status report industry 4 · industry 4.0 (i4.0) is a commonly used term, but it is rarely...

Status report Industry 4.0

Sacha Michel, Louis Dalpra, Thomas Wagner, Patrick Llerena, PhilippNenninger

Contents1 Definition 1

1.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2 History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.2.1 First introduction of Industry 4.0 in Germany . . . . . . . . . . . 11.2.2 Introduction in France and Switzerland . . . . . . . . . . . . . . . 21.2.3 National goals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

1.3 Meaning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.3.1 Internet of Things . . . . . . . . . . . . . . . . . . . . . . . . . . . 41.3.2 Industry 4.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

1.4 Overall strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.4.1 Vision and Goals . . . . . . . . . . . . . . . . . . . . . . . . . . . 51.4.2 Measures/investments and areas of activity . . . . . . . . . . . . . 6

1.5 Structure for Industry 4.0 . . . . . . . . . . . . . . . . . . . . . . . . . . 81.5.1 Reference Architecture Model Industry 4.0 . . . . . . . . . . . . . 81.5.2 Industrial Internet Reference Architecture . . . . . . . . . . . . . 91.5.3 Industry 4.0-Component . . . . . . . . . . . . . . . . . . . . . . . 11

1.6 Example application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111.6.1 Fictitious company FiveBike . . . . . . . . . . . . . . . . . . . . . 121.6.2 Digitized service . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141.6.3 Criteria for I4.0-products - Festo service unit combinations . . . . 14

2 Economical & Social Aspects - A Literature Review 172.1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172.2 Implications of Industry 4.0 for firms . . . . . . . . . . . . . . . . . . . . 18

2.2.1 Implementation of Industry 4.0 paradigm in the firm . . . . . . . 192.2.2 Geographical environment for Industry 4.0 firms . . . . . . . . . . 24

2.3 Implications of Industry 4.0 for Customers . . . . . . . . . . . . . . . . . 252.3.1 Industry 4.0 provides a better comprehension of customers’ demand 252.3.2 Customers are the heart of Industry 4.0 . . . . . . . . . . . . . . . 282.3.3 Industry 4.0 as a vector of social stability and economic sustainability 31

2.4 Implications of Industry 4.0 for workers . . . . . . . . . . . . . . . . . . . 332.5 Implications for central authorities . . . . . . . . . . . . . . . . . . . . . 36

2.5.1 Industrial policy . . . . . . . . . . . . . . . . . . . . . . . . . . . 362.5.2 Educational policy . . . . . . . . . . . . . . . . . . . . . . . . . . 402.5.3 Ecological implications . . . . . . . . . . . . . . . . . . . . . . . . 41

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2.5.4 Incentives to enter Industry 4.0 . . . . . . . . . . . . . . . . . . . 422.6 Concluding remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

3 Technical Aspects 473.1 MQTT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

3.1.1 Publish/subscribe pattern . . . . . . . . . . . . . . . . . . . . . . 473.1.2 Topics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 483.1.3 Further features and functionalities . . . . . . . . . . . . . . . . . 493.1.4 MQTT 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 503.1.5 Alternatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55List of Figures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63List of Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64

1 Definition

1.1 IntroductionIndustry 4.0 (I4.0) is a commonly used term, but it is rarely understood uniformly.

In the context of I4.0 a lot of buzzwords like IoT/IIoT, Smart Factories, CPS, Work4.0, Big Data or Digitization are used, which are just as obscure. Whoever starts toget familiar with the concept will primarily encounter various programs and initiativesin research. Some equipment suppliers provide a few solutions as products or services,but those are rarely seen in actual, non-research, use. There are only a few small ormedium-sized enterpises (SME), which are said to be the main beneficiaries that try toadapt such products and services in small R&D projects. This approach is only able todemonstrate very limited aspects of I4.0.

• Is I4.0 just a hype?

• What is the appeal?

• Is a fear of falling behind rational?

• Where to start?

• Shouldn’t there be Industry 3 before I4.0?

This report will try to resolve uncertainties and provide realistic future prospects forSME.

1.2 History1.2.1 First introduction of Industry 4.0 in GermanyThe term “Industrie 4.0” was first used in 2011 by Henning Kagermann, Wolf-Dieter

Lukas and Wolfgang Wahlster during the Hannover Messe [1]. It was used as a project’stitle, which was part of the German Federal Government’s “Hightech strategy”. Theexpression is based on the idea of an upcoming fourth industrial revolution.

• Driven by steam and water power the first industrial revolution occurred around1750 enabling new mechanized factory systems.

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Industry 1:1750 - Mechanization

Industry 2:1870 - Electrification

Industry 3:1960 - Automation

Industry 4.0:today - Digitization

Figure 1.1: Industrial revolution

• The second industrial revolution began with electricity. Electrification enabledmass productions in 1870.

• New information and communications technology made it possible to automateindustries in 1960 [2].

• The fourth industrial revolution is supposed to use Cyber Physical Systems (CPS)to digitize industrial enterprises [3].

By using a numbering scheme familiar to the one used to tag software versions, 4.0instead of just 4, emphasis it put on the computer science based approach and possiblemultiple iterations. The project “Industrie 4.0” ended in 2013 when an implementationstrategy was presented by the German research union and Deutschen Akademie derTechnikwissenschaften (acatech) during the Hannover Messer [3].In 2013 the project was then continued by BITKOM, VDMA and ZVEI. A research

network named “Plattform Industrie 4.0” (figure 1.2(a)) was founded. A few membersof the research group, who were part of the initial project, got part of this networktoo [4]. Further the “Allianz Industrie 4.0” was founded to support SME especially inBaden-Württemberg. Baden-Württemberg has a lot of potential in respect of I4.0 as ithouses big parts of Germany’s automotive and automation industry while also being thelocation for various research institutions.

1.2.2 Introduction in France and SwitzerlandIn 2013 the program “La Nouvelle France Industrielle” came up in France and even-

tually lead to the project “Industrie du futur” in 2015 [5]. This project is the French

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(a) Plattform Industrie 4.0 (b) Industrie 2025

(c) Alliance Industrie du Futur

Figure 1.2: Industry 4.0 Projects and programs

counterpart to the German “Industrie 4.0”. In parallel to the German Plattform In-dustrie 4.0 the Alliance Industrie du Futur (AIDF) was founded in France in 2015 [6](figure 1.2(c)). The two networks work in cooperation with each other.Switzerland started an initiative in 2016 to also support future industry development

in respect to the I4.0 topic called “Industrie 2025” (figure 1.2(b)).

1.2.3 National goalsAccording to the implementation strategy by the German research union main goal

of the fourth industrial revolution should be to reinforce Germany’s position as globalleader in the equipment suppling industry [3]. The suppliers should concentrate ondeveloping and selling new solutions and products, which enable factory Digitization forI4.0. Germany’s industry should also use those products in their own productions todigitize those. Switzerland pursues a similar approach but with the main goal to improveinnovation and development Know-how. It should be used to tap into new markets [7].New markets will secure jobs and strengthen Switzerland’s global position. The AIDFin France aims to also improve innovation and development Know-how in the industrybut also support investments in new technology [6].

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1.3 Meaning1.3.1 Internet of Things

The Internet of Things (IoT) is what we get when we connect Things, whichare not operated by humans, to the Internet [8].

To break down this cite:

• To connect Things communication protocols and communication patters are neededthat fit the concept of IoT.

• Things relates to all things that could be connected like sensors, actuators, con-trollers and other types of devices.

• Not operated by humans excludes e.g. smartphones or laptops (which are “already”connected). It is meant to put emphasis on the autonomy of devices includingprovisioning, delegation of trust, automatic decision making and discovery.

• The Internet stands for the network to which most digital devices operated byhumans are already connected. Things connected to the Internet allow accessfrom anywhere. It also implies scalability, global identity and security.

1.3.2 Industry 4.0While the technological main driving force of the third revolution were electronics,

computers and automation the main force of I4.0 is the Internet and networking. Mostsources agree; key aspect of I4.0 is the introduction of IoT to the industry.This exposes the first issue. To be able to embed “things” into the Internet some form

of computer or microcontroller is needed. Some industry sectors are equipped better,some worse. As the introduction of such electronics was the main driver of the thirdindustrial revolution, it is a necessary foundation for the fourth. It has to be possible toconnect Machinery and computers to the Internet. Analog processes have to be mappedto digital, computeraided workflows (see [9]). Some of the steps towards the idea of I4.0cannot be clearly categorized as part of the third or fourth industrial revolution, buttheir necessity is undoubted by all implementation approaches and strategies.2013’s implementation recommendation [3] explains that machinery, storage systems

and operating equipment have to become CPS to accomplish Digitization for I4.0. Plat-tform Industrie 4.0’s implementation strategy from 2015 substantiate that [10]. Humans,objects and systems need to be represented physically and digital. It is only possible toconnect all parts of the value chain if relevant information is available digitally. A fullydigitized and interconnected value chain is able to dynamically organize and optimizeitself. This is the foundation for more complex possibilities and approaches to I4.0. Forexample could a dynamic and automated optimization of machinery and storage lead

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to cost reduction, high availability and a more environmentally friendly/resource-savingproduction. A self-organizing production is also able to achieve smaller lot sizes effi-ciently. The buzzword here is “lot size 1”; a production that is able to organize itself toproduce individualized products with lot sizes as small as one without losing efficiency.Those two aspects summarize, according to Plattform Industrie 4.0 and the Industrial

Internet Consortium (IIC), the general idea of I4.0. A foundation of interconnectedCPS in the whole value chains needs to be achieved to then use it to realize ideas like:optimizing the value chain softwareaided or fully automated and achieve small effectivelot sizes.

“Make things work smartly” [11] A first common goal towards I4.0 is to equip allelements of the value chain with a digital interface. Today there are already purelydigital components, which offer such an interface by default, but most parts of thevalue chain only have a physical representation. Those ones need to be adapted andoutfitted with a digital representation. Physical and digital representations need to betied together, CPS, than they can be outfitted with an interface. If this goal is reached,optimally every component of the value chain will be able to talk to the others and theywill understand each other.

“Make things smartly” [11] In enterprises that have not yet adapted information tech-nology in a broader spectrum the first step might already offer advantages like shortenedand more unified processes and workflows. Other enterprises might already have adaptedto such digitized workflows before the term Industry 4.0 came up. Those can now startto think about further benefits and use cases. Commonly known ideas like online dash-boards to control factory facilities status, predict maintenance by monitoring machinery,highly computeraided and automated order and human resource management. Compa-nies that start to adapt I4.0 ideas will find all different kinds of practical uses, whichmay be specific for their industry.

1.4 Overall strategyThis chapter will further discuss the direction and strategy of I4.0. It will provide

general approaches and goals.

1.4.1 Vision and GoalsConcrete goals that can be reached today or in the future, are discussed by various

publications. Plattform Industrie 4.0, Industrie 2025 and AIDF each offer examples andexplanations. Apart from that those are also publications to smaller topics and projectsand even a few case studies (see chapter 1.6). As I4.0 spans various industries and

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company sizes, examples are mostly quiet specific but can give an inspiration. Despitethe diversity a few common keypoint can be found and summarized.One, if not the most, mentioned keypoint is the flexibility of production infrastructure.

More flexibility and less need trade-offs enable an optimized decision-making. The visionalso includes the idea of high customizability based on the productions flexibility. Aproduction that is able to dynamically adapt and produce customized products enablesa company to offer customer-specific products without additional costs. Such a dynamicproduction could produce individual products while also being more resource efficientand environmental friendly.A digitized company with digitized factories can also develop new business models.

Those could be based on digitized services like automatically notifying service personnelor offering remote support.Thanks to new software running on connected digital workspaces employees will be

supported. A modern workplace eases daily tasks and helps automating repetitive tasks.Unified and softwareaided processes that an employee can use are convenient for himwhile also lowering administrative expenses. I4.0 will change what, how, where and howmuch we will work. AIDF focuses on such benefits in working environments calling it:“plants for people”. Plattform Industrie 4.0 describes how to use the potential of a betterWork-Life-Balance and examines a similar field about befits for employees that way.Concluding this topic it is important to stress again that most ideas, especially more

concrete ones, are quiet specific. Each enterprise has to classify and rank I4.0-visionsand -goals for itself. Support can be found looking for other companies that already haveadapted I4.0 concepts and offer the possibility to use them as a “beacon”. Many externalagents start to offer suitable support too. It can also be beneficial to find employees indifferent department that are interested in the I4.0 topic and can offer company- anddepartment-specific ideas and help to sketch goals.

1.4.2 Measures/investments and areas of activityIn order to let this vision become reality the three initiatives provided thoughts to

activities, investments and fields of research and action. Based on the central pointsmentioned by Industrie 2025 the thoughts of all three initiatives will be ordered:

Promote Digitization Prerequisite for interconnected components is a uniform digitalinterface. Foundations for autonomous communications are already present in someform and on some devices while others have to be retrofitted with those technologies [12].Difficulties will arise if the network infrastructure is lacking the performance and storageto handle the increasing volume of data [10]. Cloud-Computing will be needed in theinfrastructure of even smaller companies.

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Promote linkage in production processes Factories, production lines and workspaceshave to be networked. Interfaces and protocols have to be standardized. The IndustrialInternet of Things has to be introduced in companies, while also Machine-to-Machinecommunication (M2M) is needed. Both concepts are quiet similar but extend each other.Most companies are already using networks to connect workstations, laptops and mobilephones but mostly only for office workers, sales- and service-workers. The shopfloor isa blindspot. Interconnected digitized machinery and shopfloor logistics (M2M) expanda companies network of “things” to a Industrial Internet of Things (IIoT). A decentral-ized network spanning the whole value chain needs to be established. Difficulties thatmay arise due to different requirements like safety, security and realtime operation orbandwidth/throughput have to be solved [10]. To further expand the network suppliersand customers or external server centers have to be connected to each other, calling foran improved broadband infrastructure.

