Special Issue on Enterprise Solutions to Support a Safe, Secure and Comfortable Life Value chain innovation: “MAKE”

Industrie 4.0 and the Latest Trends in

Monozukuri Innovation in the Auto Industry
MIKAWA Susumu

Abstract
A number of years ago, the German government launched a project called Industrie 4.0, whose goal was to pro-
mote a cyber-physical system that would make possible “smart” factories. Likewise, in the Japanese manufac-
turing industry - where piecemeal improvements have already been implemented - a more cohesive effort is now
underway to achieve “Process innovation” through the utilization of Internet of Things (IoT) and standardization of
device interfaces. In the meantime, the Japanese auto industry, which is Japan’s dominant industry, is undergoing
significant structural changes as a result of global production shifts. This paper discusses NEC’s proposal for ad-
vanced quality management system models based on IoT and big data, as well as related issues pertinent to the
achievement of smart factories.

Keywords Industrie 4.0, smart factory, IoT, ORiN, ISO/TS16949, control plan, quality management system,
monozukuri* process innovation, BOM, technology information management

1. Introduction 2. Differences between German and Japanese Efforts towards

the Achievement of Smart Factories
A few years ago, the German government launched Indus-
trie 4.0, a high-tech project involving industry, academia, and Industrie 4.0 is an action plan announced by the German
government which promotes the computerization of manufac- government in 2011. It’s a concept for next-generation manu-
turing. facturers, in which they will be able to create new values and
In Japan, on the other hand, no national strategy exists, but new business models that have not existed before by collabo-
Japanese manufacturers have been independently pursuing ef- rating with “things” and services inside and outside factories
forts to convert their factories into smart factories. That trend while making the most of IoT and FA.
has begun to accelerate as more and more companies realize Now, let’s look back at the evolution process from the first
that continued competitiveness requires them to upgrade their to fourth industrial revolutions. Whereas automation took
production systems by utilizing the Internet of Things (IoT) place in the third industrial revolution, Industrie 4.0 aims at the
to connect factories and facilities and by standardizing factory achievement of smart factories that are even further evolved,
automation (FA) equipment. As such, it is considered the fourth industrial revolution.
In this paper, we will focus on the structural changes that • First industrial revolution
this environment has stimulated in the auto industry. We will Mechanization of industry through use of steam engines
propose a model aimed at making quality management sys- • Second industrial revolution
tems more advanced through the utilization of leading-edge Beginning of mass production through use of electric
technologies such as IoT and big data. We will also examine power
the issues related to utilizing these technologies to make the • Third industrial revolution
production process more advanced. Automation through use of PLC, which combines elec-

*
Japanese word that refers to manufacturing which is in harmony with nature and that adds value to society.

28 NEC Technical Journal／Vol.10 No.1／Special Issue on Enterprise Solutions to Support a Safe, Secure and Comfortable Life
 Value chain innovation: “MAKE”

Industrie 4.0 and the Latest Trends in Monozukuri* Innovation in the Auto Industry

tricity and IT Table Case studies of innovation aimed towards achieving smart factories in
• Fourth industrial revolution the Japanese manufacturing industry.
Achievement of smart factories proposed by Germany
Company name Details Objective/effect
The German government is implementing multiple policies Company A Created a system to share production-related data pertaining Improvement in quality and
for industry-academia-government collaboration to achieve in real time by enabling factories both inside and outside productivity

Industrie 4.0. One of the areas where research is being actively Japan to exchange data via the Internet. Started to analyze
the data in real time and directly reflect the results
pursued is “plug and produce.” in the control of production lines.
Plug and produce is a concept in which multiple devices Company B Analyzes the data from production lines comprised of Optimization of processes
made by different manufacturers are autonomously connected almost 1,000 processes and optimizes the processes such Improvement in yield rates

and disconnected to and from the backbone cyber-network to as processing of silicon wafers and transportation.
The number of transactions is about 18,000 per day or about
enable production to flexibly handle orders in real time. The 1.6 billion per day.

