In this discussion, Jeremy Theocharis, Co-founder and CTO of the United Manufacturing Hub, connects with Jacques Engländer from the Industrie 4.0 Maturity Center. This interview sheds light on the pivotal shift in Germany's manufacturing and scientific sectors. Moving away from traditional, vendor-driven standards like OPC UA and Basyx, a new wave embracing simpler, open architectures such as Unified Namespace is emerging. This conversation provides invaluable insights into the reasons behind this transition and its implications for the future of German manufacturing.
Highlights
- Emergence of Unified Namespace: Understanding its role and impact in modernizing Germany's manufacturing landscape.
- Shifting from Conventional Standards: Exploring the transition from established standards like OPC UA and Basyx to more agile, open architectures.
- Revitalization through Unified Namespace: How this approach is reenergizing research and development in German manufacturing.
- Expert Perspectives on Digital Transformation: Jacques Engländer shares his experiences and challenges encountered in the digital transformation journey.
- Forecasting Industrial Trends: Insights into upcoming trends and developments poised to influence Germany’s industrial sector.
- Innovation Meets Practicality: The German industry’s strategic shift towards balancing cutting-edge innovation with practical applications.
- Broader Impact on Corporations and Ecosystem: Discussing the implications of these changes for large corporations and the entire manufacturing ecosystem.
Full Transcript
Jeremy: Hi, I'm Jeremy, Co-founder and CTO of the United Manufacturing Hub. Today, we're honored to have Jacques Engländer from the Industrie 4.0 Maturity Center in Aachen, Germany, joining us. We'll delve into the core of the German manufacturing industry and garner insights from the scientific community. Hi Jacques!
Jacques: Hi, Jeremy. It's great to see you.
Jeremy: To start off on a lighter note, what do you enjoy doing in your free time?
Jacques: That's an interesting question. Primarily, I cherish spending time with my son, who is almost two years old. It's a truly delightful time for our family. We have a large family with many children around, and it's always fascinating to watch them grow and evolve. That's the most rewarding part for me currently. Additionally, I enjoy hiking during vacations. Previously, I used to rebuild motorcycles on my own, though I haven't ridden motorcycles for some time now.
Jeremy: Shifting to your professional life, I've noticed that you've spent considerable time in the German scientific community, particularly at RWTH, and have consulted numerous companies. Could you share a story from your experiences that you find particularly interesting?
Jacques: Certainly. Before diving into a specific story, I've observed that while the companies we work with may appear similar, they each have unique requirements and challenges. One story that stands out involves a heavy equipment manufacturer, which epitomizes everything in one project. This German Mittelstand company, with several factory sites across Europe and globally, decided to construct a new, so-called 'smart factory.' They aimed to start right from the beginning, focusing on architectural development and IoT architectures, unlike the usual challenges of integrating legacy machinery and IT systems. It's one thing to strategize this way, but implementing it through the project's duration is challenging. This approach included considering the business pillars and objectives for the new factory, such as the technology to be used, the global production network, and what would be produced at this site. From an IT perspective, they wanted a modern, flexible architecture, avoiding the rigidity and high costs of changes that companies often face with older systems. They were open to changing their approach in the future, which was a significant aspect of their strategy. The project was comprehensive, starting from the ideation and vision of future IoT architecture to selecting vendors and systems, and finally, implementation. I was involved from the beginning up to the implementation phase, after which I left due to a job change, but I've kept in touch with them. It's gratifying to see the project's success. Of course, some assumptions and requirements evolved during the project, requiring flexibility. The foundational pillars we established remained effective throughout. This project was particularly meaningful to me.
Jeremy: Were the company's goals more strategic, or were they focused on specific improvements, like enhancing quality by a certain percentage?
Jacques: It was a combination of both. The primary business decision to build a new factory was to increase capacity and flexibility in the market, addressing customer needs more effectively. On the digitalization and IT strategy front, the goal was to adopt an open and flexible approach for future savings and adjustments. It was an overarching strategic decision initially, but as the project progressed, it narrowed down to specific technological and system integrator choices.