Use collected data The rising amount of data can be collected to gain new insightsabout complex processes and systems. Those insights can be used to improve or evenautomate decision-making. Statistics and trends can be extracted out of those datapools. They can be used to plan machine usage and assignments, monitor downtime,retooling and maintenance. Quiet similar to machinery the data can be used to planemployee assignments by work hours, vacation and skill. This can improve work organi-zation and structure. Following those concepts will lead to a more predictable productionthat is able to react precisely if conditions change. Plattform Industrie 4.0 has basedtheir concept of an administration shell on this need for a uniform understanding ofinterconnectivity and data [10].

Link all processes, concept stage to final disposal This topic combines a few alreadymentioned fields. It should be pointed out that digital connectivity needs to be achievesin networks not only along one axis. The whole lifecycle needs to be digitized and thevalue chain needs to be network along the horizontal and vertical axis. This network isthe base for a dynamic, flexible and resource efficient production. New services can beprovided on that basis using newly developed business models. The already mentionedconcept of an administration shell attempts to formalize communication, interface anddata for each asset in I4.0-communication and -networks. Chapter 1.5.3 further explainsthis concept.

A few topics that also need to be discussed and researched but are less often mentioned,shouldn’t be missing here. They are still crucial for I4.0 and Digitization. Collectingand sending data, probably even sensitive data containing a companie’s expertise, willbe sent over the Internet. Thinking about security is vital. Security and safety can bothbe at stake if machinery could be controller via the Internet by an unauthorized person.

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Legal frameworks have to be audited and adapted to protect data but also not to hindernecessary data exchange. Liability issues could rise if everything is connected.

1.5 Structure for Industry 4.0The various programs and projects have encountered and described the same problem;

a lack of a consisted structure and vocabulary for I4.0. This lead to the development ofseparate abstracts models and architectural descriptions for I4.0.

1.5.1 Reference Architecture Model Industry 4.0

Figure 1.3: RAMI 4.0 (Source: Plattform Industrie 4.0)

Plattform Industrie 4.0’s work group “Reference architecture, standards and norms”developed, in cooperation with Bosch Rexroth, the Reference Architecture Model In-dustry 4.0 (RAMI 4.0). It was published in 2015 [13]. This three-dimensional model(figure 1.3) is supposed to be a tool for classifying products, solutions and use cases inregards to the overall structure of I4.0.Along the model’s vertical axis it is split up into “Layer”. Those layers organize

different kinds of informations that describe the I4.0 component from varied viewpoints.For example, the Business layer might describe a products costs and possible vendors.A product’s manual would be part of the Functional and, depending on the product,

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Integration layer. Looking towards I4.0 there will also be something that describes aproducts communication capabilities and something that digitally provides informationabout the product. One of the horizontal axes “Life Cycle & Value Stream” presents away to classify concepts, ideas or products based on the section of the life cycle they areuseful for. The second horizontal axis “Hierarchy Levels” categorizes hierarchy. Usingall three axes it is now possible to clearly categorize for what a specific idea, conceptor product could/should be used. For example, a tool that provides insight on whena machine might fail and therefore when it should undergo maintenance. This toolwill have to tap into the communication structure and read information the machineprovides. It will then present business insight on possible downtimes. It will be mostuseful during the maintenance/usage phase of one instance, one machine. Looking atthe “Hierarchy Levels” such a tool will be helpful on the “Work Center” level wheremaintenance of single machines is be planned.Just like in this example the RAMI 4.0 can be used, to classify already known norms,

solutions, use cases, products and standards. It provides a basis for clear communication.Mapping such technologies in the RAMI 4.0 can help to identify spots where technologyis still missing and spots where different solutions overlap. In regions of the model witha lot of overlapping problems could arise as the /acI40 goal to connect everything cannotbe achieved with incompatible technologies. Common ground has to be found to enablea fast, effective and lean production with communication across enterprise borders.

1.5.2 Industrial Internet Reference ArchitectureIn parallel and independent of the development of RAMI 4.0 the IIC has developed

a reference architecture and published it in 2015. The so-called Industrial InternetReference Architecture (IIRA) includes an unified vocabulary and the Industrial InternetArchitecture Framework (IIAF). This framework is supposed to standardize viewpointsand concerns during development, documentation and communication in the context ofI4.0 and the IIRA [14]. An idea quiet similar to the one Plattform Industrie 4.0 basedRAMI 4.0 on. In 2017, a report was published as both cooperating institutions decidedto try to align bith reference architectures [11].Figure 1.4 shows a graphical representation of the viewpoints considerer in the IIRA.

Comparing that figure to the RAMI 4.0 those viewpoints align to the layers in RAMI 4.0.While RAMI 4.0’s layers are more split up the IIC’s approach is more universal. TheIIRA additionally marks the direction of guidance and validation between the namedviewpoints. Also the RAMI 4.0’s life cycle axis matches the IIRA’s one. In contrast tothe layers and viewpoints the life cycle axis is more precise in the latter. The third axisof the IIRA marks the biggest difference to the RAMI 4.0. Along this axis the model issplit up into the different industrial sectors. All those differences mark clearly that theIIRA is supposed to be used in a broader spectrum of businesses (e.g. energy, medicineand pharmacy, public services and (public) transportation) while RAMI 4.0 focuses onproducing industries. The RAMI 4.0 could therefore be used as are more detailed subset

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Figure 1.4: Viewpoints, Applications Scope and Lifecycle Process of IIRA (Source: IIC)

of the IIRA. This also matches the institutions motivations. Plattform Industrie 4.0is concerned about the development and guidance of I4.0 while the IIC focuses on thebroader goal of standardizing IoT and IIoT.In the report, which compares RAMI 4.0 and IIRA, is another figure. Figure 1.5 pro-

vides another good example on how to use RAMI 4.0. OPC UA as a communicationstandard that is built for I4.0 and M2M can be classified using RAMI 4.0’s communica-tion layer. To classify the technology more detailed, the communication layer is furtherdivided into the layers of the known ISO/OSI model. The figure shows, how the commu-nication layer is manly based off of commonly known protocols like IP, Ethernet, WiFiand 4G but will also use new technologies like TSN and 5G. Based on those ISO/OSIlayers OPC-UA is used as protocol in the ISO/OSI layers 5,6 and 7. It is most useful inproduction and usage, not so much during the development and prototyping phase of aproduct. OPC-UA is also only scalable to the level of a work center and therefore isn’tsuited for communication on enterprise or “Connected World” hierarchy levels.

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Figure 1.5: RAMI 4.0 Communication Layer (Source: IIC)

1.5.3 Industry 4.0-ComponentAnother concept that is a result of the standardizing work of Plattform Industrie 4.0

is the “Industry 4.0-Componen” [15]. To build the networked base for an interconnecteddigitized value chain it is crucial that all assets and components can pass informationfrom and to each other. Previous chapters already mentioned the idea of an adminis-tration shell. The concept of an administration shell describes the interface, which eachcomponent offers to enable the physical asset to be part of an I4.0 network. A shell itselfcontains a digital copy of the physical object. Physical object and administration shellcombined result in a CPS. Assets like drilling machines or tool trolleys can be mappedto administration shells just like individual employees, fleet vehicles and inventory can.Using its shell an asset must be able to provide information (static and dynamic) aboutitself in the network it is connected to. E.g., a full shell must be able to notify thenetwork about its need to be emptied. Based on the type of network used, the shells ofthe next free forklift truck can react by reserving it and a free logistics employee can benotified as his shell reacts.

1.6 Example applicationChapter 1.4.1 already touched the critical aspect of there being not “one” Industry

4.0 in different enterprises [16]. Not every company has adapted Digitization to thesame extend and the possibilities to achieve Digitization and profit from it are various.Original Equipment Manufacturers (OEMs), Start-ups and Digitization champions haveto join the discussion just as latecomers have to. Diverse application fields can be

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derived from different industry sectors and therefore challenge a uniform way of I4.0.This chapter will provide a few fictitious and real examples on how I4.0 can look like invarious situations.

1.6.1 Fictitious company FiveBike [16]The fictitious digitized company FiveBike produces electric bicycles. Internal systems

record and process all parts of the value chain like construction, assembly planning andcontracts as well as assembly control digitally. This high level of Digitization allows foroptimal internal networking and digital interfaces towards customers, contractors andsuppliers. It is thus possible to achieve a high level of self-organization and automation,while it is also enables a exchange of order, product and production data between theparties involved. FiveBike is mainly an assembly company and therefore a reliablenetwork of suppliers (tires, bearings, screws, spokes, etc.) and contractors (motors,frames, etc.) is important, to guarantee quick delivery times. Customers can be endusers, which use a web service to order individual configured bicycles. FiveBike alsoproduces standard models in higher quantities for distributors. A third business modelis about suppling major customers. They can also the web service to order individualbikes or use traditional sales contacts. Compared to end customers they order in largerbatches (lot size > 10).Industry 4.0 is mainly adapted by FiveBike through their order-driven production.

In-house, this influences above all:

• The order management automatically accepts orders from customers and placesorders with suppliers and contractors. Contracts must be suitably negotiated andoptimized to support such an automation.

• Development and construction must design bicycles with respect to the mod-ular customizable aspects. The bicycles also have to be constructed in a way thatsupports automation in the assembly process.

• Controlling has to be interconnected with order management to automaticallyprocess cash flows and invoices.

• Intralogistics, represented by the IT department and IT development. In anon-order-driven production the second would probably not exist, while it is manda-tory in this example to have experts developing and maintaining complex softwareservices and applications.

• Operational Control and Planning must adapt to the digital and automatedprocesses, especially with regards to personnel management (personnel has to befamiliar with digital workflows or has to be trained).

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Assembly, sales, purchasing and marketing are not not influenced that much. Shipping,service and human resources management are also less affected.A centralized control system is at the heart of operational order management. Trig-

gered by an order, it checks the necessary parts and, accordingly, checks suppliers toorder parts if necessary. The system then creates a schedule based on the estimateddates of delivery and the amount of available assembly workers. A precise completiondate can then be provided to the customer. This system means that standard ordersdon’t have to be managed by an employee anymore. The employee’s task instead is toelaborate and continuously renegotiate contracts with suppliers and contractors to allowfor such an automatic order management. He is also responsible to monitor the auto-mated processes while communicating errors or suggestions for improvement to technicalorder managers, software developers and assembly workers. Commercial and technicalorder managers discuss their respective orders on a daily basis. Software tools supportthem, providing a detailed insight using data and statistics from the central control sys-tem. The digital insight view enables those jobs to be highly flexible. Monitoring andplanning can be done, given the right equipment, from anywhere at any time. FiveBikedistinguishes between standard and special orders. The later need more intervention bythe respective order manager if special parts have to be ordered from new suppliers.As soon as a new combination gets available, the configurator has to be updated.

Construction and development engineers get assisted by a system that matches config-urations, frame measurements and positions for various components. The system alsochecks requirements for quality characteristics and assembly possibilities. During produc-tion and assembly of prototypes product developers have to communicate with suppliersand assembly workers. This communications ensures that any changes to processes, sup-ply chains and intralogistics can be considered in an early stage. Those responsible inthe IT department and development can then adapt the software tools and systems tothe changes before the new combination is officially unlocked in the online configurator.Assembly workers do the assembly for individual orders at FiveBike. Assembly is done

in pairs, working in “boxes” that story parts and tools. Electronic working instructionsthat show the current configuration to be build on e.g. a smartphone or tablet are pro-vided to the workers. A self-organized logistics system uses Kanban-cards and selfdrivingtransport devices to enable “condensed” labor. A highly automated production line as-sembles orders that contain larger quantities. This production line is interconnected andable to reconfigure itself to adapt to the bicycles configuration it has to assemble.

The given example ends in a conclusion that emphasizes that most current core compe-tences will still be needed in the future, but those core competences will be additionallyextended by the need for new skills like:

• System competence, an understanding for interconnected intelligent systems

• Process knowledge about the cooperation between physical and digital processesin CPS

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• Interdisciplinary work and learning, especially in the area of technical systemsin the fields of IT, electrical engineering and mechanics, is expected of all employees

• Competences for cooperation, communication and organization are justas important as those in the fields on technical systems. Employees and executiveshave to be “connected” to each other in the same way the digital system is.

• Self-responsibility and self-organized work are especially important whenworking with intelligent systems

• decentralized processes, which are required by I4.0, call for a new understandingof leadership

1.6.2 Digitized service [17][17] describes the advantages and the implementation of a solution for digitized service

processes. A system is explained that automates and streamlines service processes ofthe Bystronic Group based in Switzerland. All available service technicians are knownto the system with their respective qualifications and skills. As soon as a repair requestis received the system can automatically look for an available technician with the neededskills. He then will be marked as reserved in the system and a notification will be sentto his smartphone. The system is connected to the companies ERP-system so thatan automated check for available spare parts can be conducted. Missing parts can beordered and directly sent to the customer to prevent incorrect delivery. Delivery datesare then used to determine when the service technician should arrive, knowing all spareparts will be available for a successful repair job. Lastly, the system makes sure allnecessary tools are available at said date.During the service visit the technician uses an app on his smartphone or tablet to

report back about his job. All used spare parts, his working hours, used maintenance andrepair protocols and expenses for accommodation and food are recorded digitally. Thisprocedure unifies the flow of organizational processes during deployment of a technician.The needed data is easily available for all other departments (Logistics, HR management,...) and can be archived. Archived data can later be used to draw conclusions about thecustomers situation so that the sales department can adapt his strategy.The digitized process described is also the basis for new business models, e.g. “Pre-

dictive Maintenance”, in the context of I4.0.

