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Handbook of Industry 4.0
and SMART Systems
Handbook of Industry 4.0
and SMART Systems
Diego Galar Pascual

Pasquale Daponte
Uday Kumar
CRC Press
Taylor & Francis Group
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Boca Raton, FL 33487-2742
© 2020 by Taylor & Francis Group, LLC

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Contents
Preface...................................................................................................................................................... vii
Authors....................................................................................................................................................... xi
1. Fundamentals of Industry 4.0.......................................................................................................... 1
2. SMARTness and Pervasive Computing........................................................................................ 47
3. The Industry 4.0 Architecture and Cyber-Physical Systems..................................................... 79
4. Cloud Computing, Data Sources and Data Centers.................................................................. 119
5. Big Data Analytics as Service Provider...................................................................................... 155
6. IoT and the Need for Data Rationalization................................................................................. 189
7. OPERATOR 4.0............................................................................................................................ 239
8. Cybersecurity and Risk................................................................................................................ 287
9. Industry 4.0 across the Sectors.................................................................................................... 349
Index....................................................................................................................................................... 365
v
Preface
Modern market becomes more global and less national or local. Developed world market is reflected in
the wide range of new products, the rapid obsolescence of products, and the emergence of new products,
high quality standards, short delivery, and decreasing costs. Such conditions are very difficult for the
classical industrial production we have today, and thanks to the 29 progress of modern technological
achievements, such as communication networks and the Internet, that force us to develop and introduce
a new modern era of industrial production based on communicational informational linking of manufac-
turers and customers. This transformative shift in production and manufacturing paradigm is popularly
termed as Industry 4.0. Industry 4.0 has elicited much interest from both industry and academia. A recent
literature survey identified the basic concept, perspectives, key technologies, and industrial applications
of Industry 4.0 and examined its challenges and future trends [1,2] . However, no work has established
a systematic framework of smart manufacturing systems for Industry 4.0 that guides academic research
and industrial implementation until now. To fill the gap, this study proposes a conceptual framework for
Industry 4.0 and Smart Systems.
Actually many disruptive technologies, such as Cloud Computing, Internet of Things (IoT), big data
analytics, and artificial intelligence, have emerged. These technologies are permeating the manufacturing
industry and make it smart and capable of addressing current challenges, such as increasing customized
requirements, improved quality, and reduced time to market. An increasing number of sensors are being
used in equipment (e.g., machine tools) to enable them to self-sense, self-act, and communicate with one
another. Through these technologies, real-time production data can be obtained and shared to facilitate
rapid and accurate decision making. The connection of physical manufacturing equipment and devices
over the Internet together with big data analytics in the digital world (e.g., the cloud) has resulted in the
emergence of a revolutionary means of production, namely, Cyber Physical Production Systems (CPPS).
CPPS are a materialization of the general concept CPS in the manufacturing environment. The intercon-
nection and interoperability of CPS entities in manufacturing shop floors together with analytics and
knowledge learning methodology provide an intelligent decision support system. The widespread appli-
cation of CPS (or CPPS) has ushered in the fourth stage of industrial production, namely, Industry 4.0.
CPPS consist of autonomous and cooperative elements and subsystems, connecting communications
and interactions in different situations, at all levels of production, machines, processes to manufacturing,
and logistics networks. Their operational modeling and forecasting allows the implementation of a series
of basic applied oriented research tasks, and above all controlled systems at any level. The basic assump-
tion in terms of CPPS is reflected in the research and defining relations through the prism of autonomy,
cooperation, optimization and response to the assigned tasks. By integrating analytic and simulation-
based approaches, this prediction may be described in greater detail than ever before. Such systems must
confront a series of new challenges in terms of operational sensor networks, smart actuators, databases
and many others, above all, communication protocols.
CPPS will enable and support the communication between humans, machines, and products alike.
The elements of a CPPS are able to acquire and process data, and can self-control certain tasks and
interact with humans via interfaces.