concept is similar to “plug and play,” which was introduced Company C Uses only robots to assemble components and construct Cost competitiveness

with Windows 95 to automatically set up peripheral devices fully automated lines for digital camera production.
Actual operation scheduled to start in 2015 in two factories
when connected to the PC to provide a convenient, ready-to- in Japan.
use environment. Company D Executes precise energy-saving control without compromising Energy saving
This concept has also been highlighted by the “It’s OWL” quality or productivity while collecting data using a total of Environmental measures

project, a collaboration among companies, universities, and 158 sensors according to equipment and processes.
* This is marketed as an energy management system.
scientific centers of excellence. Winner of the German gov-
Company E 100% implementation of 3D drawing in passenger ship Shorter construction
ernment’s Excellence Cluster Competition - a key aspect of its construction and sharing of them with shipowners. period
Industrie 4.0 strategy, it’s OWL received a government grant Note: This table is based on an article on “Nikkei Monozukuri” published by Nikkei BP.
amounting to 200 million euros, a fact that makes it clear the
importance of this concept to Industrie 4.0.
Furthermore, Germany believes that taking leadership in
setting the technological standards of the future is the key to Resource interface for the Network) and is implementing its
the success of Industrie 4.0. As there is no doubt that optimi- adoption and validation tests. The society reported that con-
zation control will be executed by combining different devices necting FA equipment incorporating this interface and control
and software, the importance of standardization of interfaces software resulted in a significant reduction in the number of
should be obvious. processes required for optimal control of management sys-
Many Japanese manufacturers already use sensors and net- tems.
works to analyze and monitor production processes and oper- Based on what we’ve seen, it’s safe to say that Japan and
ating conditions in their facilities. By feeding back the results Germany are heading in roughly the same direction. However,
obtained by processing the data collected from computers, they the backing of the German government for a coordinated na-
are attempting to convert their factories into smart factories. tional strategy may have put Germany ahead of Japan.
Table below shows excerpts from publicized case studies.
For example, Company A, which is an electronics compo- 3. The Rapid Increase in Global Production and Importance
nent maker, connects Japan and multiple overseas factories via of Quality Management
the Internet to collect and analyze production and quality data
at their facilities. Based on the feedback from these results, This chapter discusses the structural changes in the Japanese
they claim that they have achieved optimum production. By auto industry - relevant to the trend towards smart factories -
analyzing data collected not just from a single factory but data and examines the issues in monozukuri processes caused by
aggregated from multiple factories, their goal is to fine-tune those changes.
quality control and production management to achieve max- Fig. 1 shows the transition in the ratios of production vol-
imum precision. It is also important to note that the ability to ume for Toyota by region on a global scale. The percentage of
have real-time knowledge of overseas production and quality production volume in Japan was about 62% in 2002, but was
conditions while in Japan could streamline management of down to about 40% by 2012. As there was little fluctuation in
global production. the ratios of production volume in regions other than Asia, it is
Similarly, in other cases, it is obvious that many companies clear that about one third of Toyota’s production has shifted to
are targeting process optimization, increased cost competitive- Asia.
ness, and energy saving. When the ratio of overseas production volume increases, the
Now, let’s look at the standardization of interfaces in Japan. number of contracted suppliers and the number of managed
The Japan Society for the Promotion of Machine Industry components increases as well. In addition to obvious issues
standardized an interface for FA equipment called ORiN (Open such as overseas technology transfer, this also leads to an in-

NEC Technical Journal／Vol.10 No.1／Special Issue on Enterprise Solutions to Support a Safe, Secure and Comfortable Life 29
 Value chain innovation: “MAKE”

Industrie 4.0 and the Latest Trends in Monozukuri* Innovation in the Auto Industry

100%
4. Upgrading Quality Management Systems Using IoT and Big Data
90%

80%
Japan
To evolve to meet the demands of the changing business en-
vironment, automakers and their suppliers have been working
Production volume ratios

70%
Oceania

60% Asia
to strengthen and enhance their quality management systems.
50% Africa
The ISO/TS16949 automotive quality management system
Europe
40%
Latin America
standard specifies that documents indicating control plans for
30%
North America quality management (management processes and confirmation
20%
methods for the quality and properties of manufacturing pro-
10%
cesses) should be created and then the plans described in the
0%
documents should be executed.
2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

