States, the average age of manufacturing assets and equipment in operation is more than 35 years old. Currently, only 20% of German companies use connected Internet technology systems to control production processes, while only 5% of American companies have implemented a big data analytics strategy.

Second, Industrie 4.0 nations will need to develop global industry standards for interoperability. As electrification drove forward a second industrial revolution, it took a "war of currents" between the great inventors of the day to settle the question of whether to adopt alternating or direct current. Alternating current won. Yet even today the question is not entirely answered.

As we enter this new revolution, the key to success will be collaboration across national borders and emerging digital platforms. Without global industry standards for interoperability, cross-country and cross-company value chains cannot be achieved.

The United States, with its Industrial Internet Consortium and its National Network for Manufacturing Innovation, and Germany, with our own national effort, Platform Industrie 4.0, must cooperate on both standardization and testing.

Participants in Platform Industrie 4.0 have already developed a framework for competing companies to independently develop networked solutions, while the Industrial Internet Consortium has initiated a comparable effort. These activities are not competing, but complementary. We want to combine the synergies of German and American efforts much more intensively.

No company, country or government will be able to master the complexities of digital transformation in isolation. We will need to pull together our strengths, experience, and expertise instead.

In Hannover, you could hear this new industrial language being spoken.

Siegfried Russwurm is a member of the Managing Board and Chief Technology Officer of Siemens AG.

The Top Plant program honors outstanding manufacturing facilities in North America. View the 2017 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
Each year, a panel of Control Engineering and Plant Engineering editors and industry expert judges select the System Integrator of the Year Award winners in three categories.
Welding ergonomics, 2017 Salary Survey, and surge protection
2017 Top Plant winner, Best practices, Plant Engineering at 70, Top 10 stories of 2017
Pipe fabrication and IIoT; 2017 Product of the Year finalists
Product of the Year winners, Pattern recognition, Engineering analytics, Revitalize older pump installations
Control room technology innovation; Practical approaches to corrosion protection; Pipeline regulator revises quality programs
The cloud, mobility, and remote operations; SCADA and contextual mobility; Custom UPS empowering a secure pipeline
Setting internal automation standards
Knowing how and when to use parallel generators
PID controllers, Solar-powered SCADA, Using 80 GHz radar sensors

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
The maintenance journey has been a long, slow trek for most manufacturers and has gone from preventive maintenance to predictive maintenance.
This digital report explains how plant engineers and subject matter experts (SME) need support for time series data and its many challenges.
This digital report will explore several aspects of how IIoT will transform manufacturing in the coming years.
Maintenance Manager; California Oils Corp.
Associate, Electrical Engineering; Wood Harbinger
Control Systems Engineer; Robert Bosch Corp.
This course focuses on climate analysis, appropriateness of cooling system selection, and combining cooling systems.
This course will help identify and reveal electrical hazards and identify the solutions to implementing and maintaining a safe work environment.
This course explains how maintaining power and communication systems through emergency power-generation systems is critical.
click me