Although extensive effort continues to be exerted to make systems smart, smart systems do not have a
widely accepted definition. In Industry 4.0, CPPS can be regarded as smart manufacturing systems. CPPS
comprise smart machines, warehousing systems, and production facilities that have been developed digi-
tally and feature end-to-end Information and Communication Technology (ICT)-based integration from
inbound logistics to production, marketing, outbound logistics, and service. Smart manufacturing sys-
tems can generally be defined as fully integrated and collaborative manufacturing systems that respond
in real time to meet the changing demands and conditions in factories and supply networks and satisfy
vii
viii Preface
varying customer needs. Key enabling technologies for smart manufacturing systems include CPS, IoT,
Internet of Services (IoS), cloud-based solutions, Artificial Intelligence (AI), and Big Data Analytics.
Today we are on the threshold of a new industrial revolution, the revolution by which digital networks
are related to operating values in the intelligent factory, and that includes everything from the initial
idea, through design, development, and manufacture, to maintenance, service, and recycling. Industries
4.0 include horizontal integration of data flow between partners, suppliers, and customers, as well as
vertical integration within the organization’s frames – from development to final product. It merges the
virtual and the real world. The result is a system in which all processes are fully integrated – system in
information in real-time frame. The speed and rate of changes in consumer trends will be a significant
driver of Industry 4.0.
Since the products are configured to respond to the preferences of individual users, production must
be more flexible and must be shorter.
The point is to create value for customers, and that means to involve them in the process from the
beginning. Of course, the companies that use the highly efficient mass production to achieve economies
of scale are in benefit, while at the same time they have the opportunity to offer a high level of adaptation.
The industries in developed countries in Europe and North America are based on the exploitation of
CPS through technology based on the integration of wireless systems, wireless control system, machine
learning, and production-based sensors. Such industries are developing a national platform for new pro-
duction systems and new age of Industry4.0-based access to the Internet and CPS.
CPS are a new generation of systems that integrate computer and physical abilities. With the combi-
nation of cyber systems and physical systems, user semantic laws can be traced and thus communicate
with people. Cybernetic systems are a summation of logic and sensor unit, while the physical systems
are a summation of actuator units. Through the ability to interact and expand capabilities of the physical
world using computing power, communication technologies and control mechanisms, CPS allow feed-
back loops, improving production processes and optimum support of people in their decision-making
processes. By using the corresponding sensor technology, CPS are able to receive direct physical data
and convert them into digital signals. They can share this information and access the available data that
connect it to digital networks, thereby forming an IOT.
On the other hand, production of new generation should be adjusted to changeable conditions and
issues put before it. Optimization of plant operations will be implemented by improving and speeding
up communications. Starting points are the solutions offered by a vision of “smart environment” for
production.
In order to create a large-scale smart system, smart devices are used. The term “smart” (often used
to mark intelligence) seems to be applicable in different contexts, because its meaning with respect to
objects is not yet clearly defined.
Smart, in some contexts, refers to an independent device, which usually consists of the sensor, and/or
to activate the microprocessor and transceiver. However, adjective smart is used to characterize and that
contributes to the implementation of additional meanings, which introduced multi-platform communi-
cation and increase of its computing capacity. Intelligence is revealed through cooperation in networks
with other smart devices, which have the possibility to check the system updates and decide whether to
act on them or not. Such a network is called smart grid. They may find a reference to smart objects as
objects that have the ability to connect the stored data, as well as offer access to it for human or machine’s
needs. There are so much smart products that are equipped with memory options so that they can be
understood as a kind of living product.
This era, which is which sensors and chips identify and locate products, and in which products know
their history and current status. This network of machines, storage systems, and manufacturing plants
that will exchange inevitably ahead of us is by the scientific circles of developed European countries
cooled new industrial revolution or Industry 4.0.
The modern process of globalization is characterized by its essential dimensions. First, it marks the
objective planetary processes:
Preface ix
• The essence of technological evolution; compression of time and space, reducing the distance
and time required for more branched, global communication.
