Connected technology, connected world: Social and commercial opportunities
Self-driving cars, products that manufacture themselves and control factories – for a long time this has been the stuff of science fiction. Some of you might remember KITT, the talking car from the TV series Knight Rider, or the intelligent machine-type creatures that appeared in the movie Matrix Reloaded. Today however, fiction is being outpaced by reality when it comes to developing new technologies mainly through advances relating to the Internet of Things (IoT). But unlike fiction, reality delivers economic and social value: cars that warn one another of potential hazards make our roads safer, and connected factories offer increased flexibility and productivity.
What drives our roughly 306,000 associates worldwide is our “Invented for life” vision. Unlike most other companies, Bosch is ideally positioned to play a key role in the IoT: we are the world’s largest supplier of micromechanical sensors to the automotive industry, and the second largest to the consumer goods industry. By 2015, over 6 billion IP-enabled devices will be connected to the internet, but this can only be a source of additional value for people if the relevant information about these objects is automatically collected and transmitted. What we need is connectivity that delivers value in each relevant domain. And this is where Bosch is taking a decisive step forward: each year, we produce half a billion micromechanical sensors capable of capturing data in real time. The knowledge gained from these data can be applied to generate new business models.
So getting to the bottom line, what does this interconnected future mean for Bosch? As you might expect, we plan to produce IP-enabled devices and systems including everything from heating systems to household appliances and video cameras. Our automotive strength will allow us to improve safety and provide a wider range of services for connected mobility. Our efforts in the energy sector will make it easier to balance power generation and demand more efficiently, and our telemedicine activities are already improving the quality of life of more than 150,000 patients in North America and Germany.
The one thing that Bosch has been doing for more than 125 years is making things. And we know both sides of the business: not only do we manufacture our own products, but as machine and plant engineers we also support our customers in a variety of business sectors including Bosch Rexroth and Bosch Packaging Technology.
With the IoT influencing so many aspects of our daily lives, it comes as no surprise that its effect on manufacturing will be a positive one. In fact, I believe that the IoT will revolutionize industrial manufacturing just as electricity and information technology did. Industry leaders, researchers, and industry associations are already talking about the fourth industrial revolution, or Industry 4.0 as it is called in Germany: by connecting machines, products, workpieces, and different players along the value chain, we are creating intelligent production networks that can control each other autonomously.
But the intention here is not to have production processes that are entirely automated. Instead, it’s about finding ways to increase agility. Putting that into figures, optimizing resource allocation within a more flexible production process can result in a jump in productivity of as much as 30 percent. Our goal is to be able to customize even the smallest unit volumes while retaining optimum productivity, and ultimately leading to achieve optimized multi-variant series production.
I fully expect that connected production will drastically change how established processes are organized. We’re going to see a shift away from centralized control toward decentralized self-organization. And I’m convinced that this shift will provide opportunities for established companies to offer new business models. But they too need to watch out: the IoT is shaking up what until now has been very much a closed market, opening it up for entirely new players such as IT companies. Here, the IoT is not just about connecting objects, machines, and systems. On the contrary, it’s also about how to use the data that this connectivity generates. And instead of using this information only within the plant itself, now everyone along the manufacturing chain can be given access to the data over the internet. Once again, the knowledge gained from these data can be applied to generate new business models.
Predictive maintenance is a good example of a new Industry 4.0 business model: by connecting machines and analyzing their sensor data in real time, faults can be predicted long before they occur. Having such a solution in place allows organizations to offer their customers new and improved levels of service, including a guarantee of reduced downtimes. Our systems and software unit Bosch.IO is currently working on a predictive maintenance solution and is well aware that most industrial customers are concerned about security. There is no doubt that security for protecting sensitive data and managing access control for machines must be airtight. Only when we’ve managed this will industrial customers accept these new business models.
My personal conclusion is that the IoT will drastically improve manufacturing industry’s engineering, production, logistics, and life-cycle management processes. But there are still some challenges left to overcome:
- We know that connected technology is usually complex technology. But this technology must make life and work simpler, not more complex.
- We have to address the arising concerns that there will be no control over autonomous behavior of machines and intelligent objects and concentrate on ensuring that communication among people, machines, and products works as naturally as it does in a social network.
I am convinced that we won’t ever see a time when we have fully automated factories completely devoid of human beings. Manufacturing will continue to follow the pace we as people set.