Industry 4.0: It Takes A Village

Rakesh Gandhi

Industry 4.0 promises to create the Fourth Industrial Revolution and digitally transform manufacturing in discrete and process industries.

Depending on who you talk to, Industry 4.0 has been touted as being able to solve some very compelling challenges that manufacturing companies face in today’s market – from extreme supply, demand, and design variability, to emerging markets of one, and the growing need for rapid innovation.


The digital transformation required to enable Industry 4.0 – automation, integration, and optimization of processes and manufacturing lines – especially in an existing facility, often requires several solutions, as well as onboarding and connectivity of numerous pieces of equipment (including brownfield), often from numerous asset vendors. This often results in:

  • Proprietary and closed approaches to connectivity
  • Lack of collaboration between IT and operational technology (OT) vendors and interoperability of solutions
  • Master data management challenges for asset semantic modeling
  • Security concerns regarding connections, authentication, and authorization

The digital transformation becomes even more complex when companies consider the overwhelming volume of information that will be generated by intelligent, IoT-enabled systems and the analysis resources needed to gain meaningful business and operational insights. Turning data from multiple systems and equipment from multiple vendors (all with different formats and standards) into actionable information for different roles and responsibilities (ranging from plant operators to enterprise users) is no easy task.

The players

If we look at the players involved in delivering and leveraging Industry 4.0, there are three distinct parties involved:

  • Operators of factories, plants, and warehouses
  • Manufacturers of assets, also known as original equipment manufacturers (OEMs)
  • Technology providers, or vendors of Industry 4.0/Industrial Internet of Things (IIoT) solutions

Each party has its own challenges.

Challenges for operators

The current approach, of working with multiple point solutions that are not inherently interoperable, requires laborious orchestration to make it work. Yet we still fail to unlock the potential value of this digital journey due to lack of openness:

  • Digitalization is often perceived as a long-term investment and change process.
  • Standardization is not easy when there are lots of standards. There are multitudes of standards across the IIoT solution platforms, which at times conflict with each other. This leads to inconsistent adoption by solution/platform providers.
  • Onboarding of assets is a manual, intensive challenge, especially when it comes to older, legacy assets in the brownfield.
  • Bandwidth and latency in internet connectivity of cloud-based solutions can be a bottleneck. The amount of data generated by digitalized assets generates an immediate need for local buffering, aggregation, and further computation before results are sent to a connected cloud platform. A cloud-only approach will not suffice to address the requirements for security, safety, latency, and relevance of data.
  • Edge computing with a hybrid solution (cloud and on-premises) is a must for any future solution architecture.
  • There is a need for seamless bi-directional collaboration with multiple asset vendors for contents and data and to be able to access specialized OEM services and solutions without having to sacrifice factory security and needing to open a firewall for each OEM.

Challenges for OEMs

OEMs are looking to find ways to stay relevant and expand revenue potential by offering their asset-specific expertise in digital solutions and services, such as:

  • Easy onboarding of assets with common data semantics across customers’ edge and Industry 4.0/IIoT cloud platforms
  • Seamless, bi-directional collaboration for content and data with multiple operators to enable remote proactive customer services

In the current situation, this is not easy to achieve, as operators need to open factory firewall access for each vendor, leading to security concerns.

Challenges for cloud-based Industry 4.0/IIoT-solutions

  • The lack of open and interoperable solutions and collaboration platforms often leads to complex point-to-point integrations.
  • Establishing a remote access connection (e.g., for support, maintenance, and patching assets on the production site) is a complicated organizational and technical endeavor. More importantly, it leads to plant security concerns if there is a need to open multiple firewalls.
  • Scalable commercialization of cloud-based Industry 4.0/IIoT solutions needs a standardized way to distribute software.
  • To create interoperable and interconnected complex solutions consisting of multiple smaller solutions (e.g., a fully automated welding cell in the automotive industry), establishing a standardized communication layer is always associated with high efforts.


The opportunity, however, is very compelling. In 2015, The McKinsey Global Institute projected the value creation potential of factory digitization (also known as IIoT or Industrie 4.0) will range from $1.2 trillion to $3.7 trillion in 2025.

It is estimated that there are over 400 IoT platform offerings and thousands of IoT application startups competing for mindshare, budgets, and value realization. In addition, each equipment manufacturer and operational technology provider brings in unique expertise specific to its machines in the form of IoT applications, adding further complexity for customers.

So, the current situation is that companies are investing in Industry 4.0/IIoT solutions from different vendors on different platforms and carry the burden to face the challenges described above.


The current approach, where each vendor embraces a different IoT platform to offer standalone point solutions, is not sustainable.

To enable successful Industry 4.0 adoption, we need:

  • A common agreement between vendors over standardized connectivity that enables compatibility across respective solutions
  • An extensible edge computing platform architecture
  • Interoperability between Industry 4.0/IIoT solutions and semantic models of assets (products)
  • Tight collaboration between OEMs and operators to unlock potential and value for all

To achieve this, we need a new paradigm where customers (operators) and their trusted asset vendors (OEMs) and solution providers work together to deliver open, interoperable, and compatible platforms and solutions to collaborate on content and data securely.

An open Industry 4.0 alliance

In April 2018, a group of companies decided that “enough was enough” and formed The Open Industry 4.0 Alliance. The alliance’s charter is to “create customer value through holistic interoperable Industry 4.0 solutions and services in a common framework powered by an alliance of leading industry partners to drive the digitization of the factory, plant, and warehouse of our customers.”

The founding members are Beckhoff, Endress + Hauser, Hilscher, IFM, Kuka, Multivac, SAP, and Voith.

A win-win for all

​These member companies are working together to create an ecosystem that will subscribe to a common hybrid software platform architecture and ensure collaboration between operators and OEMs.

The alliance aims to accelerate digitization in factories, processing plants, and warehouses, and in doing so, create mutual benefits for both customers and members. The alliance’s framework enhances collaboration between customers (operators) and manufacturers of assets (OEMs), through (near) real-time visibility of asset operations and usage.

The Open Industry 4.0 Alliance is looking to rapidly expand this ecosystem and is open for membership to all. Customers are already benefiting by working with alliance members who are part their own ecosystem of trusted vendors of assets, solutions, and services.

Joining the alliance is easy and beneficial for customers as operators, vendors of digital solutions, services, and hardware, or others associated with other aspects of the IIoT/Industry 4.0 journey.

To learn more, download the “Open Industry 4.0 Alliance” white paper” or visit to join.

Rakesh Gandhi

About Rakesh Gandhi

Rakesh Gandhi is Vice President of the Internet of Things (IoT) Go-to-Market business unit at SAP. As an avid innovation enthusiast and IOT evangelist, he supports the go-to-market strategy and solution management of the SAP Leonardo IoT portfolio. Rakesh is a 12-year veteran of SAP and, besides the IoT, has experience in incubating new innovations around mobile; cloud solutions for the customer experience and commerce, and more.