• Close connection and interdependence of societies; everything is in a wider range of activities
that have become transnational, and cannot be managed solely within the individual states.
Globalization means the spread of identical form (industrialism and then post-industrialism,
market economy and multi-party political system) to almost the entire social world space.
Retrospectively looking at previous revolutionary development of manufacturing from its beginning

until today, we can see that the period between these revolutions drastically reduced and that we are
walking rapid steps into the future. The emergence of the Internet and Internet technologies of modern
times undoubtedly made a big progress in all human activities. It is an inevitable integration into produc-
tion systems, which will further affect the increase in the complexity of the existing production systems,
as well as new systems coming to us, such as CPPS. The development of production systems in the spirit
of CPPS, use of digitization and e-business imperative is to aspire to smart factories – factories of the
future.
Machines take up the human role in factories. But still the human integration is inevitable with a digi-
tal, electronic, virtual world, so that our work is preceded by further development of production systems
in terms of reliability, efficiency, safety, etc. The current and future development is characterized by
profound and rapid scientific and technological changes, which result with reindustrialization existing
industries and the revitalization of a wide range of human activities and public functions in private life.
Technological development, as the most important factor and an important prerequisite of general
development, presupposes the development and application of new technologies and imposes the need
for restructuring of existing , as well as designing new plants with new settings (fractal, virtual factory).
Therefore, the necessary rapid and immediate change in the existing situation is needed, and it must
include:
• General support in defining development strategies and policies of its realization,

• Strategically oriented factors, research institutions, and supporting institutions, and
• Industrially organized development of new scientific knowledge and their direct transfer into
the economy of the region. Simultaneous changes are possible only on the basis of unique
development strategy in which an important place should take the establishment of regional ,
especially innovation networks of smart factory, which should be the generator of new prod-
ucts, services, and job creation.
The book covers a wide range of topics, including Fundamentals and Architecture of Industry 4.0, Cyber
Physical Systems (CPS), Smartness and Pervasive Computing, Cloud Computing, Big Data Analytics,
Cybersecurity and Risks, and finally Industry 4.0 across the sectors. A number of demonstrative sce-
narios are presented, and current challenges and future research directions are discussed.
We expect that the book will be useful for the beginners as well as for the researchers working in the
field of Industry 4.0 and smart systems
Authors
Diego Galar Pascual is a Professor of Condition Monitoring in the Division of Operation and
Maintenance Engineering at Luleå University of Technology (LTU), where he is coordinating several
H2020 projects related to different aspects of cyber-physical systems, Industry 4.0, IoT, or industrial Big
Data. He was also involved in the SKF UTC center located in Lulea focusing on SMART bearings and
also actively involved in national projects with the Swedish industry or funded by Swedish national agen-
cies such as Vinnova. He has been involved in the raw materials business of Scandinavia, especially with
mining and oil and gas for Sweden and Norway, respectively. Indeed, LKAB, Boliden or STATOIL have
been partners or funders of projects in the CBM field for specific equipment such as loaders, dumpers,
rotating equipment, linear assets, and so on.
He is also the principal researcher in Tecnalia (Spain), heading the Maintenance and Reliability
research group within the Division of Industry and Transport.
He has authored more than 500 journal and conference papers, books, and technical reports in the
field of maintenance, working also as a member of editorial boards, scientific committees, and chairing
international journals and conferences and actively participating in national and international commit-
tees for standardization and R&D in the topics of reliability and maintenance.
In the international arena, he has been a Visiting Professor at the Polytechnic of Braganza (Portugal),
University of Valencia, NIU (USA) and the Universidad Pontificia Católica de Chile. Currently, he is
Visiting Professor at the University of Sunderland (UK), University of Maryland (USA), University of
Stavanger (NOR), and Chongqing University (China).
Pasquale Daponte was born in Minori (SA), Italy, on March 7, 1957. He obtained his bachelor’s degree
and master’s degree “cum laude” in Electrical Engineering in 1981 from the University of Naples, Italy.