1.6.3 Criteria for I4.0-products - Festo service unitcombinations [18] [19]

In [18] Plattform Industrie 4.0 describes a concept for determining the I4.0 suitabilityof products. The used criteria are based on concepts from RAMI 4.0 (see 1.5.1). An

14

1 Definition

example is given that uses the concept to evaluate a real product, a service unit combi-nation from FESTO; MSE6-E2M [19]. This product combines the typical functions of aservice unit with additional sensors to measure pressure and flow, internal data record-ing and processing, a stop valve and various communication interfaces (e.g. Ethernet).The unit can differentiate between different operating states using Machine-Learning orfixed thresholds. Detecting those states enables the unit to automatically monitor itselfand operate energy efficient as it can close the stop valve if it detects an idle state.The goal of Plattform Industrie 4.0 is to establish a standardized concepts to back up

labels like “I4.0-read”, “Sensors I4.0” or “IoT Ready”. Seven criteria should be evaluatedtwo times; once for the early lifecycle phase (RAMI 4.0 - Type) during developmentand once for a later lifecycle phase (RAMI 4.0 - Instance). Further, those criteria arecategorized based on their estimated coverage (C). Those categories are: Mandatory(M), optional/use case specific (O) and not relevant (N).

15

1 Definition

Criterion Requirements L C Product characteristics 2018 Energy efficiency modul

1. Identification Cross-manufacturer identification of the asset with unique identifier (ID) attached to the product, electronically readable.Identification in:1) Development2) Goods transport (logistics), production3) Sales, service, marketing4) Network

T M For 1) material number (electronic) in accordance with ISO 29002-55 or URI

1) Parts number and product key of the manufacturer (electronically) readable

I M For 2) serial number or unique IDFor 3) manufacturer + serial number or unique IDWith 2) and 3) electronically readable, for physical products via 2D code or RFIDFor 4) participant identification via IP network

2) DM code of the manufacturer3) DM code of the manufacturer4) Participant identification via TCP/UDP and IP network

2. I4.0 communication Transfer of product data and data files for interpretation or simulation, for example; product data in standardized form

T M Manufacturer makes data available/accessible online. The data should be relevant to customers and available/accessible with the assistance of identification, e.g. pdf via http(s) and URI

CAD drawings, EPLAN macros, instructions, device description etc.

Product can be addressed via the network, supplies and accepts data, Plug & Produce via I4.0-compliant services.

I M Administration shell of theproduct can be addressed (atany time) with the assistance of the identification online via TCP/UDP&IP with at least the information model from OPC-UA

Yes, sensors and states can be read out. Valve can be controlled for which purpose a control module with OPC-UA application is plugged in.

3. I4.0 semantics Standardized data in the form of features with cross-manufacturer unique identification and syntax for:1) Commercial data2) Catalogue data3) Technical data: mechanics, electronics, functionality, location, performance4) Dynamic data5) Data on the lifecycle of the product instance

T M For 2) catalogue data can be accessed online in an open standard

Yes, via link of the DM code

I M For 2) and 5) catalogue data and data on the lifecycle of the product instance can be accessed online

Yes, via link of the DM code

4. Virtual description Virtual representation in I4.0-compliant semantics Virtual representation across the entire lifecycle. Characteristic attributes of the actual component, information on relationships between the attributes, production and production process-relevant relationships between Industry 4.0 components, formal description of relevant functions of the actual component and its processes.

T M Relevant information for customers can be accessed digitally based on the type identification (product description, catalogue, image, technical features, data sheet, security properties etc.)

Product description, catalogue, image, technical features, data sheet, CAD drawings, EPLAN macros, instructions, device description etc. are available online

I M Digital contact to service andinformation for productsupport including spare partinformation from the fieldpossible

DM code leads directly toservice and offersinformation on spare parts

5. I4.0 Services andstates

Definition still open (service system) T O Digital description of thedevice interface available

Interfaces are describedopenly

General interface for loadableservices and for the reporting ofstates. Necessary basic services thatan I4.0 product must support.

I O Information such as states,error messages, warnings etc.available via OPC-UAinformation model inaccordance with an industrystandard

Data at the interface for allstates are open and availableonline

6. Standard functions Basic standardized functions thatrun on various products regardlessof manufacturer and provide thesame data in the same functions.They serve as the foundation for thefunctionality on which allmanufacturers can build their ownenhancements.

T N Not defined First diagnosis and conditionmonitoring functions

I N Not defined Also monitoring of theprocess with diagnosis output

7. Security Minimum requirements to ensuresecurity functionality.

T M A threat analysis wasconducted. Appropriatesecurity capabilities wereconsidered and publiclydocumented.

Documentation shows thatno security capabilities exist

I M The existing securitycapabilities are documented.Suitably secure identitiesexist.

Documentation shows thatno security capabilities exist

Figure 1.6: Characteristics of the energy efficiency module(Source: Plattform Industrie 4.0)

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2 Economical & Social Aspects - ALiterature Review

2.1 IntroductionIndustry 4.0 can be defined as a new way to organize the production process thanks

to many innovations in internet of things, digitalization, augmented reality, artificialintelligence, etc. This new revolution in industry is based on the smart factory, charac-terized by an interconnection of machinery and systems in the production sites, but alsobetween the production sites, and with external partners such as consumers or suppliers.Industry 4.0 has then become one of the central strategical projects of Germany which

encourages this shift in industry. France also has many actors involved through the “Al-liance Industrie du Futur” which mainly gather firms and academics institutions topromote and accompany French firms into the digitalization and smart factory era. Sim-ilar initiatives are also taking place in the United States, in Japan or in China.

But this great transformation, seen as a strategic goal for countries and firms thatwish to remain competitive, will not be accomplished without crucial modificationsin the society. The digitization and automation process inside firms will create manytechnological and managerial challenges as well as important implications for consumers.At a state level, many questions also arise about educational or environmental policies.Finally, one capital matter will involve the labor market, with many low skilled jobsthreatened by automation and new technological advances.The goal of this report is then to give a broad view of the existing literature regard-

ing these topics. First, we will see what has been studied regarding the implicationsof Industry 4.0 for firms. Then how it impacts consumers. The last two parts will bededicated to the implications for workers and for central authorities.

It should be noticed that the whole literature on this subject is fairly recent, withfew articles written before 2015. Nevertheless, we notice a lack of quantitative studieson the subject, whether it is about the evolution of the labor market, or the adoptionof Industry 4.0 defined with clear indicators by firms. The bulk of the literature ismostly about giving guidelines for entering Industry 4.0 or about predicting its effectsat various levels. The main ideas most authors seem to agree on are: Firms will benefitfrom Industry 4.0 with gains in time and costs while the low-skilled workers will lose

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2 Economical & Social Aspects - A Literature Review

their jobs due to automation. This issue on the labor market should be addressed withan evolving educational and training policy.

2.2 Implications of Industry 4.0 for firmsTo start this part on the implications for firms, a paper [20] focuses on giving a broad

view of the benefits and challenges of Industry 4.0 through multiple case studies (n =46), hence by interviewing managers in firms of various sizes and sectors. What appearto be the most important benefice of Industry 4.0 is Competitiveness, the ability fora firm to expand and protect market shares, mainly by innovative offerings. Secondmost occurring benefits concerns cost reduction and enhanced value creation. Thenmanagers quote optimization of process and products, novel business models, resourceefficiency and gains of time. As for the challenges, the most recurrent is said to beabout “technical integration” of the Industry 4.0 paradigms. Implementing intra-firmand inter-firm connection requires a lot of transformations and modernization of theproduction facilities. Companies also fear the implementations of immature technologies,which could harm production. Second most important challenge is the “organizationaltransformation” which implies a corporate culture where every agent is convinced ofthe need to shift to Industry 4.0 methods and paradigms. Managers also cite a lot ofchallenges about data security, competition (increased by Industry 4.0) and cooperation(with suppliers and customers).These are the main opportunities and challenges faced by firms regarding Industry

4.0, and we will give more details about them in the next sections.

Additional to the overview of Kiel et al. [20], Herrmann [21] list several risks of smartfactories:

• Standardization. Industry 4.0 can only be efficient if systems intra-firm and inter-firm are standardized. Failing to do so will harm the benefits of Industry 4.0.

• Information-security. The information security experience in industrial companiescan currently be assessed as rather low. Failing to upgrade could harm the com-panies.

• Availability of Fast Internet. Most of the paradigms of Industry 4.0 rely on internetconnection. Failing to have powerful internet connection could paralyze the firmof not allowing to reach full intensity.

• Organizational risks. “The company organization plays an important role espe-cially at the highest hierarchy level. Management must define a clear strategy andplan for digitalization and demonstrate an understanding of IT and processes”.

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Figure 2.1: Humans, organization, and technology model (Source: Oks et al. [23])

2.2.1 Implementation of Industry 4.0 paradigm in the firmOne crucial stake for firms is the implementation, whether technological or organi-

zational, of Industry 4.0 in firms. Veile et al. [22] take interest in the question, andgive insight from the best practices. As schematized by Oks et al. [23], implementationtouches three dimensions: Technological, organizational, and human (figure 2.1).At the human level, Veile et al. [22] tell us that firms need to adapt the employees’

tasks, as with automation, the work required by them change. Employees will be moreinvolved in mental activities and decision making. Formations and education will thenbe crucial for employees to adapt to this new environment. This recommendationsare also present in several articles : Erol et al. [24] emphasize the need for employeesto have confidence in technologies. They need to have fundamental understanding ofautomation technologies and data analysis [24, 25]. Employees also need to be awareof security implications and data abuse issues [25]. Furthermore Kagermann et al. [26]state that people in the firm should be aware of the interconnected nature of the systemthat are working with, and themselves have interdisciplinary knowledge. Kiel et al. [20]recommends that firms work closely with school and universities in order to provide theskills needed for Industry 4.0 environment employees. Trainings, education programsand e-learning are recommended by many [24, 27, 28]. However, it should be notedthat as technology will develop, intuitive design will probably require less training overtime [22].Benesova & Tupa [29] provide a detailed list of the qualifications needed by firms to

run an Industry 4.0 factory (figure 2.2).At the organization level, Veile et al. [22] find that in order to implement Industry 4.0,

firms need to adapt their corporate culture and communication. Management shouldserve as a role model, leading towards change, but in an incremental rather than radical

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Figure 2.2: Qualification and skills (Source: Benesova & Tupa [29])

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way. The corporate cultural changes required are many: Willingness to learn, promotionof creativity and innovation and recognition of the customer and its needs.

The organizational structure of the firm should be revised. Industry 4.0 needs an“agile” organization, which encompass flat and weak defined hierarchies, flexible struc-tures and processes and decentralized settings. This agile organization will allow bet-ter Industry 4.0” implementation by enabling faster decision-making and promotingentrepreneurial spirit. Management should also adapt to the agile organization. Imple-mentation of Industry 4.0 could go through pilot projects to test and evaluate benefitsand challenges of these new practices. The role of organization in an optimal imple-mentation of Industry 4.0 is also emphasized by Schuh et al. [25] who state that theorganization structure must be agile and implies that employees might face frequentchanges of tasks as well as affiliations to teams. Employees should also be organizedin communities, matching their ability to work on certain issues for a period of time.Less formal organizational structures are said to support decentralized and optimizeddecision-making in Industry 4.0 factories [30, 31]. It is also important for firms to focuson their core competencies and so outsource value creation processes, hence cooperatewith partners [32–34].

At the technological level, Veile et al. [22] recognizes a great challenge for firms imple-menting Industry 4.0 technologies which is about security and safety. Indeed firms willneed to protect themselves from external actors and interferences. External partners andcustomers are the main interferences. To protect themselves, firms can apply specificsecurity systems and so security experts will be needed in the firm to run the securitysystem.To prepare new Industry 4.0 technologies adoptions, firms should seek internal and

external knowledge. External sources can be the best practices used by other firmsor academic literature. Internal sources are firms’ own R&D branches and a constantlearning by mistakes. Still according to Veile et al. [22] the key elements of technologicalimplementation of Industry 4.0 are:

• A proper understanding of new technologies and trends.

• Acquire new hardware components such as radio-frequency identification (RFID),Network connections, sensors, micro-processors and actuators to collect machinedata and allow analyses.

• Software adaptations in order to digitally connect all processes and systems, andstoring the data in clouds.

• Secure and standardized interfaces to prevent information losses.

• Retrofit of the existing infrastructures and systems.

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Veile et al. [22] provide a framework of Industry 4.0 implementation in figure 2.3(a).Furthermore, they give an overview of the existing literature on the key aspects ofimplementing Industry 4.0 in firms in the figure 2.3(b).

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(a) Framework of Industry 4.0 implementation

(b) Literature on the key aspects of implementing Industry 4.0

Figure 2.3: Source: Veile et al. [22]

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2.2.2 Geographical environment for Industry 4.0 firmsAn important aspect for a firm is about the environment it chooses to evolve in.

