Siemens lights the way to Industry 4.0

As Industry 4.0 sweeps the globe, firms who do not embrace the new paradigm will fall behind

Martin Hoppe, first counselor of Economic Co-operation and Development at the German Embassy in Vietnam, was pleased with the Siemens solutions showcased at the “Digital enterprise – on the way to Industry 4.0” conference in Hanoi last week.

“I am happy that Siemens has presented us with their ideas of what Industry 4.0 can do. Trust me, I am very curious myself,” Hoppe said.

The event was organised by Vietnam’s Ministry of Industry and Trade (MoIT), the German Embassy in Vietnam, Siemens, and German Industry and Commerce Vietnam. Nearly 200 people attended the event, including senior government policy and decision-makers, business leaders, and industry specialists.

“Digital changes everything,” Raimund Klein, executive vice president of Digital Factory and Process Industry and Drive of Siemens Asia, said during his presentation.

Digital can have a remarkable impact on life, travel, communication, and markets. In the long-term, enterprises will likely face woes if they fail to embrace digital. “That will present fierce competition,” Klein said, referring to the rise of Industry 4.0.

According to Hoppe, Industry 4.0 is another development that will have a profound effect on all people’s lives.

What is Industry 4.0?

Nguyen Phu Cuong, head of the Science and Technology Department in the MoIT, notes that Industry 4.0 or “The Fourth Industrial Revolution” is becoming a popular buzzword around the globe.

Together with rapid development and the high-level integration of science and modern technology in the digitalisation, bio-technology, and physics sectors, Industry 4.0 is expected to change the face of manufacturing worldwide.

“The core of this revolution is smart manufacturing plants. This model will help enterprises increase their productivity, flexibility, and efficiency, as well as shortening products’ time to market. Overall, this will result in improved competitiveness,” Cuong said. “Consumers can also benefit from higher quality products at more reasonable prices,” he added.

Germany is seen as a pioneer in initiating Industry 4.0. In 2011, Germany launched discussions on Industry 4.0 and coined the term “Smart Factory”.

In 2012, Germany officially introduced Industry 4.0 in its national action plan on high-tech development, together with the implementation of many new projects. As a result, the “smart factory” models were quickly developed in Germany.

The Siemens’ Amberg Electronic Plant in Germany was one the first facilities to adopt the digital factory model – where machines and computers cover up to 75 per cent of the product value chain, and human input is limited to research and development.

Following this success, Siemens developed a second digital factory – the Siemens Electronics Works in Chengdu, China, which was the first Siemens smart factory built abroad.

“In short, the success of the German government and its enterprises, including Siemens, will bring valuable experience to other countries and their business communities,” Cuong said.

Opportunities for firms

According to the MoIT, Industry 4.0 is expected to bring opportunities for improving technology, enhancing productivity and competitiveness within the value chain, and creating substantial changes in business and service modalities.

Industry 4.0 also provides more opportunities for startups by helping reduce transactional and delivery costs, creating attractive investment opportunities in digital technology and the internet, and presenting major opportunities for industrial manufacturing with advanced scientific and technological achievements.

According to Siemens, under Industry 4.0, billions of machines, systems, and sensors worldwide will communicate directly with each other and share information. Companies, especially those in the manufacturing and processing industries, will benefit from increased productivity, flexibility, and shorter times to market, thereby increasing their competitiveness. Their customers will also benefit from more personalised high-quality products. End users will be able to order their very own merchandise, tailored to their needs.

Pham Thai Lai, Siemens Vietnam president and CEO, said Siemens calls its approach to Industry 4.0 ‘Digital Enterprise’. With Digital Enterprise, Siemens offers solutions to address the specific requirements of the manufacturing and processing industries. These solutions combine the world of planning and operation to create an integral plant management concept, covering the entire lifecycle of an industrial plant.

“The path to the Digital Enterprise is comprised of four core elements that logically build on one another. These four core elements are our software, our industrial communication networks, our security in automation, and our business-specific industrial services. Each of these core elements is comprised of a unique portfolio that prepares our customers for Industry 4.0,” Lai said.

For example, Siemens provides the Digital Enterprise Software Suite – a comprehensive portfolio of software systems for discrete industries. Built up over more than 15 years, it is based on Teamcenter as a collaborative platform (data backbone), integrating PLM (Product Lifecycle Management), MES/MOM (Manufacturing Execution System/Manufacturing Operations Management), and TIA (Totally Integrated Automation).

“Vietnamese customers are not alone on the way to Industry 4.0. They can count on Siemens,” Lai stressed, adding that Siemens has been deploying digital solutions since the late 1990s, and has invested billions of dollars in developing their capabilities.

“My specific advice for those Vietnamese enterprises that are determined to digitalise in the future is that digitalisation starts at the shop-floor. The path of change must be based on progressive evolution, commencing with small pilot projects that are implemented step-by-step in reasonable doses that can be coped with during plant operation,” Lai said.

According to Lai, the first step is to ensure production data transparency before going further on the journey of digitalisation. With Siemens’ TIA platform, the firm’s Vietnamese customers will be fully prepared for their next steps, and Siemens is offering a “gateway” to that next level.

Truong Gia Binh, chairman of local telco giant FPT, told the conference that he highly commends Siemens’ digital solutions.

“We have signed with Siemens on projects focused on training courses related to Siemens’ solutions like MindSphere,” Binh said, revealing that the courses are expected to draw about 1,000 digital experts.

MindSphere is the open, cloud-based Internet of Things operating system from Siemens that lets enterprises connect their machines and physical infrastructure to the digital world. It lets enterprises harness big data from billions of intelligent devices, enabling enterprises to uncover transformational insights across the entire business.

“Moreover, MindSphere provides customers and developers with the capability to develop applications and digital services, apply them, and then make them available to other users. In this way, totally new services and business models are possible,” Lai said.

Also highlighting Siemens as an exemplary model in digital solutions, Marko Walde, chief representative of AHK Vietnam and chairman of GBA Vietnam, suggested that “to take advantage of Industry 4.0, Vietnam needs to motivate enterprises by creating favourable conditions or legal frameworks so they are confident to join the revolution”.

“Networking and technology transfer should be the optimal methods for Vietnamese companies on the path to Industry 4.0,” he said.

In May 2017, the prime minister enacted Directive No. 16/CT-TTg on improving the accessibility of Industry 4.0, which specified the solutions and tasks for ministries, departments, and local authorities to enable a supportive environment for Vietnamese enterprises to access this revolution.