The manufacturing industry still plays a weighty role in Germany. Industrial companies generate 22.5 percent of the country’s gross value added, and the export rate is 50 percent. Manufacturing is also responsible for a good fifth of all greenhouse gas emissions in Germany.  Resource savings therefore have a huge impact in this pivotal sector of the German economy. Potential savings can be tapped above all by improving resource efficiency, which in turn can be achieved by optimizing the use of materials in production. Given the huge volumes of energy devoured by industrial production, there is also no shortage of opportunities to realize savings and improve energy efficiency. At the same time, in its capacity as the leading international industry supplier, Germany delivers plant and machinery for industrial production throughout the world. By the same token, it is also highly sensitive to technological trends in industry.

A powerful automotive sector, one of the driving forces behind the German economy, is itself rooted in the wider manufacturing industry. Large numbers of German midcaps have a global footprint. Some 1,500 of them stand out as “hidden champions”, their specialized niche solutions occupying leading positions on the world’s markets. In mechanical and plant engineering and in automation systems, too, German providers lead the international field.

There is therefore no question about the impressive system solution credentials of German companies. Especially in industry, digitalization is encouraging an ever more pronounced systemic approach driven by a number of players. Together, these players are developing new, innovative business models that have positive economic and ecological implications for the lead markets for environmental technology and resource efficiency.

The figure illustrates an industrial production facility and its links to the outside world. Many components are already facilitating high productivity and greater resource efficiency in industrial production. Suppliers such as the producers of raw materials and traditional providers of intermediate products provide production facilities with materials to feed further production steps – the steps that transform the materials into goods. Traditionally, the consumers of industrial products are retailers, service providers, private individuals or other industrial customers who themselves use or refine the products they buy. In conventional industrial production, a variety of machines, sensors, robots and vehicles support the delivery, manufacture and logistical distribution processes, all of which are heavily standardized and automated.

Industry 4.0 is all about increasingly joining up humans, machines, equipment, logistical chains and products to form smart, digitally connected systems in which production can be largely self-organized and thus becomes more energy-efficient and resource efficient. Connectivity in the context of Industry 4.0 raises production efficiency, thereby tapping into fresh potential to save energy and materials. Digital data forms the basis for predictive maintenance. The modern sensor technology used to continually monitor the status of production equipment generates vast quantities of this data. Analyzing it then allows potential “trouble spots” to be identified and remedied before they cause disruptions. Lengthy outages or disruptions in the production facility can thus be prevented.

Components and structure of the digital system “Industry 4.0”

Companies involved in the digital system

Within the digital system “Industry 4.0”, the implementation of digitalization affects all kinds of components and capabilities. Accordingly, a spectrum of widely differing players are rolling out suitable products and services (see Figure). Traditional technology firms and machine builders provide plants and individual components for production. Robot technology is supplied by incumbents such as Kuka and Fanuc. Companies like SAP and Cisco help to analyze the data that modern sensor technology from firms such as Elobau and Bernstein culls from the production plants. Businesses such as voxeljet and Keyence provide 3D printers for industrial production, while the likes of Com2m take care of interconnectivity between machines and products. To simplify digital customer access, Syngenio and Salesforce are two of the players that market cloud and software solutions for corporate customers. In addition, many firms specialize in individual niche areas in which each seeks to establish a competitive advantage.

Some of these firms are from other industries. But each one contributes the specific capabilities it has acquired in its own core market, extending its portfolio of products and services into the field of Industry 4.0. Apart from the large number of relevant companies, one characteristic feature of the “Industry 4.0” digital system is an ever increasing degree of homogeneity: Software providers like SAP and SAS today find themselves competing with companies such as Siemens and Bosch, which now no longer merely sell machinery but also IT solutions for Industry 4.0.

Meanwhile, start-ups armed with innovative offerings are launching an assault on – and occupying key positions in – the Industry 4.0 value chain. Munich-based Magazino is one of them, developing intelligent robots to handle the logistics of individual objects in the context of Industry 4.0. The devices and services developed by start-ups are powerful drivers of the ongoing dissemination of digital business models on the Industry 4.0 market. Many of them occupy positions in connectivity and data management. Innovative software solutions from firms such as Axoom, PSI and Q-loud leverage M2M communication to forge networks across the whole industrial production process. By occupying these important communication interfaces, start-ups position themselves as key drivers of digital connectivity in Industry 4.0.  

The digital system “Industry 4.0” – Segmentation and examples of players