Based on these control plans, automakers manage their

* Based on publicly available data on Toyota’s official website
manufacturing process quality. However, the reality at many
Fig. 1 Transition in production volume ratios for Toyota by region. production sites is that quality information is recorded and
stored on paper. Creating and storing reports on paper can gen-
erate the following problems:
crease in language and communication problems that can oc- • It takes longer to determine the cause when a quality
cur in an environment where there is no mutual unspoken con- defect occurs
sensus at work. This in turn leads to an exponential increase in • Inaccessible quality reports in remote places (overseas
the complexity of technology management and supply chain factories and facilities)
management. • Inability to utilize report until the next quality fault oc-
Under pressure from the market to reduce development lead curs
time and cost, Japanese automakers have been forced to find Fig. 2 shows a conceptual diagram of a more sophisticated
ways to streamline the manufacturing process. Typical mea- quality management system to solve these problems. Operating
sures include product architecture innovation using standard- information and manufacturing conditions that are output from
ized platforms, as well as modularized designing. This meth- facilities as well as quality records and information of products
odology is very effective at increasing development efficiency; and components with serial numbers can be transferred in real
nevertheless, once a defect occurs in a module or component, time to the quality database. Using IoT technology, these data
there is always the potential risk for a worldwide recall. In is transferred via the standardized interfaces incorporated in
other words, it is necessary to strengthen design quality while measuring instruments, equipment/facilities, and tablets for
reforming product architecture. data entry. The collected quality records can be correlated with
The auto industry is built on a hierarchical structure that serial numbers and manufacturing conditions in the quality da-
comprises many inter-company supply chains. Their final tabase, facilitating quality management.
products - completed cars - are therefore composed of modules Moreover, the data generated in plants and factories around
and components developed and manufactured by many dif- the world can be integrated at the data center and utilized as
ferent suppliers. For this reason, if a defect occurs, the range big data regardless of its origin.
of investigation is not limited to the company’s production Once this has been achieved, it should not only enhance
processes but also extends to its component suppliers overseas quality traceability, it can also be expected to contribute to the
as well as in Japan. In situations where the cause cannot be ac-
curately located or identified, there is a serious risk of massive Serial numbers,
Manual entry
losses generated by the need to totally replace all suspicious ID numbers, etc.
(quality records) Tablets

components, as well as potential damage to the company’s so- Components

Measuring
cial credibility. Direct connection
(quality records)
instruments
Wi-Fi
Manufacturing Facility connection
To sum up, the importance of upgrading and improving the
Feedback

facilities
Direct connection
interfaces
following processes is increasing every year. (manufacturing conditions)

• Design review for modules and components developed Production

technology
and produced by automakers and component suppliers Big data Quality
• Traceability of quality for fast, accurate identification Product
analysis database
development
of the cause of a problem when it occurs Feedback

• Traceability of design changes to make sure that chang- Cloud (data center)
es are efficiently applied and managed
Fig. 2 Enhancing quality management system using IoT and big data.

30 NEC Technical Journal／Vol.10 No.1／Special Issue on Enterprise Solutions to Support a Safe, Secure and Comfortable Life
 Value chain innovation: “MAKE”

Industrie 4.0 and the Latest Trends in Monozukuri* Innovation in the Auto Industry

overall optimization of facility operating ratios without regard of the processes.