He is a Full Professor of Electronic Measurements at the University of Sannio—Benevento.
From 2016, he is the Chair of the Italian Association on Electrical and Electronic Measurements. He is
Past President of IMEKO.
He is a member of I2MTC Board, Working Group of the IEEE Instrumentation and Measurement
Technical Committee N°10 Subcommittee of the Waveform Measurements and Analysis Committee,
IMEKO Technical Committee TC-4 “Measurements of Electrical Quantities,” Editorial Board
of Measurement Journal, Acta IMEKO and of Sensors. He is an Associate Editor of IET Science
Measurement & Technology journal.
He has organized some national or international meetings in the field of Electronic Measurements and
European cooperation, and he was the General Chairman of the IEEE Instrumentation and Measurement
Technical Conference for 2006, and Technical Programme Co-Chair for I2MTC 2015.
He was a co-founder of the IEEE Symposium on Measurement for Medical Applications MeMeA; now,
he is the Chair of the MeMeA Steering Committee (memea2018.ieee-ims.org). He is the co-founder of the
IEEE Workshop on Metrology for AeroSpace (www.metroaerospace.org), IEEE Workshop on Metrology
for Archaeology and Cultural Heritage (www.metroarcheo.com), IMEKO Workshop on Metrology for
Geotechnics (www.metrogeotechnics.org), IEEE Workshop on Metrology for the Sea (www.metrosea.org),
and IEEE Workshop on Metrology for Industry 4.0 and IoT (www.metroind40iot.org).
He is involved in some European projects. He has published more than 300 scientific papers in journals
and presented papers at national and international conferences on the following subjects: Measurements
and Drones, ADC and DAC Modelling and Testing, Digital Signal Processing, and Distributed
Measurement Systems.
He received the award for the research on the digital signal processing of the ultrasounds in echo-
ophthalmology in 1987 from the Italian Society of Ophthalmology, the IEEE Fellowship in 2009, the
Laurea Honoris Causa in Electrical Engineering from Technical University “Gheorghe Asachi” of
xi
xii Authors
Iasi (Romania) in 2009, “The Ludwik Finkelstein Medal 2014” from the Institute of Measurement and
Control of United Kingdom, and the “Career Excellence Award” from the IEEE Instrumentation and
Measurement Society “For a lifelong career and outstanding leadership in research and education on
instrumentation and measurement, and a passionate and continuous service, international in scope, to the
profession” in May 2018, and IMEKO Distinguished Service Award in September 2018.
Uday Kumar is Chair Professor of Operation and Maintenance Engineering, Director of Research and
Innovation (Sustainable Transport), and Director of Luleå Railway Research Center at Luleå University
of Technology, Luleå, Sweden.
His teaching, research, and consulting interests are equipment maintenance, reliability and maintain-
ability analysis, product support, life cycle costing (LCC), risk analysis, system analysis, eMaintenance,
and asset management.
He is a Visiting Faculty at the Center of Intelligent Maintenance System (IMS) – a center sponsored by
National Science Foundation, Cincinnati, USA, since 2011; External Examiner and Program Reviewer
for Reliability and Asset Management Program of the University of Manchester; Distinguished Visiting
Professor at Tsinghua University, Beijing; honorary professor at Beijing Jiao Tong University, Beijing; etc.
Earlier, he has been a Visiting Faculty at Imperial College London; Helsinki University of Technology,
Helsinki; University of Stavanger, Norway; etc.
He has more than 30 years of experience in consulting and finding solutions to industrial problems,
directly or indirectly related to maintenance of engineering asserts. He has published more than 300
papers in international journals and conference proceedings dealing with various aspects of maintenance
of engineering systems, and has coauthored four books on Maintenance Engineering and contributed to
World Encyclopaedia on Risk Management.
He is an elected member of Royal Swedish Academy of Engineering Sciences.
