[Forward] What is Industry 4.0?

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In my early years I worked in the field of industrial automation; later, to earn some money by giving lectures as a side hustle, I traveled to several cities and taught a course titled \"Industrial Internet and the History of Industrial Civilization.\" As a result, many people thought I had a good understanding of the industrial internet (when in fact my knowledge was only superficial). This morning, a close friend of LeTV asked me what Industrial 4.0 actually is. I had promised to explain it to him separately, but then I thought it would be better to organize some materials and ideas and share them with everyone, so today I’ll talk to you about this mysterious concept of Industrial 4.0. Let me make it clear first: Rabbit Brother is just a passer-on of knowledge; what I say may not be correct – it’s merely the result of processing and understanding various materials after studying them. In fact, there is no standard answer for Industry 4.0; not even the Germans have one. Let’s start with three concepts: Industrial 1.0, which was characterized by mechanization; it was marked by the steam engine, as steam power was used to drive machines instead of human labor. From then on, handicrafts separated from agriculture and officially evolved into industry. Industrial 2.0 was characterized by electrification, marked by the widespread use of electricity to power machines in place of steam power. As a result, there was a separation between component production and product assembly, and industry entered an era of mass production. Industrial 3.0, characterized by the use of PLCs (Programmable Logic Controllers) and PCs, saw machines take over not only most of the physical labor performed by humans but also a portion of the mental labor as well. As a result, industrial production capacity surpassed human consumption capacity, leading to an era of overproduction. All three definitions are quite academic; rest assured, this is the most academic passage in the entire text. Going forward, I plan to tell this story to you using the method of an old monk telling tales. To understand Industry 4.0, we first need to look at the current situation, which we call Industry 3.X. Using the trendy terminology from cultivation novels, this is the middle to late stage of 3.0 – a state characterized by complete automation and partial informatization. We still need to start with the factory’s business model. As a factory, it has only two purposes: to produce products and then sell them. Therefore, in industrial enterprises, they are usually divided into two main departments: the production department and the business department. The former is managed through MES (Manufacturing Execution System), while the latter is managed through ERP (Enterprise Resource Planning system). What’s the difference between these two systems? ERP is more focused on the management of financial information, while MES is geared toward controlling the production process. In simple terms, ERP tells you how many bottles need to be produced, when orders should be placed, and when the products are needed; MES, on the other hand, is responsible for monitoring and managing each step of the process involved in producing those bottles. In many workshops of factories in China, connectivity has been largely established between various production equipment, as well as between the production equipment and controllers. In more advanced companies, the entire factory is connected via a Manufacturing Execution System (MES), while all business departments are linked through an ERP system. Did you notice anything wrong? ERP and MES are not actually connected! Therefore, when ERP issues production plan instructions to MES, if any deviations from the plan occur during the production process (such as equipment failure or substandard raw materials), MES will make adjustments based on the actual conditions in the workshop. But ERP doesn’t know that! Therefore, it will continue to execute orders according to the original plan. Over time, there will be a significant discrepancy between the financial system and the actual situation at the factory. As for why they aren’t connected, there are two reasons. First, the companies responsible for developing ERP and MES systems are usually separate teams – those dealing with finance and those dealing with production. Not only do they not understand each other’s industry terminology and end up communicating in incomprehensible ways, but they also disapprove of one another. Additionally, the business department and the production department usually operate separately within a company, with each having its own preferred suppliers (for reasons you understand). Of course, the wisdom of the people is infinite; they certainly won’t just sit idly by while the discrepancies between the two systems grow larger. Since the systems aren’t up to the task, we can step in manually – we workers have the strength to do it. Therefore, factory workshops usually prepare a table of MES adjustment items on a regular basis and submit it to the business department, which then makes the necessary adjustments in ERP manually. The problems with ERP and MES are just a reflection of the fragmentation of systems within a factory; in fact, there are many other systems in a factory as well, such as those for design, manufacturing, procurement, and office work. These systems all function as isolated information islands, with no awareness of what the other systems are doing or what stage they are at in their tasks. One of the components encountered a special situation; the other components were unaware of this. It was only when the problem arose that it was possible to go back and modify each system one by one. By the way, the reason why Luo’s “sentimental” phone took so long to be produced is that during the design phase, the production staff wasn’t kept updated on the progress. As a result, during actual production, it became apparent that the originally designed features would lead to a very low yield rate; thus, the design had to be redone from scratch. As a result, each product has to be modified over and over again; therefore, it often takes one or two years for an industrial product to go from design to mass production. Of course, this kind of situation isn’t a new phenomenon. In the past, during the Industrial Age, products had very long lifecycles. For instance, one model of inverter produced by Brother Rabbit’s former employer, Siemens, could be sold for thirty years. Under such circumstances, a development and launch period of one or two years didn’t seem so lengthy after all. As for other issues, they were resolved through manual communication—and although