to physical location as well as the prediction of equipment As long as integrated management of technology informa-
failure and maintenance timing, spur improvements in electric tion is maintained, it will be possible to know immediately
power demand forecasting and in energy saving, and facilitate that, if 3D Model X or Drawing X that represents Component
the detection of hidden knowledge. X is changed, it affects Process A and therefore a change in
Control Plan A is required. By tracing the relationship infor-
5. Strengthening the Traceability of Technology Information mation on the system, you can sift through the items to be
Management and Design Changes changed without missing anything, efficiently performing re-
newal and distribution processing.
The importance of the strengthening design reviews for Furthermore, when the design alteration processing is exe-
modules and components and the traceability of design alter- cuted on the integrated technology information management
ation processes has already been discussed in Chapter 3. system, it is possible to manage the changes before and after
In order to maintain a quality management system, the first the design alteration, the reasons for the alteration, and the
requirement is the ability to reliably transmit high-quality tech- traces of the alteration, leading to the strengthening of trace-
nology information to production sites around the world and to ability from a technical viewpoint whenever a quality defect
record the data transmission history. (Although data generated occurs.
on the site is collected using IoT and analyzed using big data,
it is of no value if there is a problem with the data itself.) 6. Conclusion
However, the process; distributing large volumes of tech-
nology information and design alteration information to pro- In the first half of this paper, we discussed the different ap-
duction plants around the world, as well as maintaining and proaches in the movement towards smart factories in Germany
managing that data, increases operating loads and generates and Japan, while in the second half we looked specifically
potential problems on both the distributor side and the receiver at efforts to improve and upgrade the capabilities of the auto
side. The control plans, in particular, need to be maintained industry’s quality management systems. In terms of strong
individually with respect to design changes because they are implementation of a national strategy, Germany would appear
likely to be localized according to the differences in produc- to be leading the way. However, there are common aspects
tion facilities and processes. such as that the manufacturing industry is playing the main
One way to accurately and efficiently distribute technology role and that the auto industry is the key industry. So while the
information is to employ an integrated management method strategies may differ, both countries appear to be heading in a
using a list of components or BOM (bill of materials). Fig. 3 similar direction.
shows a conceptual diagram of the integrated management of It is important to note that the auto industry is an industry
technology information using the BOM. In the diagram, rela- in which car manufacturers are supported by a very broad
tionship among information is specified; information to manage range of supporting players. Regardless of where a company
components, 3D models and drawing that specifically define the is headquartered, it will have many overseas production plants
components, information pertaining to the processes to manu- including in emerging economies, a great number of local
facture the components, and control plans to manage the quality employees, and numerous component suppliers from large to
medium-and-small companies. All of these contribute to the
development and manufacturing process. As it looks to the
Component Process Control Plan Manufacture/Inspection
future, it is essential for the auto industry to take measures that
Production
X A a lot focus on both the horizontal axis (lateral expansion towards
globalization) and the vertical axis (mechanisms to support the
X Production
condition
Quality
record entirety from large to medium-and-small companies.
B b
3D Model/Drawing The biggest and most basic task for the horizontal axis is
Design the completion of a network and infrastructure environment
alteration equipped with the technologies necessary to use IoT, such as
Production Wi-Fi. Some factories still have an inadequate network envi-
X’ A' a’ lot
ronment - in some cases not even PCs can be connected, never
X’ Production Quality mind FA equipment. In such cases, the first thing to do when
condition record
B b planning construction is to assure a stable Internet connection.
3D Model/Drawing
Another important task is to take into consideration the du-
Fig. 3 Integrated management of technology information and design alteration rability, dustproofness, and waterproofness of the tablets that
using BOM. will be used. It is necessary to carefully select devices that are

NEC Technical Journal／Vol.10 No.1／Special Issue on Enterprise Solutions to Support a Safe, Secure and Comfortable Life 31
Value chain innovation: “MAKE”

Industrie 4.0 and the Latest Trends in Monozukuri* Innovation in the Auto Industry

Complete car
Complete car
assembler Standardized
quality
database
Module
makers(large Module Module
to medium)

Submodule Submodule Submodule Submodule Submodule

makers

Component
Component Component Component Component Component Component
makers

Fig. 4 Auto industry supply chain and standardized quality database.

suitable for the on-site environment.

As for the vertical axis, a key issue is investment in informa-
tion systems. Although larger companies can afford to invest in
enhancing the sophistication of their production systems, the
scale of investment required is difficult for medium-and-small
companies to handle on their own. Fig. 4 shows a conceptual
diagram of a low-cost, cloud-based service that makes it easy
for smaller companies to quickly ramp up the sophistication of
their quality management systems.
NEC remains committed to developing and deploying ser-
vices able to contribute to every stratum of the auto industry
now and in the future.

* Windows95 is a registered trademark or trademark of Microsoft Corporation

in the U.S. and other countries.
* Wi-Fi is a registered trademark of Wi-Fi Alliance.

Authors’ Profiles
MIKAWA Susumu
Senior Manager
Consulting Business Division

32 NEC Technical Journal／Vol.10 No.1／Special Issue on Enterprise Solutions to Support a Safe, Secure and Comfortable Life
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Vol.10 No.1 Special Issue on Enterprise Solutions to Support a Safe, Secure and Comfortable Life
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