1
Fundamentals of Industry 4.0
CONTENTS
1.1 Introduction....................................................................................................................................... 3
1.2 Industry 4.0....................................................................................................................................... 4
1.2.1 Definition of Industry 4.0.................................................................................................... 5
1.2.2 What Is Industry 4.0?.......................................................................................................... 5
1.2.2.1 Industry 4.0—What Is It?................................................................................... 5
1.2.2.2 Talking about a Revolution: What Is New in Industry 4.0?............................... 6
1.2.2.3 On the Path to Industry 4.0: What Needs to Be Done?..................................... 6
1.2.3 Key Paradigm of Industry 4.0............................................................................................. 6
1.2.4 Industry 4.0 Conception...................................................................................................... 7
1.2.4.1 Five Main Components of Networked Production............................................ 7
1.2.5 Framework of Industry 4.0: Conception and Technologies................................................ 8
1.2.6 Nine Pillars of Technological Advancement...................................................................... 8
1.2.6.1 Big Data and Analytics...................................................................................... 9
1.2.6.2 Autonomous Robots..........................................................................................11
1.2.6.3 Simulation.........................................................................................................11
1.2.6.4 Horizontal and Vertical System Integration.....................................................11
1.2.6.5 Industrial IoT.....................................................................................................11
1.2.6.6 Cybersecurity................................................................................................... 12
1.2.6.7 The Cloud......................................................................................................... 12
1.2.6.8 Additive Manufacturing................................................................................... 12
1.2.6.9 Augmented Reality........................................................................................... 12
1.2.7 Macro Perspective of Industry 4.0.................................................................................... 12
1.2.8 Micro Perspective of Industry 4.0......................................................................................14
1.2.9 Industry 4.0 Components.................................................................................................. 15
1.2.9.1 Cyber-Physical Systems (CPS)......................................................................... 15
1.2.9.2 Internet of Things............................................................................................. 15
1.2.9.3 Internet of Services...........................................................................................16
1.2.9.4 Smart Factories.................................................................................................17
1.2.10 Industry 4.0: Design Principles..........................................................................................17
1.2.10.1 Interoperability..................................................................................................17
1.2.10.2 Virtualization....................................................................................................18
1.2.10.3 Decentralization................................................................................................18
1.2.10.4 Real-Time Capability........................................................................................18
1.2.10.5 Service Orientation...........................................................................................18
1.2.10.6 Modularity.........................................................................................................18
1.2.11 Impact of Industry 4.0........................................................................................................18
1.2.11.1 Quantifying the Impact: Germany as an Example...........................................18
1.2.11.2 Producers: Transforming Production Processes and Systems......................... 19
1.2.11.3 Manufacturing-System Suppliers: Meeting New Demands and Defining
New Standards................................................................................................. 21
1
2 Handbook of Industry 4.0 and SMART Systems
1.2.12 The Way Forward.............................................................................................................. 21

1.2.12.1 Producers Must Set Priorities and Upgrade the Workforce............................. 22
1.2.12.2 Manufacturing-System Suppliers Must Leverage Technologies...................... 22
1.2.12.3 Infrastructure and Education Must Be Adapted.............................................. 22
1.3 RAMI 4.0 (Reference Architecture Model Industry 4.0)............................................................... 23
1.3.1 RAMI 4.0.......................................................................................................................... 23
1.3.2 Additional Details of RAMI 4.0....................................................................................... 24
1.3.2.1 Function of Layers on Vertical Axis................................................................ 24
1.3.2.2 Function of Layers on the Horizontal Left Axis.............................................. 25
1.3.2.3 Hierarchical System Architecture in Industry 4.0........................................... 26
1.3.3 Industry 4.0 Component Model........................................................................................ 26
1.3.3.1 Specification of the Industry 4.0 Component Model....................................... 27
1.4 Servitization.................................................................................................................................... 29
1.4.1 The Concept of Servitization............................................................................................ 29