Jeremy: In your experience, is this typical for the companies you consult with? Could you explain your dual role, being closely connected with both the scientific community and consulting firms?
Jacques: Indeed, it's a unique but challenging role. The company I work for has its roots in a research institute, engaging in numerous research projects, training, and PhD programs. This is essentially the research side. On the other hand, we have a significant consultancy role. In research, we gain insights that are five to ten years ahead of the market, which can be applied in our consultancy projects. Conversely, our consultancy work provides practical insights that feed back into our research. There's a different focus in each role: research is more result-oriented, while consultancy emphasizes cost savings and achieving effective outcomes. This dual approach has been fundamental to our work at the institute.
Jeremy: What are some future trends you foresee, especially those that are ahead of the market?
Jacques: From a research perspective, we're currently focused on technology and use cases, such as AI, process automation, and overall digitalization. We're also examining specific technologies like OPC UA and Basyx Foundation. However, a gap we've identified is in managing capabilities – how to integrate and manage these technologies over time within a broader, more open ecosystem. While we have been discussing specific technologies and their applications, the challenge of managing the digital transformation and aligning it with a company’s strategy is significant. This is particularly relevant when considering how to engage people and establish effective processes.
Jeremy: Are these the typical challenges companies face when they come to you for consultation?
Jacques: Yes, the challenges vary based on the entry point of the consultancy. Some companies seek advice on integrating specific systems or improving capabilities like predictive maintenance. However, the overarching challenge is balancing the local perspective of individual factories with the global strategy of the headquarters. Historically, sites operate autonomously, running their pilots and mock-ups. The difficulty lies in scaling these use cases across different sites and aligning them with the standardized models and objectives set by the headquarters. This is the main challenge we address in our consultancy – finding the right balance between top-down and bottom-up approaches in digitalization and Industry 4.0 initiatives.
Jeremy: So, each factory operates independently, and the challenge in digitalization and Industry 4.0 is effectively rolling out successful cases across different sites?
Jacques: Precisely. We work with companies ranging from those with around 20 sites to those with over 150 globally. In some cases, factories are highly independent, each with its own MES systems and digitalization strategies. The challenge is to bring a coherent top-down strategy to these factories while maintaining a balance that acknowledges the benefits of local autonomy.
Jeremy: Shifting focus, what are some trends or interests you observe from the corporate side, especially regarding technology, standards, or people?
Jacques: A prominent interest is in standards and data models. While there is a significant push for technology advancements like AI and machine learning, the reality is more complex. Discussions with headquarters often revolve around the need for standardized data models and approaches to effectively implement these technologies.
Jeremy: Regarding the use of tools and methods for communication between sites, would you say the focus on standards and data models is a common theme in your discussions with clients?
Jacques: Absolutely. Standards and data models are central in almost every initial discussion with our clients. The challenge many companies face, despite over a decade of discussing Industry 4.0, is the difficulty in scaling use cases and digital transformation. There's a prevalent issue in realizing tangible benefits from these initiatives, which is a significant concern from a company perspective.
Jeremy: Previously, we discussed the topic of unified namespace, which seemed to surprise you, given the strong preference for standards like OPC UA and Basyx in the German scientific community. What led you to consider the unified namespace approach?
Jacques: My interest in the unified namespace stemmed from research and literature, as well as online exploration. In Germany, there's a tendency to adhere strictly to standards and a bureaucratic approach, often leading to overly complex projects. The problem lies in attempting to find a one-size-fits-all solution for IoT architectures, which is impractical due to the diversity of company needs. While OPC UA and Basyx aim for flexibility, they do so on a more limited scale compared to the unified namespace approach. The focus in Germany has traditionally been on process automation, with less emphasis on aligning technology with business goals and structures. In contrast, the unified namespace, as a concept rather than a specific technology, better addresses these company-wide challenges. It promotes a more flexible, open, and modern IT architecture, which is more aligned with what companies need today.