If the last decades have seen many firms from developed countries offshoring many oftheir activities to third-world countries to reduce their costs, the many advantages ofIndustry 4.0 could provoke a new trend toward “re-shoring” or “back-shoring”, hencethe return of some or all of the activities of the firms that did offshore before. Arlbjørn& Mikkelsen [35] have found through a study about firms in Denmark that many jobscould be maintained in the home country thanks to automation. Foerstl et al. [36] andBailey & De Propris [37] also believes Industry 4.0 could be beneficial for reshoring ac-tivities. Indeed automation and digitalization imply less reliance on labor which was akey reason for firm to offshore their activities [38,39]. It thus has started an explorationof the advantages of these technologies to permit back shoring activities [34, 40, 41]. Itshould be noted though that a recent study [42] finds a low rate (14%) of backshoringfirms adopting Industry 4.0 technologies.

The second environment-related variable a firm can act on is whether it chooses tobe part of a a geographical cluster or not. Clusters of firms are said to allow buildingcommon language, trustful relations and enhance interactive learning, all beneficial toinnovation and better supply chains. On the other hand, Industry 4.0, which allowlong-distance communication and cooperation might seem to reduce the need for geo-graphical agglomeration. But in fact Götz & Jankowska [43] state that Industry 4.0 andclusters work well together. To quote them, they propose that “Clusters are conduciveenvironment for testing Industry 4.0 technologies and provide an incubator for Industry4.0 development (experimental laboratory).”

Figure 2.4: Steps towards new technology/industry

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It is then showed that Industry 4.0 induces several changes in the way firms chooseto geographically establish themselves. Adopting this new paradigm could allow themto stop offshoring, and maybe even backshoring their activities. They also still have agreat incentive to be localized near other firms, inside clusters, particularly as Industry4.0 still entails a lot of uncertainty, hence to develop platforms of collaboration and toshare the risk with other firms.

2.3 Implications of Industry 4.0 for Customers2.3.1 Industry 4.0 provides a better comprehension of customers’

demandNowadays, Industry 4.0 plays an important role in our everyday lives, reshapes busi-

ness models, and products and services portfolios. Based on smart technologies, dataanalysis, Internet of Things (IoT), Internet of Services (IoS) and huge innovative in-vestments, Industry 4.0 allows any object and people to be connected anytime andanywhere, with anything and anyone, using any path and any service [44]. Moreover, allthese technologies enable device-to-device and human-to-device interactions in a reliableand robust manner [45]. In this section, we offer to present a literature revue about theimpact of the digital disruption for customers.

First, Industry 4.0 paradigm, also seen as the 4th Industrial Revolution, creates aconvergence between physical products and services, and virtual world, based on ad-vanced digitalization techniques. To do so, firms use in particular Cyber-Physical Sys-tems (CPS), accompanied by computer-based processes, allowing an interaction betweenphysical and digital workflows.CPS are systems of collaborating computational entities which are in intensive con-

nection and interaction with the surrounding physical world and its on-going processes,providing and using, at the same time, data-accessing and data-processing services avail-able on the internet [46]. CPS allow interactions between cyber space and virtual systemsand integrate them to production systems with physical control. These systems bringtogether many areas, such as cyber disciplines (software, cloud, IT. . . ) or physical ones(mechanical, electrical. . . ), including compute and storage capacities, mechanics andelectronics, based on the Internet as a communication medium [47].

The potential of CPS to change customers lives is wide. Indeed, thanks to their com-plexity and the combination of heterogeneous disciplines, as previously mentioned, theycan be used to produce customized and innovative goods and services, in order to an-swer heterogeneous needs. They target size 1 production with shortened deadlines andsimilar costs to mass production [48]. CPS also allow continuous interactions betweenhumans (Consumers to consumers, C2C), between humans and machines (Consumers to

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machines, C2M), but also between machines (Machines to machines, M2M), thanks tointelligent systems and machine learning, among other smart technologies [49]. Hence,existing literature agreed on the fact that Industry 4.0 is a combination of traditionaloptimized industrial manufacturing and advanced innovative technologies [47].

Second, data analysis is at the center of the 4th Industrial Revolution and have asignificant impact on value creation. Indeed, it allows firms to quickly and efficientlyextract and analyze large datasets, in order to predict customers’ demand, and providethem products and services fitting perfectly to their needs.Industry 4.0 comes with CPS, Internet of Things (IoT), Internet of Services (IoS),

Cloud Computing (CC), and more generally smart factories. According to Li et al. [49],“all these trends have in common the integration of several features in the same place asa response to challenges of computerized decision making and big data that are prolif-erated by the internet and cloud computing”. Thus, thanks to these systems developedduring the 3rd Industrial Revolution and its improvements in digitalization, industriescan elaborate better responses to customers’ needs and enhance their utility [49]. Thebest tool to achieve this goal is the use of data analysis, and more specifically Big Data.

Chong et al. [50] carried a full study to assess the role of Big Data, Internet ande-services in business models. They argued that these tools can help reaching a betterunderstanding and predicting of product demand. They also show that manufacturerscan use online shops and marketplaces as predictors of customers’ needs, using the ex-ample of Amazon.com. This would allow firms to predict their product demand. Indeed,online marketplaces are becoming much more efficient than traditional ways of sellingproducts because they provide online reviews services, which are important predictorsof products sales, paying attention to customers’ requests.

Industry 4.0 is organized around communication channels, that enable exchanges ofinformation about customers’ needs, technical aspects of production, workers, resourcesallocation, downstream and upstream partners, manufacturers and so on. It impliesexchanges of huge amounts of various types of data, collected continuously. Firms canmeasure what customers like, what they buy or look at, but also how they are in-fluenced by advertising, promotions and reviews. They can use Big Data to predictrigorously customers’ demand, processing huge amounts of data in real time [38]. Largeamounts of data are collected and sent to smart services and production systems tobe analyzed. Thanks to this automation of data processing, products and services canbe customer-adapted. It increases value added for both customers and firms and offerservices and products in real time, perfectly adapted to market demand. Big Data, busi-ness and data analytics and systems thinking offer leaders in management a systematicway of thinking for increased understanding and more effective work [28]. These toolshelp firms in their decision-making processes, analyzing trends of markets because theyprovide a deep understanding of customers’ needs and behaviors. As a result, customers

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satisfaction is multiplied, and they are the center of business concerns. Intelligent dataanalysis changes companies’ value chains as they rely on the production of disruptivetechnologies. Added value is no longer based on products themselves, but rather on theadditional and personalized services associated with them [51].

Moreover, data analytics optimize firms’ relationships with customers because a greatershare Steps towards new technology/industry of data between customers, producers andsuppliers can create a specific customer intelligence along the product life cycle [52].Industries can provide connected products creating a permanent link with customers,following the evolution of the product in different environments, providing remote main-tenance, or supplementing it with additional and customized services according to spe-cific needs of each.

Finally, mass customization is also the heart of Industry 4.0. Firms can implementflexible value chains using smart technologies in order to produce size 1 products atlower costs. Customers’ demand can be translated in effective solution offering and theycan enjoy personalized products and services [20].

With Industrial Internet of Services (IIoS), Industrial Internet of Things (IIoT) andother smarts products, firms produce completely connected tools, completed with down-stream personalized services and solutions, in order to change the way customers aresatisfied. This phenomenon implies huge managerial change, but it is worthwhile be-cause customers satisfaction with personalized products and services leads to loyaltyand trust between them and firms. According to Schmidt et al. [47], smart productsare products which can do computations, store data, communicate and interact withtheir environment, without human intervention. The specificity of smart products andservices is their ability to communicate information, to understand customers’ needs,and the possibility to apply mass customization to their production.With smart products, services and connected value chains, firms can react to customers

request with highly individualized and customized products, fitting to their individualpreferences. Thus, the authors point out that mass customization positively influencesthe potential use of Industry 4.0. Moreover, thanks to this perfect adequation betweenneeds and production, products returns could significantly decrease. Competition be-tween producers is no longer traditional, focused on price or product differentiation.Indeed, in the Industry 4.0 paradigm, the main differentiation factor is the ability toprovide standardized products and services, focused on customization, with more flexiblevalue chains, the possibility to apply last-minute changes to production, while stream-lining production. Better understanding of customers’ demand is the key to stay com-petitive on the digital market [50]. As we have mentioned it previously, firms use datasciences, to analyze business, economic, sales or even demographic data and enhancetheir competitiveness.

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2.3.2 Customers are the heart of Industry 4.0It is crucial to understand the links between firms, society needs, productivity, in-

novative strategies and well-being of customers. Firms need to take advantage of newtechnologies. To do so, producers must understand how to use disruptive and smarttechnologies to offer the best possible products and services to their customers.

First of all, Industry 4.0 is creating new opportunities and new ways of creating value,based on understanding of customers’ needs, mass customization and use of data analyt-ics are the strengths of Industry 4.0, as we have seen it in the previous section. This newproduction paradigm changes supply chains as well as business models, and firms mustadapt to it [49]. Because IoT and IoS, as well as Cloud Computing or even Big Data, al-low any device to be connected, these new business models have to be structured aroundthe Internet, connectivity and smart technologies [53]. Moreover, these business modelsare customer-oriented because the demand is oriented toward individualized productsand services. Industry 4.0 creates new business models, focused on platforms approaches,with deep digital relationships and interactions with empowered customers. Innovationsubstitutes existing players and the ones who dominate customers interface can own themarkets. Digital markets are growing fast, thus it is essential to understand customers’needs to take advantage of market opportunities. Customers are involved in productionprocesses, and understood, with tools of data analysis [20]. This adaptation of produc-tion enhance value added for organizations and customers themselves.

Customers are thus the heart of smart value chains because firms need to rapidlyand flexibly understand their needs, anticipate their demands and provide individual-ized products. In addition, it also implies a strongest competition between firms tocatch customers demand [52]. The aim of this competition is to increase customers sat-isfaction. Indeed, firms can target customers preferences and matched their needs [54].Thus, industries focused on new customer-pull business models can expect higher levelsof satisfaction. From satisfaction derives loyalty and trust, which are essential factors forsetting up a new organization of the production. Lamberton and Stephen [55] describethese empowered customers as “connected customers”, because they can easily and in-stantly interact with firms in the production processes thanks to their use of the Internetand social networks. Social impact is becoming a strategic driver of value. Indeed, todayit plays an important role in firms’ strategies to create value because considering thisdimension allows to create differentiate products, reach new markets, attract workerswith specific qualifications and establish a leadership position [56].

Firms develop a full integration of consumers’ behaviors in the use of CPS, IoT andIoS. Customers’ needs are the foundation of products or services production and mar-keting strategists need to be aware about that. Industry 4.0 firms, through their digitalstrategies, must obtain new customers, but also keep the old ones. It can be done by im-

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proving reliability and accuracy of products, collecting relevant content about customersthrough data analysis to answer their needs in real time, creating strategies of productsand services development [57]. In addition, Deloitte Insights [56] assume that it is un-met customers’ needs that drive innovation. Indeed, if firms use business models drivenby personalized customer experience, customized recommendations, data analytics, andsmart devices, they can hope to create disruptive technologies and products. Hence,disrupting several traditional technologies is one of the main objectives of new businessmodels developed with Industry 4.0.

Second, Industry 4.0 is changing the relationship between customers and producers.Because customers are more and more involved in production processes with smart andcustomized products or services, relationships between them and producers are rapidlychanging. Smart devices could be used by producers and suppliers as marketing intel-ligence tools or decision support systems [55]. Firms can obtain direct contact withcustomers through these connected devices and smart analysis of their experience.

Industry 4.0 is based on horizontal integration across the value chain. To do so, pro-duction is organized around interactions between several value creation factors, suchas equipment, humans, organization processes and products [54]. Industry 4.0 environ-ments are thus intelligent networks of communication and interaction, that enable valuecreation based on needs of customers, workers, suppliers, producers, but also machines.Communication channels between consumers and producers, but also between producersand suppliers allow continuous exchange of information and data. Production involvesnew partners, such as upstream and downstream subcontractors, but also robotic intel-ligent agents (Siri, Cortana, Google Now) [57]. Thus, producers, suppliers, workers androbots are all integrated in the value chain through digitalization and optimization ofthe production process and can work collaboratively along the supply chain in order toinvolve customers as early as possible in the decision process. Moreover, social softwarecan be used to network and connect the different actors with each other [47].Burmeister et al. [58] show new types of relationships between producers and cus-

tomers, with the emergence of Business to Business to Customers (B2B2C) modelsin which firms can directly reach customers. Within this organization, similar to theplatform approach mentioned previously, customers are integrated through digital com-munication and distribution channels to production.

Moreover, Industry 4.0 rely more and more on “service triad” [59–61]. It consists oninteractions and direct connections, constant or intermittent, between a buyer, a sup-plier and a customer. The buyer contracts with the supplier to deliver a specific servicedirectly to its customer. However, customers can also be the heart of service triads, ifwe suppose that they use buyers as intermediaries to access easily service suppliers. Aservice triad is different from traditional organization because it is based on disinterme-diation and outsourcing. Indeed, suppliers can directly exchange with customers and

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similarly suppliers can subvert buyers to directly access customers’ demand. The serviceexchange no longer takes place between suppliers and buyers but straight between sup-pliers and customers. It also differs from manufacturing triad, which involves multiplesuppliers of components, interacting with buyers and customers. Within the domain ofservices, only 3 actors are involved in the exchange. Wynstra et al. [59] consider 3 mainforms of service triads, buyer-initiated triad, customer-initiated triad and supplier-initi-ated triad.