1.4.2 Defining Servitization....................................................................................................... 30
1.4.2.1 Drivers of Servitization.....................................................................................31
1.4.3 Features of Servitization................................................................................................... 32
1.4.4 Current State of Servitization and Impacts from Industry 4.0......................................... 32
1.4.5 Industry 4.0 Services......................................................................................................... 33
1.4.5.1 Industry 4.0 Servitization Framework............................................................. 33
1.5 Product Service-System (PSS)........................................................................................................ 34
1.5.1 Definition of a PSS............................................................................................................ 34
1.5.2 Features of a PSS.............................................................................................................. 35
1.5.2.1 Product-Oriented PSS (PoPSS)........................................................................ 37
1.5.2.2 Use-Oriented PSS (UoPSS)............................................................................. 37
1.5.2.3 Result-Oriented PSS (RoPSS).......................................................................... 38
1.5.3 Why PSS?.......................................................................................................................... 38
1.5.3.1 Environmental Rationales................................................................................ 39
1.5.3.2 Economic Rationales........................................................................................ 40
1.5.3.3 Customer-Driven Rationales.............................................................................41
1.5.3.4 Technological Drivers.......................................................................................41
References................................................................................................................................................. 42
LIST OF FIGURES
Figure 1.1 Main technologies of Industry 4.0...................................................................................... 8

Figure 1.2 Nine advances transforming industrial production............................................................. 9
Figure 1.3 Industry 4.0 is changing traditional manufacturing relationships.................................... 10
Figure 1.4 Macro perspective of Industry 4.0.................................................................................... 13
Figure 1.5 Micro perspective of Industry 4.0......................................................................................14
Figure 1.6 In Germany, Industry 4.0 will generate significant productivity gains............................ 20
Figure 1.7 In Germany, Industry 4.0 will lead to increased manufacturing employment................. 21
Figure 1.8 RAMI 4.0 model................................................................................................................ 24
Figure 1.9 New control pyramid of RAMI 4.0................................................................................... 26
Figure 1.10 Industry 4.0 component model.......................................................................................... 27
Figure 1.11 Industry 4.0 component..................................................................................................... 28
Fundamentals of Industry 4.0 3
Figure 1.12 Repository of the digital factory........................................................................................ 29

Figure 1.13 I4 servitization framework................................................................................................ 33
Figure 1.14 Evolution of the product-service system concept.............................................................. 36
Figure 1.15 (a) Traditional purchase of photocopier; (b) purchase of a document management
capability........................................................................................................................... 37
Figure 1.16 Product-service systems.................................................................................................... 38
Figure 1.17 PSS exemplification........................................................................................................... 39
Figure 1.18 Smiling curve in a servitization perspective..................................................................... 40
LIST OF TABLES
Table 1.1 Trends and expected developments in value creation factors................................................16

Table 1.2 Design principles of each industry 4.0 component................................................................17
Table 1.3 Servitization definitions........................................................................................................ 30
Table 1.4 Popular definitions of a product-service system................................................................... 35
1.1 Introduction
Industry 4.0 is one of the most frequently discussed topics among practitioners and academics today.
For example, the German federal government announced Industry 4.0 as one of the key initiatives of its
high-tech strategy in 2011 (Kagermann et al., 2013). Since then, numerous academic publications, practi-
cal articles and conferences have focused on the topic (Hermann et al., 2015).
The fascination for Industry 4.0 is twofold. First, for the first time, an industrial revolution has been
predicted a priori, not observed ex-post (Drath, 2014). This provides opportunities for companies and
research institutes to actively shape the future. Second, the economic impact of this industrial revolu-
tion is supposed to be huge, as Industry 4.0 promises substantially increased operational effectiveness
as well as the development of entirely new business models, services and products (Kagermann et al.,
2013; Kagermann et al., 2014; Kempf et al., 2014). A recent study has estimated that these benefits will
have contributed as much as 78 billion euros to the German GDP by the year 2025 (Bauer et al., 2014).
Germany will not be the sole country to profit; similar benefits are expected throughout the world.