mistakes did occur, everything generally proceeded without major problems. However, the dreadful wolf finally came. These two wolves are called overcapacity and the Internet. Global overcapacity has led to increasingly fierce competition among companies. The approach of selling one product for 30 years is no longer viable; if you can’t move fast, there are those who can. Lao Luo’s nostalgic smartphone was only on the market for a few months before it went from being a highly anticipated hit product to an outdated item that could be found everywhere; its product life cycle was **shortened**. The advent of the Internet era has shaken a fundamental aspect of the Industrial Age: information asymmetry. In the industrial era, since manufacturers were unable to understand the needs of each customer at low cost, they often adopted a one-size-fits-all approach, combining multiple desired features together to create one product. For example, if you want a pair of shoes that fit your feet, the shoe factory cannot know the size of your feet; therefore, it has to measure many people’s feet first and then categorize the most common sizes into 40, 41, 42, and so on. But if your feet are either too large or too small, sorry, we can’t help you. The Internet has changed this landscape; it enables people to connect with one another and with manufacturers at low cost, thereby allowing everyone’s individual needs to be highlighted. As a result, people are increasingly drawn to personalized products. However, the demand for personalized products is not that high, which requires industrial enterprises to be able to carry out rapid production in small batches. These two wolves force traditional industries to do one thing – something that industrial societies hate the most: rapid, small-batch, customized production. At this point, some preparatory work needs to be done first; that is, Industry 3.0 must first evolve into 3.X. By Industry 3.X, what is meant is the complete integration of information systems such as ERP and MES, so as to connect all the existing information silos within the factory. At this point, it moves from complete automation and partial informatization to complete automation and complete informatization, which represents the ultimate stage of Industry 3.0. Don’t underestimate this process. Just this one step alone might take China a decade or even longer to accomplish. Well, all of the above are real-world issues; after achieving perfection at version 3.0, we will embark on a journey of science fiction and complex challenges, and we will finally move forward toward Industry 4.0. In this process, in version 3.0, as well as with full automation and informatization, one thing that needs to be done is to get married and have children. This process is referred to as Industry 4.0 in Germany, the Industrial Internet in the United States. In China, the Ministry of Industry and Information Technology calls it the integration of informatization and industrialization. Meanwhile, die-hard fans of the Internet of Things call it the Internet of Everything. Here I would like to say that when all devices need to communicate with each other, there is one issue: what language should be used? Speak English, German, or Sichuan dialect? What is a communication protocol? This is a key question. You might ask why not use the communication methods available on the Internet today, namely TCP/IP protocols. It’s a technical issue that’s difficult to explain to someone with little knowledge like you (in fact, I, who used to be an automation engineer with only basic knowledge, don’t really understand it either). Simply put, the communication methods over the Internet are still too slow, lack precision, and have poor security. In industrial production, the requirements regarding speed, precision, and safety are far higher than those required for watching movies featuring the talented and virtuous Teacher Cang at home. Therefore, for the Internet of Everything, a dedicated communication protocol is essential. This is also the core issue hidden behind such trendy terms as Germany’s Industry 4.0, the United States’ Industrial Internet, and China’s integration of industry and information technology through Made in China 2025 – everyone is competing over these communication standards. The Internet in the United States is the best in the world; therefore, Americans hope to transition from the informatization level to the automation level ； Germany has the strongest machinery manufacturing industry; therefore, it hopes to progress from the automation level to the informatization level ； China is the largest manufacturing country and the second-largest country in terms of the internet industry; therefore, it doesn’t want to follow either approach and instead plans to develop its own version of \"Internet+\", known as \"Made in China 2025\". Following the convention of cultivation novels, each realm is divided into smaller sub-realmso as to highlight the differences and the excellence associated with them. I used this approach to divide Industry 4.0 into six levels as well. ▲The first phase of Industry 4.0: intelligent manufacturing. As we mentioned before, the production equipment and management information systems are connected to each other, and there is also a connection between the equipment and the information systems. Do you feel like something is missing? That’s right; the raw materials used in production and the production equipment haven’t been connected yet. At this point, we need something called RFID, radio frequency identification technology. I doubt you’d understand this, but simply put, this thing is akin to a QR code; it can carry certain information. What makes it superior to a QR code is its ability to communicate wirelessly. Let me describe a scene: in the PepsiCo production facility, three bottles come along the production line one after another; each bottle has a QR code on it, indicating that the cola in that bottle was customized for Zhang San, Li Si, and Wang Ermazi. When the first bottle reaches the filling station, it uses wireless communication via a QR code to inform the controller in the control room that Zhang San prefers things to be sweeter, so more sugar should be added. The controller then tells the filling robot, \"Add two pounds of white sugar!