Third, Customers evolve in a much more competitive environment because Industry4.0 requires speed. Indeed, industries must be highly creative to quickly implementnew business models. The will for success is also a criterion of achievement. In thiscontext, industries of the “old economy” must invest in innovation to keep up with thequick trend of development of start-ups, providing smart products and services to cus-tomers [28]. Because customers want personalized and innovative products and services,this enhanced market dynamics and forces companies to stay competitive. In this situa-tion, the firms able to exploit innovative opportunities, to create a partner-like customerrelationship, to exploit strategic differentiation can benefit from a competitive advantageon their opponents. Indeed, customer satisfaction is the heart of Industry 4.0 and canprovide the status of market pioneer for the companies determined to succeed. Thisdynamic increases market competition and changes competitive environment. The mar-ket equilibrium shifts towards a customer-centric approach. Understand and anticipatecustomers demand is a key factor to become a digital leader, and it could imply a moreintense fight between industries for customers. In addition, because data analysis allowsfirms to understand customers’ needs and catch their demand, the one who achieve tobuild an efficient supply chain based on the use of Big Data and other smart technologiescan obtain a competitive advantage over its rivals [50].

Strategic cooperation and inter-firm networks are part of Industry 4.0 and essential.Indeed, industries can work together and need to involve customers and suppliers in theprocess of value creation. To do so, firms share the same cooperative culture, based ontrust, openness to change, open-minded corporate culture and will to innovate. Thisincreased collaboration will help firms to understand customers’ needs [20]. Informationsharing and collaboration between humans, between humans and machines, and betweenmachines (using Artificial Intelligence, and deep learning tools, that enable machines tocreate a specific communication), in the context of Industry 4.0, improve firms’ produc-tivity. Indeed, this sharing enhance production monitoring and awareness all around thesupply chain. It can also reduce delay, distortions, and improve quality of products andservices [45].

If firms apply new hierarchies and less formal organizational structures, it is easier todecentralize decision-making and cooperate with partners in less formal ways. New or-ganizational models, based on decentralized decision-making, with different hierarchical

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levels, such as flat hierarchies, and horizontal interconnection systems, allow interactionsbetween customers, suppliers and several partners [22]. Industry 4.0 aims to create interfirm cooperation but also within firms, pushing away sequential and compartmentalizedproduction. This cooperation can be achieved by outsourcing of value creation processes,flexible agreements with partners and interactions on non-formal marketplaces. Firmscan focus on what they do best and rely on their networks to outsource the remainingtasks to partners. Thus, Industry 4.0 changes market dynamic and is at the origin ofthe creation of industrial digital ecosystems in which firms interact and collaborate withcustomers and suppliers to provide innovative physical products supplemented by digitaland personalized services, based on data analysis [52].

Another way to put customers at the heart of Industry 4.0 and access their data isto develop a platform approach. According to Geissbauer [52], a platform is a nexus ofexchange and interoperable technology, which allows a wide range of vendors and cus-tomers to interact seamlessly. These platforms facilitate communication, transactions,logistic and data collecting. With this type of operation, it is possible to build full digi-tal ecosystems, because the one who own the platform, own access to all suppliers andcustomers.

Finally, it is crucial to wonder how customers will adapt their demand to new technolo-gies connected with smart products and services brought by the 4th Industrial Revolu-tion. Consumer acceptance of new technologies is based on the satisfaction he gets fromthe products, reliability of these, but also by the social influence of the product [53]. Luet al. [62] studied a model of technology acceptance, when applied to Wireless Internetvia Mobile Devices (WIMD). They found out that social influence is a key factor fortechnological acceptance. In this situation, the use of an innovative or smart productcan be viewed as a progress in the social status hierarchy. It is particularly true forindividuals more open to new technologies, namely the 20-34-year-old age bracket.

2.3.3 Industry 4.0 as a vector of social stability and economicsustainability

In 2017, Forbes Insights and Deloitte Insights [56] conducted a survey in 19 European,Asian and America countries, with 1 603 executives from all major industry sectors,in organizations with revenue of $1 billion or more. Individual interviews were alsoconducted. It follows from this survey a global optimism about the social impact ofIndustry 4.0. Indeed, 87% of executives polled believe that it will lead to more socialand economic equality and stability, assuming that technological advances are actingas equalizers that provide more access to jobs, education and financing, because of thecreation of disruptive technologies specialized in problem-solving. New business mod-els based on innovation and smart products or services thus drive deep transformative

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change and it results in a positive social impact.

Industry 4.0 is also an opportunity for firms to build sustainable business models aswell as sustainable industries [63], in order to generate a positive impact on societyand the environment, and design products contributing to the well-being of customers.Beyond the traditional concerns of security, privacy, quality and regulatory, firms needto consider throughout the value chain new considerations of ethics, morality and sus-tainability [56]. Continuous and huge exchanges of data between customers, producersand suppliers allows a better coordination between production and needs, and betweensupplies, products and transport systems. This enables optimization of lead times, trans-port and production, as well as reducing inventory, over-production, transaction costsand wastes [54].

Finally, economic stability can’t be reached in an uncertain environment. The spreadof the Internet has completely changed the way people access information, how they useit and how it is shared between firms, users, suppliers. People relate to more effectivetechnologies, but data clusters needs to be protected from hacking. Indeed, adoptionof Industry 4.0 by firms and customers depend on privacy and security factors. Numer-ous issues must be considered to achieve privacy of the data, security of production,and thus a trusted Industry 4.0 paradigm. When we develop digital ecosystems, it iscrucial to establish strong levels of digital trust, based on transparency, legitimacy andeffectiveness [52]. However, data security issues should not lead to excessive isolation,so it is essential to strike a balance between security and openness to reach a successfulimplementation of Industry 4.0 and enjoy its advantages [22].

Advantages of the IoT are as numerous as disadvantages. The Internet is an opensystem, so personal data is highly vulnerable. Customers are the heart of Industry 4.0,therefore also at the heart of risks. In smart factories, all the devices are interconnected,a small error leads to chain reactions and can bring down the system. As the numberof users increases, risks are growing, thus it is important to build decentralized infras-tructures of security and data protection, to ensure secure communication between thecomponents of the production systems, and enough level of privacy to prevent unau-thorized access to data. Moreover, Industry 4.0 is based on complex interaction andcommunication mechanisms between heterogeneous entities and it is also a threat onthe efficiency of security devices.

It is thus essential to build security and enhance safety of data, in order to protect cus-tomers, and it is maybe one of the major challenges to overcome if IoT is to be acceptedby society. Moreover, huge amounts of data come with problems. Data will need to beprocessed in data centers, which are going to face challenges of storage management,but also of security and privacy. Industries are going to deal with new issues: hackingand cyber criminality. To protect personal data, industries need to develop security

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solutions, collaborating with cyber security experts, or creating firewalls or intrusionprevention systems. Complete surveillance and intrusion detection systems can preventunauthorized access to customers’ data. Smart factories need to hire highly qualified ITsecurity experts in management positions [22]. In addition, firms providing smart prod-ucts and services need to incorporate security features to the latter. Lee and Lee [45]show that a lack of privacy and security in smart supply chains or data processing willcreate resistance to the adoption and tolerance of IoT tools by consumers and by firms.

According to Roman, Zhou & Lopez [64], IoT is based on connectivity and acces-sibility. Notion of connectivity is the fact that anyone can access the data, whereasaccessibility is the fact that data is accessible anyhow and at any time. These authorsidentify five major privacy and security challenges to overcome to build a reliable In-dustry 4.0. First, it is necessary to create security protocols and networks to ensureprotection of communication channel. Second, firms need to create authentication andauthorization mechanisms, in order to protect data and devices. Indeed, without thisidentity management, everything can be accessed by anyone. Third, security can also beenhanced by anonymity and transparency tools. Fourth, because Industry 4.0 is a widephenomenon, it is essential to build trust in this system and a cautious governance, pro-viding stability. Finally, the authors highlight the major role of awareness mechanismsand recovery services to detect, prevent and secure intrusion and attacks of data anddevices.

2.4 Implications of Industry 4.0 for workersAs Industry 4.0 develops, it raises important questions for the labor market, acknowl-

edging that one of the paradigm of this new framework for industry is the idea ofreplacing cheap, physical and repetitive workers by robots, and with the goal, as thetechnological frontier will move, to replace humans in more qualified jobs also. It isthen a crucial question for workers, but also for central authorities that will have toface great changes in labor markets and must adapt their educational systems to formmore skilled workers and avoid mass unemployment rates. While contested, the studyof Frey & Osborne [65] talks about a potential for replacement of humans by robots andautomation around 47% in the United States. It is then crucial to understand what arethe jobs that will be still needed in the Industry 4.0.

Benesova & Tupa [29] tackle this question and state all the jobs required for Industry4.0: There will be a need for qualifications and skills in Information Technology (IT)jobs. These qualified people will need to have a precise knowledge of the processes to cor-rectly process data. These IT jobs would then be organized in small teams of techniciansto provide individual support process like maintenance of the server systems. There willalso be a need for a Programmable Logic Controller (PLC) programmer to provide au-

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tomation in the systems and complementary automation over time. One of the centralideas of Industry 4.0 is to reduce the number of worker in physical or repeating tasks byrobots. Hence there will be a great need for robot programmer to dynamically programand to commission these robots. Software engineers will also be needed to develop, editand distribute information systems that will be crucial to maintain flexibility and adapt-ability in the production process. Once the information is gathered in databases, it willneed processing by data analysts. Finally the information will need to be protected fromhacker attacks on the system. Cyber security technicians will then be needed.

On another level, new jobs in production will also be needed. Electronics technicianswill be crucial to ensure machine maintenance. He will have manual skills, and knowl-edge in electrics and hydraulics. The automated process will also require the designand installation of mechanical parts provided by an automation technician. Control andsupplies in the automated process will still need an human to take in charge. It will bethe role of the production technician. Finally, to analyze errors and their causes, and toperform quality control at the output, process engineers will still be needed.

Thus, smart industries are driven by large data analysis, and employees need to be ableto transform this data into useful information and smart services [66]. Thus, jobs such asdata scientist, IT experts or engineers are going to face an increasing demand, becausethey are seen by the firms as innovation-producing co-workers and entrepreneurs ableto enhance digital disruption [67]. Conversely, Industry 4.0 will remove heavy physicallabor by automation with industrial robots. Hence, Industry 4.0 is a phase of transfor-mation and transition for firms, during which some jobs will disappear, and some willbe created. However, nowadays it is difficult to assess the overall impact on employ-ment because the 4th Industrial Revolution is a significant quantitative change, but alsoa qualitative one. Historically, data shows that technology creates more jobs than itdestroyed [68]. In a case study of Germany, Rübman et al. [69] assume that Industry4.0 is going to lead to a 6% increase of the manufacturing employment and 10% in themechanical-engineering sector, before the end of the decade.

It is important to stress that in this detailed list of qualifications that will be requiredin Industry 4.0 according to Benesova & Tupa [29], there is a diversity of level of qual-ifications needed. Most of the jobs in production only requires high-school level whilethe IT jobs will most of the time require a postgraduate education. Most importantly,most of these jobs require autonomy and flexibility, skills that can hardly be learned ina course, but rather, that people can embody over time, if the whole education systemis concerned about.

Accordingly, for the OPIIEC [70], changes in the workplace are already taking placein order to make the transition to Industry 4.0. Jobs with a high growth are linked todigitalization and automation. In their panel, they record that 50% of firms forecast a

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diminution of manufacturing and logistic jobs as they are easily replaced by robots. Formonitoring jobs, industrials are less confident as if they will be able to replace them withrobots in the next few years. OPIIEC also underline the primary role of Informationsystems director in the context of Industry 4.0. Firms also state that they have troublerecruiting data scientist, a rising occupation where the offer remains too scarce to answerthe needs of industrials.Finally according to the firms surveyed, the next three most important occupations

will be R&D engineer, computer engineer and automation engineer.

Stock & Seliger [54] also emphasize the fact that manufacturing jobs face the risk ofbeing replaced by robots. The remaining jobs in this area will require more knowledgeand skills like decision-making. However humans will still remain the main organizersof value creation.

The social challenge can be coped with by three different manners according to Stock& Seliger [54]:

• By increasing the training efficiency of workers by combining new ICT technologies(ex: Augmented reality).

• Increasing the intrinsic motivation and fostering creativity by establishing newCPS-based approaches of work organization and design, e.g. by implementing theconcepts of flow theory or using new ICT technologies for implementing conceptsof gamification in order to support decentralized decision-making.

• Increasing the extrinsic motivation by implementing individual incentive systemsfor the worker.

Brown [71] take interest in the Industry 4.0 plan of China. To him, there is greatchanges coming in China with the strategic program called “Made in China 2025”. Theoverall goal of the program will be to move away from being the main cheap productsmanufacturer in the world, to produce higher value product and services. Brown [71]explains us how it can have an impact on the labor in China:As the Chinese labor is not as cheap as it used to be, China government thinks it is

time to embrace Industry 4.0 paradigm, with the clear intention to replace human work-ers with machines. It is for example reported that Foxconn has replaced 60,000 workersby robots. This brutal change in the process of production planned by China goes withan ignorance for the labor the robots will replace. The workers will be displaced at in-creasing numbers and will need retraining. It might provoke strike and contestation as agreat share of the Chinese population will be impacted. These consequences of Industry4.0 should therefore always be taking into account when planning a great evolution ofthe production processes at country level, otherwise, many will suffer from these changes.

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If these studies show great challenges and threat of unemployment, some authors canhave a more comforting view of the future related to Industry 4.0. It is the case for Raset al. [72]. To them Industry 4.0 implies an increase in complexity in the tasks and skillsrequired for workers, particularly shop floor workers. The tasks are getting less routineand ask for continuous knowledge and skills development. Workers will need to haveskills like high-order thinking or decision-making skills. If technology optimization andefforts in education will permit workers to partially adapt to these new environments,Ras et al. [72] see another way to bridge the skills gap of workers in Industry 4.0: byusing augmented reality (AR). They believe this technology will be able to tackle severalchallenges such as: develop intelligent assistance systems for learning and performanceassessment at the workplace, adapt job profiles accordingly, and address the issue ofwork-life balance.