With Industry 4.0 becoming a top priority for many research centers, universities and companies within
the past three years, the manifold contributions from academics and practitioners have made the mean-
ing of the term more blurry than concrete (Bauernhansl et al., 2014). Even the key promoters of the idea,
the “Industry 4.0 Working Group” and the “Plattform Industry 4.0,” only describe the vision, the basic
technologies the idea aims at and selected scenarios (Kagermann et al., 2013). They do not provide a
clear definition. As a result, a generally accepted definition of Industry 4.0 has not been published to date
(Bauer et al., 2014).
According to Jasperneite et al. (2012), scientific research is always impeded if clear definitions are
lacking, as any theoretical study requires a sound conceptual and terminological foundation. Companies
also face difficulties when trying to develop ideas or take action, but are not sure what exactly for. “Even
though Industry 4.0 is one of the most frequently discussed topics these days, I could not explain to
my son what it really means,” a production site manager with automotive manufacturer Audi puts it.
This comment reflects the finding of a recent study that “most companies in Germany do not have a
clear understanding of what Industry 4.0 is and what it will look like” (eco—Verband der deutschen
Internetwirschaft, 2014).
As the term is unclear, companies are struggling when it comes to identifying and implementing
Industry 4.0 scenarios. Design principles explicitly address this issue by providing a “systemization of
knowledge” (Gregor et al., 2009) and describing the constituents of a phenomenon. In this way, design
principles support practitioners by developing appropriate solutions. From an academic perspective,
design principles are the foundation of design theory (Gregor et al., 2002). However, we could not find
any explicit Industry 4.0 design principles during our search of the literature (Hermann et al., 2015).
This chapter aims to fill this gap in the research. Based on a literature review, it provides a definition
of Industry 4.0 and identifies six design principles that companies should consider when implementing
Industry 4.0 solutions (Hermann et al., 2015).
1.2 Industry 4.0

The term “Industry 4.0” is used for the industrial revolution taking place currently. This industrial revo-
lution has been preceded by three other industrial revolutions. The first was the introduction of mechani-
cal production facilities starting in the second half of the eighteenth century; this intensified throughout
the nineteenth century. The introduction of electricity and the division of labor (i.e., Taylorism) in the
1870s led to the second industrial revolution. The third industrial revolution, also called “the digital
revolution,” started in the 1970s, when advanced electronics and information technology (IT) developed
the automation of production processes (Hermann et al., 2015).
The term “Industry 4.0” was introduced in Germany in 2011, when an association of representatives
from business, politics and academia promoted the idea as an approach to strengthening the competi-
tiveness of the manufacturing industry (Kagermann et al., 2011). The German federal government sup-
ported the idea by announcing that Industry 4.0 would be an integral part of its “High-Tech Strategy
2020 for Germany” initiative, aimed at technological innovation leadership. The subsequently formed
“Industry 4.0 Working Group” developed recommendations for implementation; these were published in
April 2013 (Kagermann et al., 2013). In this publication, Kagermann et al. (2013) describe their vision
of Industry 4.0 as follows.
In the future, businesses will establish global networks that incorporate their machinery, warehousing
systems and production facilities in the shape of cyber-physical systems (CPS). In the manufacturing envi-
ronment, these CPS comprise smart machines, storage systems and production facilities capable of autono-
mously exchanging information, triggering actions and controlling each other independently. This facilitates
fundamental improvements to the industrial processes involved in manufacturing, engineering, material
usage and supply chain and life cycle management. The smart factories that are already beginning to appear
employ a completely new approach to production. Smart products are uniquely identifiable, may be located
at all times and know their own history, current status and alternative routes to achieving their target state.
The embedded manufacturing systems are vertically networked with business processes within factories and
enterprises and horizontally connected to dispersed value networks that can be managed in real time—from
the moment an order is placed right through to outbound logistics. In addition, they both enable and require
end-to-end engineering across the entire value chain (Kagermann et al., 2013).
These ideas built the foundation for the Industry 4.0 manifesto published in 2013 by the German
National Academy of Science and Engineering (Acatech, 2013).
