17.11.2015

Industry 4.0 Sets Estonian Companies Off Towards “The Internet of Things”

The German engineering industry is fully committed to maintaining its leading position in industry as well as manufacturing. Germany was the birthplace of the fourth industrial revolution, or the concept of Industry 4.0, which integrates machinery and production in the value chain into one network resulting in a whole new level of production efficiency. What would be the Estonian version of Industry 4.0?

“The advantage of Estonian companies is the environment where we already operate – electronic data exchange is a daily occurrence here. Industry 4.0 adds the need for internal and mutual interaction to the scene we are already accustomed to,” said Tarmo Oja from research and development company Cybernetica AS.

However, the question according to him is how to achieve this with reasonable development and maintenance costs, while meeting security and other requirements in a way that does not lose sight of the main activity of the business? “Companies already use options afforded by x-path in their communication with public authorities. This means that Estonian ICT already has the knowledge, skills and experience needed for regular and secure of information exchange with evidential value. X-path, as a platform, has received support by the state and thus its functioning is guaranteed – what would favor data exchange more? All elements already exist for companies to locate each other’s services, and use those to create new business opportunities,” said Oja.

In addition, the new x-path Version 6 currently under way enables to use the same platform for cross border information exchange – bringing the services of Finland’s KaPa ‘home’. According to Oja, what this means is that the services of Finnish companies will be accessible for the new ideas of Estonian businesses.

The former German Ambassador Christian Matthias Schlaga suggests that Estonia’s ageing and decreasing population means it faces challenges to increase the quality of life here with fewer people and without the benefits of mass production. “Estonia needs to focus on, and become extremely good at, small-scale production and manufacture specialized products or parts.”

Schlaga observes that in recent years Estonian companies have become more innovative, many have realized that in order to stay competitive it is important to review production processes and focus on product development. On the other hand, compared to industrialized countries, the proportion of Estonia’s workforce engaged industrial sector is still relatively high while productivity remains low.

“The general standard of living and income can only be increased through improvements in the value chain: to make more expensive high-quality products that are able to compete in the export markets. Competitive products are the prerequisite for entering international markets and being successful,” the ambassador noted in an interview with the magazine TööstusEST. He added that in Germany there is talk of increasing efficiency and competitiveness as a result of Industry 4.0, which is only made possible by renewal of manufacturing processes. “Industry 4.0 could offer similar benefits to Estonia: in order to remain competitive it is critical to observe what is happening in other countries and consider how these concepts could be integrated in the Estonian business models and manufacturing processes.”

Schlaga also emphasizes the importance of language skills when considering the German market, adding that while contacts can be established in English, the working language of major groups is German, and language skills would offer a definite competitive advantage for long-term collaboration. “Twenty years from now we will live in a totally different world – many every-day things will be automated with the help of computers. Industry 4.0 will hopefully help Estonia to go along with this process,” the ambassador noted.

The CEO of Bosch Software Innovations GmbH Rainer Kallenbach predicts a major shake-up for production companies as a result of Industry 4.0, because the planning process for each product needs to consider how it would work when combined with the Internet.

According to Kallenbach, the Internet changes the nature of things and Bosch is continually developing new IT-based services in order to make its products smarter and more powerful. He gives the example of electric cars that require charging at stations. However, in the context of Industry 4.0 it must be considered what kind ICT based services could be added to the charging stations to improve user experience: for example, smart phone apps showing the location of the nearest charging station and using mobile phones to pay for the charging service.

 If you are more interested in Industry 4.0, the international conference “Industry 4.0 in Practice” is organized on June 2, 2016 in Estonia. Find more information here.

Source: e-Estonia.com