Kiel et al. [73] also have an overall good vision of the future for workers. They find intheir study that some of the benefits and challenges of Industry 4.0 can involve workerson different level:As for the benefits, they report that Industry 4.0 should allow a “Higher quality of

work due to simplification and trimming of processes and tasks based on technical assis-tance systems”. They also state that with increasing optimization of interfaces betweenhumans and machines, the production jobs should be easier with an increase in securityand a facilitation in the involvement of workers. As for the challenges, workers will needto adapt and gain specific qualifications in order to work in an Industry 4.0 environment.Finally what can be viewed as a challenge for firms but an advantage for workers is abargaining power in favor of the workers in the transition phase where Industry 4.0 isimplemented since there will be less qualified labor than required by the firms. Theywill potentially have the power to ask for better wages and rights, while they will easilyfind jobs if they resign from their current occupations.

Finally, for Eichhorst et al. [74], digitalization in industry will have great impact onthe labor market, but not as dramatic as predicted based on their empirical evidence.In Germany they find that the level of employment has been robust in the last years,whether we look at the number of people employed as well as the hours worked perworker. They however recognize that the great modifications announced by many mightstill be ahead of us.

2.5 Implications for central authorities2.5.1 Industrial policyIndustry 4.0 can be seen as the 4th Industrial Revolution, accompanied by the use of

IoT, IoS, CPS, deep data analysis and smart technologies, studied all along this report.

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Figure 2.5: Policy targets and tools for promoting innovation (Source: Lin, K., Shyu, J.,Ding, K. [77])

To benefit from the significant benefits that Industry 4.0 can bring to firms and soci-ety, this Industrial Revolution need to be accompanied by central authorities. A lot ofgovernment’s plans are already launched in developed countries. We can mention the“Advanced manufacturing Partnership (AMP)” in the United States launched in 2011,or the German “High-Tech Strategy 2020” launched in 2012 as the first action plansfor the implementation of Industry 4.0. Germany is deeply engaged in the creation ofa new industrial model and its influence has been spread in European countries, andthen all around the world. In 2013, the French Nation Council of Industry launched “LaNouvelle France Industrielle” and the United Kingdom (UK) established the “Future ofManufacturing”. Asian countries took part in the race for the 4th Industrial Revolutionsince 2015. Indeed, South Korea, China, Japan and Singapore have added transitiontoward Industry 4.0 to the priorities of their manufacturing strategies [75].

If they want to create efficient industrial policies, central authorities must be perfectlyaware about the identification and understanding of the enabling features of Industry4.0, and about the actors to involve in their strategies. Industry 4.0 need to be launchedat institutional, regional, national, and international levels. Moreover, it is crucial toinvolve various contributors, such as universities and research centers, as well as theprivate sector in this innovation policy. Scientific partnerships are the key for success.According to Rothwell and Zegveld [76], policy instruments for promoting innovationcan be classified into three different dimensions, supply-side, demand-side and environ-mental-side. These dimensions allow to define policy tools and objectives.

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Firms who want to develop the Industry 4.0 framework would enjoy externalities andbenefits of simultaneous cooperation and competition if they take part to clusters. In-deed, clusters are seen as regional digital intelligent ecosystems of industries, enabling aneasier digital transition, thanks to agglomeration economies, externalities, interactionsbetween companies, reduced transaction costs and uncertainty, and share of knowledgeand knowhow [43].

At first glance, this may seem contradictory because Industry 4.0 relies on technologiessuch as IoT, IoS, Cloud Computing and CPS, which are connected devices, supposed toenable digital exchanges between entities that are not geographically close. Accordingto Roblek, Mesko & Krapez [57], Industry 4.0 allows firms to become decentralized or-ganizations, because of manufacturing processes connected across corporate boundaries.Thus, we can think that Industry 4.0 make geographical aspects irrelevant, becausedigital relationships can be set regardless the location.Clusters are geographic concentrations of interconnected companies, specialized sup-

pliers, service providers and associated institutions in a particular field that are presentin a nation or region [78]. Clusters can connect different firms together, but also regionalauthorities, universities and research centers in order to create collaboration, synergies,knowledge spillovers, and enhanced competitiveness and innovation. However, as wehave seen it previously, inter-firm cooperation is primary when it comes to the buildingof Industry 4.0 and smart business models. According to Götz and Jankowska, clustersare facilitators of the digital transformation because, thanks to agglomeration economies,externalities and share of knowledge, they can help firms to implement digital businessmodels and supply chains. Clusters also help to reduce uncertainty, create close commu-nication networks, provide an environment of trust, and enable frequent interactions onmultiple level among all the participants. All these factors are essential when you wantto build up inter-firm cooperation.

Thus, central authorities need to create regional policies in order to build industrialecosystems and foster knowledge and know-how exchanges, inter-firm cooperation andprovide a policy framework which encourages innovation. Moreover, these clusters canbe useful to pool the research effort and the risks that this entails. Indeed, innovation isan uncertain process requiring mutual trust, close cooperation, specific accompaniment,and it asks for protection in case of failure. Central authorities have to enhance theseclusters that may provide the entrepreneurial digital ecosystem needed for a success-ful transformation towards Industry 4.0. Clusters are regional policy tools facilitatingthe 4th Industrial Revolution [43]. Regions need to be engaged in this transition in or-der to provide a basic framework and components of Industry 4.0, Including the righttechnological environment, employees’ trainings, financial means and time devoted tovalue creation. This will enhance international competitiveness and attractivity of localfirms [79].

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Industrial policy is a key factor when it comes to create an Industry 4.0 ecosystem.Governments have to be involved in fostering digital transformation of firms in the con-text of the 4th Industrial Revolution. Central authorities must be the owners of the 4.0’policy. It develops the essential conditions of a political dialogue between the differentstakeholders, finds the terms of the consensus between research, industry, economy, andtrade unions, in order to build a new industrial framework. Industrial policy focused onIndustry 4.0’ transition fosters cooperation between economic and research actors. Itshould build bridges as innovation networks, between various organizations. It must beaccompanied by a reorganization of the regulatory framework, with an efficient compe-tition policy. Likewise, it must maintain the balance of power between small, mediumand large companies. Finally, projects promoted by central authorities must be relayedby research actors to the industries.According to a study led by Deloitte Insights in 2018 with a survey of nearly 2000

global executives, the pace and breadth of technological changes intensify the uncertaintyaround the regulatory environment. Indeed, policies such as industrial and competitionpolicy, but also taxation and exchange policies, need to keep up with technological ad-vancements. The survey shows that changing the regulatory environment is the firstissue supposed to have the greatest impact over companies over the next 5 years for 41%of executives interviewed [56]. Industrial governmental framework needs to be adaptedto the 4th Industrial Revolution and should be able to deal with a rapidly changing firmecosystem.

Germany is one of the biggest leaders of the transition toward Industry 4.0. Indeed,the “High-Tech Strategy 2020” launched in 2012 engaged more than 200 million euros forthe digital transition of the German industrial ecosystem. In their book “Industrie 4.0:les défis de la transformation numérique du modèle allemand” [48], Kohler and Weiszdetail this transition. The German policy is based on a close cooperation of industriesand central authorities, with a particular involvement of the Ministry of Research, andaim to drawing up the guidelines of integrated smart factory, driven by the networkingof all the elements of the production process. The German industrial policy is basedon 3 beliefs. First, Germany’s economic future shall be based on industry. Second, thepriority must be to maintain an international leadership position in the capital goodsmarket. Third, industries need to anticipate the impact of information technologies onthe production process. Germany wants to move its industry toward non-standardizedproduction, with a high level of products’ customization and additional services. To doso, 4 steps were required. Between 2006 and 2009, the government is an initiator, itgradually affirms the numerical axis in its industrial strategy. In 2010, the governmentbecomes a sponsor, and begins to implement its project 4.0. Between 2013 and 2015,the it is subsidiary, it launches projects and creates a research platform. Finally, since2015 the government is project owner, with the implementation of an active industrialpolicy.

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2.5.2 Educational policyThe introduction of Industry 4.0 in factories need to be accompanied by an appro-

priate industrial policy, a risk-tolerant financial framework, but also a very particulareducational policy. Indeed, even if the 4th Industrial Revolution can be associated witha strong automation, with deep interactions between machines, these smart technologiesare controlled by humans and require specific qualifications for employees. To shapedigital transformation, central authorities must coordinate their policies with industries,research centers and universities in order to build an educational system perfectly ap-propriated for the needs of industries. The workforce needs to acquire interdisciplinaryskills and co-working abilities, as well as professional and academic knowledge [77].

School, university and training programs need to be adapted to the technological am-bition of industries, in order to improve IT skills of the future workforce [69]. Indeed,as we have seen it previously, Industry 4.0 requires advanced skills in the fields of dataprocessing, computer programming and control of smart technologies. These qualifica-tions are at the heart of the success of highly innovative factories [80]. In this context,education should be more focused on the promotion of a flexible, innovative and tech-nical culture. The latter need to be focused on specific qualities, such as willingness tolearn, openness to change, appetite for the risk, promotion of creativity, production ofnew ideas, entrepreneurial spirit and democratic leadership [22]. Employees need to beable to shift their skills to their new smart workplaces with highly qualified and innova-tive activities [81]. Because success of Industry 4.0 depends on skills and knowledge ofthe workforce, firms have to attract employees with the right digital skills, train themcontinuously, and retain them [52].

According to Harkins [67], this new educational paradigm is called “Education 4.0”.Education 1.0 was based on memorization and Education 2.0 on Internet-enabled learn-ing. In the aftermath, Education 3.0 empowered students to produce knowledge insteadof just consuming it, and Education 4.0 aims to enhance the production of innovationsby students themselves. In this paradigm, teaching should be held between teachers,students and technology and be amplified by ubiquitous innovation feedbacks loops.

Central authorities need to change their educational policies, because it is essentialto involve teachers and researchers in the formation of the future innovative workforce.Strengthening cooperation links between public and private sector, with communicationand knowledge sharing between research centers, universities and industries, should bethe priority of the educational policy of central authorities [69]. In addition, govern-ments’ efforts need to be oriented toward a deeper work flexibility with regulation ofwork time [81]. In order to accelerate and stimulate the development of a solid andcompetitive national strategy of innovation, it is essential to establish permanent co-operation’ links between industry, academia and government [77]. Moreover, jobs’ and

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skills’ distribution will be completely shattered within firms and central authorities needto anticipate and accompany this reallocation. Indeed, the 4th Industrial Revolution hasa significant impact on the educational system because firms are going to need theexpertise of highly educated employees to understand, control and work with smarttechnologies [29].

2.5.3 Ecological implicationsAwareness towards environmental impacts on industry is observable since 1972 and

the publication of the Meadows Report [82], “Limits to growth”. The latter soundsthe alarm about the incompatibility between the pace of wealth accumulation, the pro-duction progression, and the protection of scarce resources. The main problem is thatmanufacturing production, as well as our consumption patterns, are depleting not onlynon-renewable natural resources, but also renewable ones. In 1987, The World Commis-sion on Environment and Development define the concept of sustainable development. Itinvolves protecting the quality of the Earth’s natural systems so that they can continueto meet the needs of today’s population, without compromising the ability of futuregenerations to meet their own needs. It also involves a double solidarity, inter-gener-ational and North-South. More recently, the Nicolas Stern’ report [83] assume that ifno action is taken to change our consumption and production processes, by 2050 thecosts of environmental problem would exceed those of the 1929 crisis. Environmentalconcerns are now at the heart of production processes, and it seems impossible and lessacceptable for firms to be only focused on profit maximization without considering socialand environmental impact of their production.

Industry 4.0 is an opportunity to achieve social and environmental benefits. Indeed,thanks to data analysis, smart production monitoring, optimization and mass-customiza-tion of products and services, firms can reduce waste, energy consumption, carbonfootprint, and streamline transports and logistics processes. Central authorities canencourage industries to create such sustainable value. To do so, they need to createan industrial framework based on sustainable business models, that create a positiveimpact on the environment, or reduce a negative one. Moreover, industrial ecosystemsand value creation networks that characterizes the 4th Industrial Revolution, are oppor-tunities to create closed-loop product life cycles and industrial symbiosis, with efficientcontrol of resources [54]. Firms can reduce waste of material and their energy consump-tion thanks to smart manufacturing systems. According to Jamali et al. [84], firms actin a sustainable way if they consume just the resources that can be produced from liningand non-living nature, and if they only generate emissions that can be absorbed by thenaturally existing ecosystem.

To build a sustainable transition, long-term partnerships between public and privatesectors are crucial. Firms need to be supported by central authorities because it can

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be difficult to invest in disruptive and new technologies, whilst considering ecologicalconcerns. Such sustainable partnerships can be focused on the Triple Bottom Line objec-tives, people, profit and planet, that is social, economic and environmental concerns [85].Companies need to combine economic success and profitability while considering theiremployees and the ecological impact of their activities. Because combining innovationin new technologies and sustainability is a difficult task [20], central authorities need toprovide good incentives to firms to produce in a sustainable way, and create a regulatoryframework oriented toward social justice and ecological concerns.

According to Lin, Shyu and Ding [77], “sustainable industry development is the cor-nerstone of building a strong manufacturing nation. Promotion of energy-saving andenvironmental protection technologies, skills, equipment will accelerate green tech devel-opment and industry upgrading. Developing recycling economics, such as green energy,smart grid, water-recycling, and especially the recycling efficiency advancement, will en-hance the green manufacturing system and lead industry to an eco-friendly developmenthereafter.”