Jeremy: Could you elaborate on your understanding of the unified namespace, particularly in contrast to traditional German process automation standards?
Jacques: The unified namespace is often subject to various interpretations, which I believe is acceptable for a concept like this. It fundamentally addresses the issue of data accessibility and the challenges of siloed systems. The concept of a single source of truth is crucial, but it's not about centralizing all data in one place. Rather, it’s about understanding where data resides and how to access it efficiently. The unified namespace serves more like an address book for data. Another key aspect is the publish-subscribe methodology, which allows systems to be loosely coupled rather than heavily interconnected. This approach facilitates efficient data exchange across an entire company, not just limited to a single production line or site. Lastly, the unified namespace can represent the overall structure of a company, adapting to modern needs rather than being confined to traditional, monolithic architectures. It enables event-driven architecture, focusing on significant changes or events rather than constant status updates. This approach is more aligned with business representation and management in modern IIoT architectures.
Jeremy: You mentioned event-driven architecture and the differences from technologies like OPC UA. Could you expand on that?
Jacques: The distinction mainly lies in the application scope of these technologies. OPC UA is a robust standard for specific environments, like machine connectivity on the shop floor. However, it struggles with handling a high volume of events across a company. In contrast, protocols like MQTT are tailored for large-scale data exchange in IoT scenarios but face challenges in industrial settings due to diverse standards and protocols. Each technology has its advantages, but when considering a comprehensive company architecture, an approach with MQTT and loosely coupled systems seems more future-proof than the narrower solution-oriented perspective of OPC UA.
Jeremy: It sounds like OPC UA is more suited for process automation within Germany, but when thinking about enterprise-level applications, it becomes more of an IT challenge. Could you share your experiences with implementing OPC UA, particularly regarding data volume?
Jacques: OPC UA is undoubtedly a solid standard for process automation and works well within its scope. However, when it comes to handling large amounts of data at the enterprise level, it becomes less efficient. In contrast, technologies like MQTT / Kafka are designed to handle data on a much larger scale, measured in gigabytes per second, unlike the limitations encountered with OPC UA in automation contexts.
Jeremy: Moving on, I noticed you mentioned Azure adopting one of your frameworks. Could you tell us more about that?
Jacques: Certainly. Our main framework at the Industry 4.0 Maturity Center, where I currently work, was developed in 2017 to address a crucial question: how to measure Industry 4.0 maturity. Five years after the term's inception, we created the maturity index to assess a company's status quo. This assessment helps companies identify their current maturity level, whether it's 2.3, 3, or any other level, and plan their progress over the next five to ten years. It's vital to understand that achieving the highest maturity level in every aspect isn't always necessary or feasible due to cost or complexity. For many companies we work with, reaching level four is quite sufficient.
To briefly explain the levels, the first two are more related to Industry 3.0 – focusing on computerization and connectivity. From level three onwards, it's about visibility and understanding events, but not necessarily comprehending their implications – that's level four, transparency. Level five introduces predictive capabilities, like anticipating equipment failures. The final stage, level six, is about adaptability, where production systems can self-adjust for optimal performance.
Our framework also evaluates organizational and cultural aspects, not just IT systems and resources. It's about preparing the entire company for digital transformation, emphasizing change management, acceptance, and a culture that tolerates failure.
Regarding Azure adopting our framework, they applied it, particularly in the context of cloud technology, adapting it slightly but retaining the core principles. It's gratifying to see our framework gaining global recognition and adaptation.
Jeremy: Which link should I include in the show notes – your LinkedIn post or the full article on Azure?
Jacques: The LinkedIn post would be ideal, as it also includes a link to the Azure Adoption Framework.
Jeremy: I'll make sure to include the LinkedIn post in the show notes for our audience to access. Now, do you have any questions for me?
