Digital Transformation In Manufacturing

by Jacob Peter, Head IT, Bosch Engineering and Business Solutions

Digitization – A force that is pervasive and has integrated into all walks of our daily life is also set to disrupt enterprises, including the classical manufacturing value chain. With customer centric design, shrinking cycle times becoming an implicit expectation, manufacturing will have to adopt new technologies to be able to meet these requirements. This is ushering in the dawn of fourth Industrial revolution where autonomous and cyber-physical systems would be pervasive. “Smart manufacturing” or “Industry 4.0” is no longer a future trend – for most companies it is now at the heart of their strategy for future. Companies are combining advanced connectivity, automationcloud computing, sensors and 3D printing, to transform their businesses.

Evolution of Manufacturing

The first industrial revolution saw the transition to new manufacturing processes that included moving from hand production to machines. The power of steam was harnessed to mechanize production - this also marked the development of machine tools and rise of the factory system

The second industrial revolution was a phase of rapid industrialization, it used electricity for production and brought about the concept of assembly lines. The unprecedented expansion of rail and telegraph lines helped in movement of people and ideas that was never seen at such a massive scale in human history before, which culminated in the advent of globalization

The third industrial resolution used electronics and information technology to improve and automate manufacturing as we know it today. Technologies like field bus which have enabled PLCs to communicate, automation and MES systems were cornerstones of this revolution.

The fourth industrial revolution is being built on the third, can also be described as the new industrial era in which connectivity, big data analytics are shaping manufacturing. Fusion of the physical world of production with the virtual world of information technology and the internet. The industrial production can implement individualized customer requests on the well-known high-quality level, while reaching higher flexibility and robustness as well as optimal resource allocation.

Value chain of manufacturing

Here is a typical value chain of automotive manufacturing company. The different elements of the value chain use classic design methods like CAD aided by platforms like PLM. Automotive manufacturing relies on many suppliers and logistics and they become a key part of the value chain. Manufacturing could be made to order or made to stock – it is heavily aided by automation, robots and semi manual supply chain. Finally ability to have the entire chain react dynamically to market by dynamic assembly line is a true challenge.

How will digitization impact this value chain?

At Bosch, we see the following seven as the key characteristics as shown above being key in digitization of manufacturing.

Ability for a flexible configuration is indispensable for an efficient data exchange between production systems and for enhancing efficiency in small and medium batch productions. It will require open standards in software and hardware architecture, especially at production networks across all plants.

Distributed intelligence, which is the capability to recognize conditions of products, machines locally and derive effective measures, mandatorily requires a real-time virtual representation of the event. This will need a model-based description of the current production systems, and therefore even an optimization in immediate future.

For secure value-creation networks, it is necessary to have systems for data security that ensure both the exchange of selected and the protection of sensitive data.

Manufacturer’s moving ahead on the digital transformation journey will see impact in the following areas of the value chain,

- Shop floor management: It is the shop floor where the impact of digitization is most visible and prominent, shop floor digitization is the main driving force behind operational improvement.

- Connected Enterprise: Once the digital infrastructure is in place the shop floor must be connected to the rest of the organization. Through the means of advance data mining and natural language processing the existing streams of data can be used to take intelligent decisions, IoT solutions can also be connected to ERP systems thus creating a connected enterprise.

- Smart supply chain: As a result of digitization, supply chains of today are transforming into interconnected, dynamic systems that are agile, efficient and customer focused. Smart supply chains enabled by technologies such as IoT, RFID, AI, ML, Deep learning, AR/VR/MR, Blockchain integrate information from multiple sources and diminish the gap between manufacturing & customer ecosystems.


In tomorrow’s manufacturing all commodity flows will be recorded digitally, the factory will recognize the condition of products and transport containers at any time and the supply chain will be mapped virtually.

Facilities will recognize problems before they occur, smart lines analyze their performance data via software and report threatening failures to the service. In a scenario where a component of a product purchased by a customer has become inoperative, the machines of future will be able to predict these scenarios – with millions of measurement data from the line. Suspicious parts can therefore be tested& potential issues rectified. Not just the products but even the tools are connected in the factory of the future and are sending important data wirelessly to a server.

Digitization will provide visibil­ity across the entire organization in­cluding manufacturing units across the world. It will enhance the abil­ity to capture data, automate pro­cesses, and enable information shar­ing across multiple devices, systems & individuals.

Embarking on the digital trans­formation journey for manufactur­ing organizations is not just a quest for incremental improvement but an initiative that will radically transform the way manufacturing organizations add value as their products move through their value chain and most importantly stay relevant in the era of 4th industrial revolution. CDO’s and plant heads will have to keep a keen watch on how technologies like Block chain, Additive manufacturing and AI could impact manufacturing. It sure is an exciting time ahead.