These ecological and social efforts are also an opportunity for firms to be more attrac-tive and achieve economic performance, as shown in the figure 2.6. Indeed, ecologicalefforts can be linked with economic success, if they are visibly and observable [86]. Con-trary to what might sometimes be believed, social and environmental considerationsdon’t necessarily increase additional costs, but can lead to better economic performanceand competitiveness. Indeed, better environmental performance may allow a better ac-cess to certain markets, the possibility to differentiate products and services, the creationand selling of pollution-control technologies, and lower transaction costs implied by re-lations’ management with external stakeholders, as well as costs of material, energy,services, capital and labor.

2.5.4 Incentives to enter Industry 4.0Firms can have doubts about the implementation of smart technologies, CPS, IoT and

IoS. Indeed, because of unclear benefits, huge investments needed, lack of clear detailsabout the transition of supply chains, they can be scared to jump ahead Industry 4.0 [66].That is why central authorities have a key role to play in the support of industries. Poli-cies aim to encourage entrepreneurship, stimulate involvement in risky R&D or businessactivities, improve coordination between innovation and internationalization policies, en-able knowledge sharing, create digital networks, protect and secure access to capital [43].

According to the literature, there are two main channels to finance R&D activities.First, firms can use the allocation of fixed budgets. This channel is often used for basicresearch projects and is assigned to a specific division of the production. Second, firms

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Figure 2.6: Positive links between environmental and economic performance (Source:Lanoie, P., Ambec, S. [86])

can also use project-specific financing. In this situation, each project is studied withcost-benefits analysis in order to plan the individual financing required [22].In addition, important investments should be oriented toward strategic human re-

source management and corporate strategy, because a firm’s performance and competi-tiveness are highly dependent on how its workforce is managed [81]. One the one hand,employees need to have the appropriate technological skills and knowledge for the digi-tal disruption associated with the shift toward Industry 4.0 paradigm, and on the otherhand, employees should receive appropriate incentives to be involved in a continuousinnovative process. With appropriate innovation and educational frameworks, centralauthorities, academics and institutions must provide the right intrinsic and extrinsicmotivations to workers, in order to stimulate their creativity and openness to digitalinnovation [54].

Implementation of Industry 4.0 is based on horizontal and vertical connection of pro-duction and value chains. This creates new business models, with a particular focuson the end customer, and a strong customization of services and products, as we haveseen it throughout this report. To set up such a connection, it is important to createprocesses of intersectoral cooperation and to favor R&D activities with partnerships be-tween private and public sectors (research institutes, universities, industries, etc.) [22].In the context of the 4th Industrial Revolution, firms can not anymore act as single play-

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ers, they need to evolve in an interconnected network of communication with variousstakeholders. In this ecosystem, central authorities have a key role to play. Indeed,through research and educational institutions, they provide strong knowledge and skillssharing, investment support and an appropriate institutional framework.

In addition, intensifying collaboration between customers, producers and suppliers,on the national territory but also with international partners, is a regulatory challengefor international law. National and regional guidelines need to be effective enough toprotect users, both domestically and abroad. Thus, legal issues need to be integratedfrom the very beginning of the implementation of Industry 4.0. Law must therefore keeppace with rapidly changing innovation involving various actors, and protect applicationsunder all conditions [20].

Industry 4.0 can have a big impact on profitability, however it requires big investmentsand firms shouldn’t waste time. Indeed, digital transformation can generate significantadditional revenues, as we have seen it previously in this report, reductions in costs andefficiency gains, among other benefits. Digital disruption requires significant investmentsin IT structures but brings cost reduction opportunities. Firms managers should not bediscouraged to invest in the technological future, they must use new sources of revenueand allocate them to new offers of products and services to finance these investments [20].If they want to enjoy these positive spillovers, firms need to invest in the training of theiremployees, in a digital supply chain, smart technologies, and in security infrastructures.Industrial leaders shouldn’t wait for digital disruption because it constitutes a risk ofbeing put aside. They need to create strategies to stay competitive, and this require in-vesting money in an Industry 4.0 framework. Hence, central authorities need to supportfirms in the development of new technologies, but also during the process of integrationof these in their existing manufacturing environment.

In 2016, PwC published its Global Industry 4.0 Survey, based on interviews of morethan 2000 senior executives from industrial product companies in 26 countries acrossEurope, Americas, Asia Pacific, Middle East and Africa [52]. This report shows that20% of companies surveyed plan to invest more than 10% of their annual revenues before2021 for their digital transition. More than a half of these companies expect rapid re-turn on investment, within 2 years at the most. Thus, investment is the key for success,that is why central authorities need to provide the good incentives to their industrialecosystems. To do so, they have to enhance a trustable financial framework adapted torisk taking and open to credit. The reluctance to adopt digital technologies, becauseof their cost and their sometimes-unclear benefits, is one of the main challenges of the4th Industrial Revolution. So, central authorities must spur industries to finance theseinvestments [87]. Moreover, by combining the efforts of governments, professional cor-porations, industries and research organizations, the technological infrastructure mustbe fast and reliable, so that companies depending on it are encouraged to embark on

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digital disruption [69].

Finally, another challenge for central authorities is security. Governments need toprovide a legal protection of privacy concerning the massive use of data analysis andprotect it against unauthorized access [75]. Thus, governments, as well as public agen-cies must provide a strict legal framework in order to complement firms’ cyber-securitysystems [22]. To properly develop Industry 4.0, companies need a comprehensive set oflegal and ethical solutions, consisting in regulatory mechanisms, economic and legal mea-sures, and technical solutions to their challenges. It is essential to ensure the security,transparency and ownership of the data, as well as to regulate their misuse [73].

2.6 Concluding remarksWe have seen throughout this literature review the various implications of the 4th

Industrial Revolution on our societies. A global optimism emerges from the analysis ofthe literature, however, there are some crucial steps to respect to achieve a successfultransition toward Industry 4.0.

On the industrial side, the implementation of the Industry 4.0 paradigm can bring sig-nificant cost reductions, competitiveness gains, enhanced value creation and optimizationof products and processes, while maintaining a high level of security. Implementation isa crucial stake and should consider both technological and organizational issues. Indeed,we expect that Industry 4.0 create a specific organization based on a corporate cultureoriented toward communication, innovation, creativity and willingness to learn and takerisks.

The particularity of Industry 4.0 is that customers are at the heart of this new produc-tive paradigm. Indeed, they are at the center of business concerns because firms expectto obtain competitive advantages furnishing the demand with customized products andservices, supposed to enhance their loyalty. This can be achieved thanks to the emer-gence of smart data analysis in the production processes. Firms can thus provide betterresponses to customers needs, predict their demands, product highly customized andinnovative goods. This shift of concerns requires new business models and new types ofsuppliers – customers - producers’ relationships.However, even if customers are at the heart of Industry 4.0, the transition of the

workforce must be the first priority. Indeed, with the massive use of technology androbots, we can wonder if workers are going to survive to this 4th Industrial Revolution.Actually, changes are already taking place. The number of workers doing physical andhighly repetitive tasks is decreasing, but the demand for data scientists, IT engineers,electronic technicians, or even cyber-security experts will explode. Industry 4.0 requiresmore diversity in the levels and types of technological qualifications, oriented toward

45


creativity, efficiency and personalized answers to the demand. We have seen that firmscan deal with this social challenge improving the training efficiency of their workforceand fostering intrinsic and extrinsic motivations to get involved in the digital disruption.Cooperation with universities and academics should also be conducted.

Central authorities need to accompany firms transition with specific industrial policies.They need to implement national and regional policies aiming to foster industrial ecosys-tems, enhance entrepreneurship, finance R&D, protect access to capital, and promoteinnovation and political dialogue between the different public and private stakeholders.Educational policies should also be launched in order to educate and train the workforcewith appropriate knowledge and culture, through close partnerships between universi-ties, industries and governments. Security and protection of the data are also hugeinternational and national regulatory challenges. Finally, firms can not anymore focusonly on profit maximization, they must also produce in a sustainable way. Because it isdifficult to be involved in an innovative process while considering environmental issues,central authorities must provide firms with appropriate incentives and accompaniment.

This literature review allowed us to understand the various and complex economicand social impacts of Industry 4.0. However, this concept is fairly recent, that is whythere are still some lacks and certain points remain unclear. Further studies should beconducted to assess the full implications of the 4th Industrial revolution. Moreover, itcould be useful to compare the results of Industry 4.0 according to the different levelsof investments of countries.

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3.1 MQTTThe Message Queuing Telemetry Transport (MQTT) protocol was invented in 1999 by

Dr. Andy Stanford-Clark and Arlen Nipper [88]. It qualifies for the emerging Internetof Things (IoT) and Machine-to-Machine communication (M2M) by being extremelylightweight and simple to implement. Devices with constrained computing power, lowbandwidth, high latency or with unreliable networks can use MQTT. While it is de-signed to minimize network bandwidth, device resource requirements and power usageit attempts to ensure reliability and assurance of delivery to some extend. MQTT in itsversion 3.1.1 is an ISO and OASIS standard [89].

3.1.1 Publish/subscribe patternMQTT builds up on the publish/subscribed pattern first described in 1987 [90].

It is similar to the message queue pattern, which uses queues for decoupled asyn-chronous communication. Both patterns are used as or in Message-oriented middle-wares (MOMs), which stand opposed to Remote Procedure Call (RPC)- or ObjectRequest Broker (ORB)-based middleware. Advantages of the publish/subscribe pat-tern include, but are not limited to: asynchronous communication, loose coupling ofcomponents, buffering of messages and less overhead as it is not necessary to transmitfull object structures. Disadvantages include the necessity for another component thatconnects subscribers and publishers introducing a single point of failure. An extra sys-tem also means less performance and additional needed maintenance. In the contextof M2M these advantages and disadvantages add up to be better suited than RPC- orORB-based middleware. Asynchronous communication that uses a central additionalsystem (broker) to buffer simple messages suits the requirements of M2M. Publishersand subscribers (clients) don’t require a stable connection to the broker as he can asyn-chronously receive messages and buffer them until the clients reconnect. Less bandwidthis needed to transmit simple messages instead of full object structures. A central brokeris able to monitor clients and notify others of one disconnects unexpectedly (last will andtestament). The broker also can be used to easily administer the whole network from acentral point. While clients don’t need much computing power, a more powerful brokercan be used to back-up and transform, aggregate or encrypt data. Such preprocesseddata can then be sent to “the cloud”. So called edge-computing reduces the needed

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bandwidth that is needed to connect to cloud servers. Performing aggregation, transfor-mations or encryption on a central system instead of on single clients/nodes reduces thecost for expensive powerful hardware.

3.1.2 TopicsThe queues of MQTT are represented by topics. A client can publish to one or more

specific topics and/or can subscribe to one or more topics. If a client doesn’t wish toreceive messages from a specific topic anymore he can unsubscribe that topic. Once thebroker receives a message with a gives topic he looks up all clients that have subscribedto this topic and then pushes the message to those. If a client publishes a message witha set retain flag the broker will save that message while still pushing it to all subscribersof that topic. A client that connects and subscribes to that topic after it has alreadybeen pushed to all other subscribers will then receive the retained message by the broker.This means that a client that has been disconnected during the immediate publishingwill still receive the last value.

office010/group1/temperature

office010/group2/temperature

office010/group1/noise

office102/group2/noise

Broker

Sound level meter

Sound level meter

Temperature sensor

Temperature sensor

Display 1 in office 010

Desktop app client 2

Desktop app client 1

Monitoring service

Clients - SubscriberClients - Publisher

Topics:

Figure 3.1: MQTT architecture and topics

A topic is a queue with at most one space. Topics are addressed via hierarchic stringsseparated into levels as shown in figure 3.1. The example uses the hierarchic nature oftopics to sort various sensors by their type and the office/sensor group they are placedat. A simple display in the office with the room-number 010 subscribes to all sensordata from the sensor group closest to it. The display could subscribe to the respectivetopics one-by-one or instead use wildcards. Two kinds of wildcards are available forMQTT-topics: the single-level wildcard “+” and the multi-level wildcard “#”. Display 1can hereby use the topic “office010/group1/+” to subscribe to all types of sensors that

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3 Technical Aspects

are located at the sensor-group closest to the display (here “sensor group 1” in “office010”). This topic also makes sure that a new sensor’s data can be received by the display.The example also shows Desktop app clients which represent employees using an app ontheir smartphone to display data from the sensor network. Such an app could offer afilter to display selected sensors and therefor subscribe to changing topics. Desktop appclient 2 for example filters the network for all noise sensors by using the topic “#/noise”.Another multi-level wildcard is used by the Monitoring service to subscribe to all sensorsin the network (topic: “#”). In big networks subscribing to “#” could overwhelm theclient.A disadvantage of the manageability of a MQTT-network is the lack of a way to tell

which topics are available. If a client subscribes to a topic that no other client publishesto he won’t be warned by the broker. The standard specifies that the special character“$” at the beginning of a topic should not be matched to wildcards (“+/...” or “#/...”).Most broker implementations use this premise and provide a special “$SYS/...” topic.The broker itself publishes various information about the network to this topic. A brokerimplementation might provide a topic that way that publishes a list with all topics thathave been published to since the brokers startup. “$SYS” topics are not part of theMQTT standard (as of the current MQTT Version 5.0 ). The offical MQTT communitytries to establish a common view on the “$SYS” topic on GitHub [91].