Jacques: Yes, I'm curious about the United Manufacturing Hub. Given your proximity to the trends we've discussed and the emphasis on open architectures, what sets your solutions apart? What is your unique selling point?
Jeremy: At United Manufacturing Hub, we're more than just a technology company; we aim to merge the worlds of computers and factories. It's not solely about technology; it's about integrating people and processes. We provide the tools to bridge these worlds, supplying engineers with the best IT and OT tools. We've consciously chosen technologies that are accessible and understandable, like OPC UA, MQTT, Kafka, and others. Our solutions are used in large enterprises where there's often existing knowledge and processes that support these tools. We've bundled these technologies into an easy-to-install architecture and open-sourced it. This approach, along with our digital ecosystem independence and end-to-end solutions, is what differentiates us.
Our business model revolves around the lifecycle of data infrastructure. Companies come to us for a robust, compatible, and maintainable core infrastructure, complemented by features that facilitate installation, provisioning, and integration into existing processes. Our solutions help address broader business transformation challenges, being open-source, ecosystem independent, and comprehensive.
Jacques: The open-source and open architecture approach resonates with me. In IT, such openness is standard, as seen in sectors like banking or companies like Netflix and Google, particularly in infrastructure. Linux in the server field is a prime example. In manufacturing, however, there's a deviation from this open-source standard, which is something we aim to align with through our approaches. We're both from Aachen, correct?
Jeremy: From a different angle, but still close by, our company is located just about 100 meters from here. I've always been an IT enthusiast, but I pursued Mechanical Engineering and Business Administration at RWTH Aachen in Germany, a university renowned internationally for mechanical engineering. I ended up at the Digital Capability Center in Aachen, where I was involved in its technical setup as a working student. Combining my IT knowledge with newfound insights into manufacturing proved incredibly valuable. I was responsible for the technical architecture there, and the center, a collaboration between McKinsey and the university, eventually decided to extend its services to clients.
There was a point where I felt immense frustration. I saw companies spending millions on tools that, as an IT enthusiast, I knew were available for free. This led me to collaborate with a system integrator, applying these technologies and supporting management consultancy projects, including retrofitting. That's where I met the second co-founder, and together, we gained extensive experience across various industries worldwide. We consistently used the same tools – Grafana, Node-RED, TimeScale, Influx – and despite initial skepticism, we decided to consolidate these tools and start a product company. Our third co-founder joined to assist with the business aspect, marking the beginning of our story. We initially focused on data infrastructure, the core of our open-source work, then expanded to device container infrastructure, Kubernetes, provisioning, and more. Now, we're developing a management console to simplify setup and management for engineers.
Jacques: It's fascinating to see your evolution. Six years ago, when you started, you probably didn't envision developing a management console. It's a testament to how startups evolve, staying attuned to customer needs and market trends.
Jeremy: As we near the end of our discussion, for our audience interested in reaching out, when should they do so, and how can they contact you? What advice do you typically offer?
Jacques: If anyone watching this video has questions or feels stuck in ineffective initiatives, struggling to balance local and global perspectives, or seeks a manageable Industry 4.0 roadmap for the next five to ten years, don't hesitate to contact me. Our team is very open to discussions. You can reach me via phone or LinkedIn – my mobile number is even listed there. Alternatively, email us or download some of our white papers from our website for an initial impression. We also have a podcast for those who prefer audio content. Feel free to reach out in whichever way suits you best.
Jeremy: I'll include a link to the LinkedIn post about the Azure framework and your LinkedIn profile in the video description. Thank you for sharing your insights on the scientific and German manufacturing industries. To our listeners and viewers, if you found this helpful, please comment on this video or LinkedIn post and share your feedback. The details on how to contact Jacques are in the video description. Thank you for listening and engaging with us. Thanks, Jacques.
Jacques: Thank you very much, Jeremy.