\" ”(Zhang San is really unlucky…) The second bottle was brought over, and it was said that Li Si had diabetes and didn’t want sugar. The controller then told the robotic arm, “This person doesn’t want sugar!” ” The third bottle came along and reported that Wang Er Mazi wanted Fanta. The controller then told the robot arm filling cola, “Take a break,” and instructed the robot arm filling Fanta, “You go ahead!” ” Yes, it involves multi-variety, small-batch, and customized production. From the moment you place an order online, each can of Coca-Cola is tailored specifically for you; all its characteristics are in line with your preferences. This is smart manufacturing. ▲The second era of Industry 4.0: intelligent products. Since the production process has become intelligent, it is logical that industrial products in their finished form can also be made intelligent. This is easy to understand; smart wearables such as smart bracelets, smart bicycles, smart running shoes, and other similar smart devices all follow this same principle. It involves using the product as a data collection device to continuously gather users’ data and upload it to the cloud, thereby facilitating user management. One of the core disagreements between Germany and the US regarding Industry 4.0 and the Industrial Internet is whether to first develop smart factories or smart products. Germany hopes for the former, while the United States hopes for the latter. As for China, we should just add it; whether it’s the positive version or the negative version doesn’t matter, as long as we can fool everyone. ▲The third stage of Industry 4.0: production as a service. As mentioned earlier, smart products continuously collect users’ data and status information and upload it to the manufacturers, which makes a new business model possible – charging for services. Many years ago, when I was working in a certain industry, that industry proposed charging for services; at the time I thought it was a stupid decision made on a whim by the Germans, but now I realize that this was part of the plan to shift production toward a service-oriented model long before Industry 4.0 came about. What’s your impression of a certain brand? Refrigerator? You fool – that company has quietly acquired several well-known software firms over the years, and has become Europe’s second-largest software company, right after SAP. What is this service? For example, when a company manufactures a traction motor for high-speed trains, it used to simply sell the motor as-is. Now, while this motor is in operation, it continuously sends data back to the company’s factory, allowing them to know the current operating condition of the motor and determine when maintenance is needed. How did high-speed rail manufacturers do it in the past? It’s a one-size-fits-all approach: a certain time is set, and when that time comes, repairs are carried out regardless of whether they’re necessary or not. It’s no different from routine car maintenance. Now there are certain tools that can tell you when repairs are needed and when maintenance is required. If you want to know that, sorry, you have to pay. Another example: once smart products are in use, each car will continuously collect data on its surroundings to determine its route. The entire transportation system will become fully service-based, and no one will need to own a car anymore. Perhaps one day driving a car itself will become an illegal act, because the devices are intelligent, while humans are uncontrollable. At this stage, all manufacturers will transform into service providers. ▲The fourth realm of Industry 4.0: cloud factories. As the integration of digital and industrial technologies in factories advances further, another new business model begins to emerge, namely the cloud factory. The equipment in factories is now also intelligent; they continuously collect their data and upload it to the industrial Internet. This allows us to see which factories and which production lines are operating at full capacity, while those that are idle. So these factories with idle capacity can sell their production capacity to carry out manufacturing for those in need. The Internet industry has developed so rapidly because entrepreneurs only need to focus on innovating their products and business models. They don’t have to purchase servers themselves; instead, they can simply rent cloud-based services. Currently, industrial entrepreneurs still struggle with deciding whether to use OEM manufacturers or build their own factories, which greatly limits innovation in the industrial sector. When Cloud Factory becomes a reality, I predict that there will be an wave of innovation and entrepreneurship in China’s industrial sector—one that is over a hundred times larger than the Internet boom. At that time, everything in society will be profoundly transformed. The reason why Brother Rabbit is determined to engage in investment and entrepreneurship services in the industrial Internet sector is that he is waiting for this opportunity. I hope I am a forefather, not a martyr. Even if one is a martyr, that’s fine; we have a high level of ideological awareness, we are pure people, people who are free from vulgar interests... (The lengthy explanation is omitted here; just grasp the essence.) ▲The fifth level of Industry 4.0: cross-sectoral attacks. The internet industry constantly talks about using innovative approaches to challenge traditional industries – companies like Google, Xiaomi, Alibaba, and LeEco. But let me tell you that when Industry 4.0 reaches its fifth stage, the cross-sectoral challenges posed by industrial enterprises will be a hundred times more intense than those posed by these internet companies. This process will fundamentally shake the foundations of modern economics and management, reshaping the entire business world. For example, consider a manufacturer of watches that stays in contact with your body throughout the day, collecting various data about your body. While this data may be of little use to the watch manufacturer, it represents a valuable asset for insurance companies. In such a case, the watch manufacturer can transform itself into one of the best insurance companies. When automation and informatization merge deeply, cross-sector competition will become the norm, and all business models will be reshaped. ▲Industrial 4.0: a complete success, The Matrix. The entire Industrial 4.0 process is one of continuous integration of automation and informatization, as well as a process of redefining the world through software. In the future, the multiverse will become a reality in the virtual world, with one real world corresponding to countless virtual worlds. If the real world changes, the virtual world will change as well ； If the virtual world changes, the real world will change as well. Everything is under precise control based on data; most of human physical and mental labor will be replaced by machines and artificial intelligence, and all current economic principles will become irrelevant. But there are some things that never change, I believe. Humanity’s love, responsibility, courage, longing for the future and freedom, and endless striving. It goes on forever.