3.1.3 Further features and functionalitiesQuality of Service Both communication directions, publishing to a broker or subscrib-

ing topics at a broker, use MQTT’s Quality of Service (QoS) feature. A clientpublishing a message or a client subscribing to a topic can define a QoS level.Three QoS levels, used to send a message from client to broker and from brokerto client, are defined:

• At most once (0); messages get only send once, the transmitter (publisher orbroker) doesn’t care whether the message is received.

• At least once (1); messages get send as often as needed for the receiver (brokeror subscriber) to receive them.

• Exactly once (2); messages get send as often as needed for the receiver (brokeror subscriber) to receive them, but unnecessary duplicates are avoided.

The three given levels 0 to 2 range from fast but unreliable to slow but reliable.

Last Will and Testament The Last Will and Testament (LWT) flag can be set by anyclient connecting to the broker. A client that connects with a set LWT flag alsoprovides a topic and a message. In case of an ungraceful disconnect of a client thebroker sends its LWT message to all clients subscribed to the given LWT topic ofthe disconnected client. This feature can be used by clients to notify other clientsabout their unexpected connection failure.

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Retain If a client publishes a message to the broker with a set Retain flag, the brokerwill save this message for the given topic. The messages gets then redirected toall subscribers as per normal. If a client subscribes to the topic after the publishhas happened, he will not have to wait until the next publish happens but willimmediately receive the last retained message for this topic. This is useful if, forexample, a temperature sensor only publishes the current temperature every hour.A newly connected client that subscribes to this temperature sensor would be keptin the dark until the next publish happens. With the temperature publish beingretained, new subscribers will imminently get the information they need.

Persistent Session A client that reconnects after a disconnect hast to resubscribe toall topics he is interested in. To prevent the necessity to resubscribe, a client canconnect with the cleanSession flag unset. The broker will then look up the clientsID and recall his previous subscriptions. With a set cleanSession flag the brokerwill forget all previous subscriptions of the client. If a client disconnects that didnot have the cleanSession flag set, the broker will also queue all messages withQoS > 0 and send them to the client as soon as he reconnects.

Keep Alive MQTT is based on the TCP/IP protocol. While TCP/IP is supposed tonotify connected clients if one disconnects or closes its socket in certain conditionsthis mechanic fails. The state of a so called “half-open connections” is reached. Inthe context of IoT mobile connections that can cause such half-open connectionsare commonly used. MQTT introduces the Keep Alive mechanic to detect suchbroken connections. A client sends a ping request to the broker that then answerswith a ping response. If a client does not receive a ping response after a giventimeout or the broker does not receive a ping request every given time interval,the connection will be closed.

Bridging Although not specified by the offical MQTT standard most broker implemen-tations, e.g. mosquitto [92], include a bridging feature. A broker that is configuredas a bridge can connect directly to another broker while acting as if he was aclient. By subscribing to all topics of the other broker, he enables his own clientsto subscribe to topics from the other MQTT network. This is useful to separatelarge MQTT networks into sub-systems and handle big message loads.

3.1.4 MQTT 5Interest in the MQTT protocol started rising in 2014 (see figure 3.2). At that time

MQTT 3.1.1 was officially released. Therefore version 3.1.1 is probably the most knownand utilized version. In 2018 the next version, MQTT 5 was released. The number 5was used, because MQTT CONNECT packages use a single byte value to notify thebroker about the clients version; version 3.1 is ’3’ and 3.1.1 is ’4’. MQTT 5 is an OASISstandard [93]. A few of the new features coming with version 5 will be listed here.

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3 Technical Aspects

0

25

50

75

100

10.2010 10.2011 10.2012 10.2013 10.2014 10.2015 10.2016 10.2017 10.2018

mqtt: coap: xmpp: amqp: opc ua:

Figure 3.2: IoT protocols - interest over time (Source: Google Trends Sep. 2019)

Shared Subcriptions Multiple clients can share one subscription. Instead of sending amessage to each client the broker will send messages to each client of a subscrip-tion-group in an alternating manner. This can help to share the load for clientsthat have to process a lot of data.

Key-Value User properties User-defined UTF-8 encoded key-value pairs can be addedto PUBLISH and CONNECT messages to contain metadata.

Reason Codes/Negative Acknowledgements Special codes can be used in PUBACKand PUBREC packages (used by QoS 1 and 2 to acknowledge dataflow-states)to notify a client why a publish might have been refused or that there are nosubscribers to that topic. There are also codes that can be used in DISCONNECTpackages, which can be send by clients and brokers in MQTT 5, not just clients),to give a reason for the disconnect. MQTT 5 also introduces codes with which abroker can notify a client, that he does not implement/support certain features.

Clean Start Formerly known as Clean Session that flag is now called Clean Start. Oldconnection states will now always be saved by a broker and will be discarded bysaid set flag or an expiry timer. A connecting client sets an expiry time for hisconnection. This means that if a client disconnects and never reconnects the brokerwon’t have to queue up increasing amounts of QoS 1 and 2 publishes and save thesession forever.

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3 Technical Aspects

AUTH package To increase MQTT’s security capabilities, a AUTH packages has beenintroduced. This package can be used to handle non-trivial authentication mech-anisms like SCRAM or OAuth.

Resending Publishes In MQTT 3.1.1 the QoS 1 or 2 implementation would resendmessages over and over again, until a acknowledge was received, even on healthyconnections. Clients that weren’t able to keep up with received messages andtherefore not acknowledge them would be stressed further. MQTT 5 fully discardsthis behavior and instead only resends messages, if a connection was interrupted.

Addional changes Often used topics can be abbreviated into numeric topic IDs. Bro-kers can define a maximum package size and notify clients about it. Flow Controlcan be used by a client to notify the broker about the maximum of QoS 1 and 2messages he is willing to process concurrently.

3.1.5 AlternativesMQTT over WebSockets Some MQTT brokers allow the use of MQTT over Web-Sockets. This is convenient as most devices that subscribe to data would probably besmartphones or laptops that use a browser to display data on a website. By usingWebSockets, developers can easily implement a MQTT on their website.

CoAP Similar to MQTT, the Constrained Application Protocol (CoAP) is designedfor the IoT and M2M. It is specialized to work with constrained nodes and constrainednetworks [94]. The protocol has been developed by the Internet Engineering Task Force(IETF) in 2014 at the University of Bremen (TZI) [95]. CoAP uses a request/responsemodel based on the Representational State Transfer (REST) paradigm. The requestand response codes are similar to those used by Hypertext Transfer Protocol (HTTP).This enables CoAP to be easily translated to HTTP while providing additional multicastsupport, very low overhead and simplicity. The protocol is based on a simple client-servermodel and sits on top of the UDP/IP protocol while TCP can also be used.In comparison to MQTT, CoAP is not directly designed to function as a “one-to-

many”-protocol but to enable a client to simply push data to a server or request data/in-formation. A sensor would typically be a server node from which a client applicationcould GET the current senor readings. Since MQTT Version 5, both protocols canprovide metadata and types with a message. MQTT 3.1.1 didn’t have that feature.CoAP additionally provides support for content negotiation and discovery. In conclu-sion: MQTT is designed to be a simple way of exchanging binary data between lowlevel hardware/devices over unreliable networks using a central, more potent, device asa broker. To enable low level hardware/devices to communicate with the web CoAPand its similarities to HTTP are preferred.

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Extensible Messaging and Presence Protocol Extensible Messaging and PresenceProtocol (XMPP) is a protocol, designed to be used in Instant Messaging (IM). It wasoriginally proposed to the IETF in 2004 and is based on a protocol formerly knownas “Jabber” [96]. It supports different communication protocols, such as socket con-nections, Bidirectional streams over Synchronous HTTP (BOSH) and Efficient XMLInterchange (EXI). Respectively it also supports different communication patters, suchas Request/Response, Asynchronous Messaging, Publish/Subscribe, Event subscription(Observe) and Delayed delivery. The support of such a variety of concept makes it wellsuited for IoT. Admittedly such a variety also comes with the drawback of complexityand larger overhead than for example MQTT or CoAP. A reason why facebook decidedto use a protocol made for M2M, MQTT, for its messager instead of a dedicated IM pro-tocol [97]. An IM protocol becomes an IoT protocol and vice versa. This fact highlightshow situational and dependent on circumstances the topic of choosing a protocol is, notonly in the context of I4.0 and IoT. XMPP also defines, that all messages have to be inthe Extensible Markup Language (XML) format. A fixed data format is an advantageas all clients know what to expect, but it also is a disadvantage as it limits the kind ofdata that can be transmitted. XML is also text/ASCII-based, which means messagesget quiet large.

Advanced Message Queuing Protocol The Advanced Message Queuing Protocol(AMQP) is, similar to MQTT, used with/as MOM [98]. It was invented by John O’Haraof JP Morgan Chase & Co. in 2003 and a concrete documentation started to form in2004 [99]. Since version 1.0 AMQP is a standard, approved by ISO and IEC [100]. TheOASIS standard was released in 2012 [101].Similar to MQTT AMQP assumes an underlying reliable transport layer protocol like

TCP/IP. Central node of an AMQP network is also a broker. Unlike a MQTT thebroker is a little more complex and features more “classic” queues by not only providinga publish/subscribe pattern but also the possibility for clients on the consumer side topull new data from a queue. The broker itself is also divided into so called Exchangersand Queues. A client in the publisher role pushes a message to an Exchange node. TheExchange node is then responsible for routing a message to zero to many Queue nodes.Routing is done according to Bindings between Exchanger and Queue(s). There aredifferent types of Exchanges that e.g. multicast to multiple Queues, route to Queuesaccording to routing keys and key patterns (similar to MQTT topics) or just routemessages to a default Queue. Clients in the role of a Consumer can use one or moreQueue. A Consumer can choose whether he wants messages to be delivered to him(push) or fetch them as he sees necessary (pull). This means AMQP can reproduceMQTT behavior by using topic Exchanges and push Queues. Therefor MQTT can beseen as a subset of the full AMQP implementation, which has limited possibilities incomparison but is more lightweight on client side and more scalable on broker side. Forunstable connections it is also important that AMQP can use explicit acknowledgments,

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3 Technical Aspects

i.e. a Queue will only delete a message after the Consumer has acknowledged it. Thiscan be done by the protocol implementation itself or by the application programmer.The second option is useful if the application, for example, wants to store the receivedmessage persistently before it acknowledges it.

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https://www.plattform-i40.de/I40/Navigation/DE/Plattform/Plattform-Industrie-40/plattform-industrie-40.html




http://www.industrie-dufutur.org/aif/

http://www.industrie-dufutur.org/aif/

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http://www.industrie2025.ch/industrie-2025/charta.html

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http://mqtt.org/

http://docs.oasis-open.org/mqtt/mqtt/v3.1.1/os/mqtt-v3.1.1-os.html



https://github.com/mqtt/mqtt.github.io/wiki/SYS-Topics



https://mosquitto.org/

https://docs.oasis-open.org/mqtt/mqtt/v5.0/mqtt-v5.0.html

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http://coap.technology//

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https://www.amqp.org/about/what

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List of Figures1.1 Industrial revolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21.2 Industry 4.0 Projects and programs . . . . . . . . . . . . . . . . . . . . . 31.3 RAMI 4.0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81.4 Viewpoints, Applications Scope and Lifecycle Process of IIRA . . . . . . 101.5 RAMI 4.0 Communication Layer . . . . . . . . . . . . . . . . . . . . . . 111.6 Characteristics of the energy efficiency module . . . . . . . . . . . . . . . 16

2.1 Humans, organization, and technology model . . . . . . . . . . . . . . . . 192.2 Qualification and skills . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202.3 Industry 4.0 implementation framework and literature . . . . . . . . . . . 232.4 Steps towards new technology/industry . . . . . . . . . . . . . . . . . . . 242.5 Policy targets and tools for promoting innovation . . . . . . . . . . . . . 372.6 Positive links between environmental and economic performance . . . . . 43

3.1 MQTT architecture and topics . . . . . . . . . . . . . . . . . . . . . . . . 483.2 IoT protocols - interest over time . . . . . . . . . . . . . . . . . . . . . . 51

63

List of Abbreviations

List of Abbreviationsacatech Deutschen Akademie der Technikwissenschaften

AIDF Alliance Industrie du Futur

AMP Advanced manufacturing Partnership

AMQP Advanced Message Queuing Protocol

AR augmented reality

B2B2C Business to Business to Customers

BOSH Bidirectional streams over Synchronous HTTP

CC Cloud Computing

CoAP Constrained Application Protocol

CPS Cyber Physical Systems

EXI Efficient XML Interchange

HTTP Hypertext Transfer Protocol

I4.0 Industry 4.0

IETF Internet Engineering Task Force

IIAF Industrial Internet Architecture Framework

IIC Industrial Internet Consortium

IIoS Industrial Internet of Services

IIoT Industrial Internet of Things

IIRA Industrial Internet Reference Architecture

IM Instant Messaging

IoS Internet of Services

IoT Internet of Things

LWT Last Will and Testament

M2M Machine-to-Machine communication

64

List of Abbreviations

MOM Message-oriented middleware

MQTT Message Queuing Telemetry Transport

OEM Original Equipment Manufacturer

ORB Object Request Broker

PLC Programmable Logic Controller

QoS Quality of Service

RAMI 4.0 Reference Architecture Model Industry 4.0

REST Representational State Transfer

RFID radio-frequency identification

RPC Remote Procedure Call

SME small or medium-sized enterprise

WIMD Wireless Internet via Mobile Devices

XML Extensible Markup Language

XMPP Extensible Messaging and Presence Protocol

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status report industry 4 · industry 4.0 (i4.0) is a commonly used term, but it is rarely...

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