Internet of Things Drives Manufacturing Change
Soon, the Internet of Things could redefine manufacturing to the point where products can alert operators to upcoming failures before there’s so much as a blip in the assembly line, or perhaps even repair themselves before any damage is done. But with that promise comes challenges.
To discuss these issues, McKinsey’s Markus Löffler and Andreas Tschiesner sat down with Siegfried Dais, deputy chairman of the board of management at German engineering company Robert Bosch GmbH, and Heinz Derenbach, CEO of Bosch Software Innovations GmbH.
As manufacturing adopts the Internet of Things to the point of creating the new “Industry 4.0,” Dais believes that logistics will spearheading that push, which in turn will make the supplier network more and more complex and perhaps even farther reaching since factories can easily become integrated with other facilities across the globe.
From a logistical standpoint, this means manufacturers may be able to reduce their inventories, but it also means coordinating with suppliers from around the world, and dealing with longer transport times and additional manufacturing steps that may follow.
And from a software point of view, Dais says that this means developing an architecture stable enough to hold such a vast network together.
“I think it will primarily require algorithm specialists and software architects,” Dais says. “We will need ‘steering instruments’—new algorithms and applications that interlink millions of things that ensure that everything runs stably, and that are synchronized across the entire value chain.”
To make this happen, Dais foresees two competencies coming together: using the latest tools in logistics, and finding talent capable of designing these sophisticated algorithms in a way that is robust as well as user-friendly.
“One core element is the ability to create models,” adds Derenbach. “It is essential to translate the physical world into a format that can be handled by IT. This requires mathematical, domain, market, and context know-how. In the connected world, we cannot separate the physical world from business processes… [which] means that a physical device becomes an active part of a business process: delivering data, sending events, and processing rules. This notion is driving us.”
Once this happens, Dais points out that no longer will there be a difference between the flow of material components down the supply chain and the information that surrounds it, because the information will become attached to each part of the physical product. And as Derenbach explains, this means not only new types of interdisciplinary collaboration, but it would means that mechanical engineering will soon become inseparable from IT.