The term is currently used globally. At the European level, the public–private partnership for Factories
of the Future (FoF) addresses and develops Industry 4.0-related topics (European Commission, 2015).
In the United States, Industry 4.0 is promoted by the Industrial Internet Consortium (IIC) (Stock and
Seliger, 2016).
The paradigm of Industry 4.0 has the following three dimensions (Industry 4.0: Whitepaper FuE-
Themen, 2015; Acatech, 2015; VDI/VDE-GMA, 2015a):
1. Horizontal integration across the entire value creation network,

2. End-to-end engineering across the entire product life cycle and
3. Vertical integration and networked manufacturing systems.
Horizontal integration across the entire value creation network includes cross-company and internal
company intelligent cross-linking and digitalization of value creation modules throughout the value
chain of a product life cycle and between value chains of adjoining product life cycles.
End-to-end engineering across the entire product life cycle refers to intelligent cross-linking and digi-
talization throughout all phases of a product life cycle, from the raw material acquisition to manufactur-
ing, product use, and product end of life.
Vertical integration and networked manufacturing systems include the intelligent cross-linking and
digitalization within the different aggregation and hierarchical levels of a value creation module from
manufacturing stations via manufacturing cells, lines and factories, also integrating the associated value
chain activities, such as marketing and sales or technology development (Acatech, 2015).
Intelligent cross-linking and digitalization covers the application of an end-to-end solution using infor-
mation and communication technologies (ICTs) embedded in the cloud (Stock and Seliger, 2016).
In a manufacturing system, intelligent cross-linking is realized by the application of CPS operating in
a self-organized and decentralized manner (Acatech, 2015; Gausemeier et al., 2015; Spath et al., 2013).
They are based on embedded mechatronic components, i.e., applied sensor systems for collecting data,
as well as actuator systems for influencing physical processes (Gausemeier et al., 2015). Cyber-physical
systems are intelligently linked with each other and are continuously interchanging data via virtual
networks such as the cloud in real-time. The cloud itself is implemented in the Internet of Things (IoT)
and services (Acatech, 2015). As part of a sociotechnical system, CPS use human–machine interfaces to
interact with operators (Hirsch-Kreinsen and Weyer, 2014).
1.2.1 Definition of Industry 4.0

Based on the findings of the literature review, we define Industry 4.0 as follows: Industry 4.0 is a collec-
tive term for technologies and concepts of value chain organization. Within the modular structured smart
factories of Industry 4.0, CPS monitor physical processes, create a virtual copy of the physical world
and make decentralized decisions. Over the IoT, CPS communicate and cooperate with each other and
humans in real time. Through the IoS, both internal and cross-organizational services are offered and
utilized by participants in the value chain (Hermann et al., 2015).
1.2.2 What Is Industry 4.0?

Industry 4.0 is multifaceted. It includes screws communicating with assembly robots, self-driving fork-
lifts stocking high shelves with goods, and intelligent machines coordinating independently running
production processes. In Industry 4.0, people, machines and products are directly connected with each
other (Plattform Industrie 4.0).
1.2.2.1 Industry 4.0—What Is It?

Industry 4.0 refers to the intelligent networking of machines and processes in industry with the help of
ICT. There are many ways for companies to use intelligent networking. The possibilities include:
• Flexible production: Many companies use a step-by-step process to develop a product. By

being digitally networked, these steps can be better coordinated and the machine load better
planned.
• Convertible factory: Future production lines can be built in modules and quickly assembled for
tasks. Productivity and efficiency will be improved; individualized products can be produced
in small quantities at affordable prices.
• Customer-oriented solutions: Consumers and producers will move closer together. The cus-
tomers themselves can design products according to their wishes—for example, sneakers
designed and tailored to the customer’s unique foot shape. At the same time, smart products
that are already being delivered and in use can send data to the manufacturer. By using these
data, the manufacturer can improve his or her products and offer the customer novel services.
• Optimized logistics: Algorithms can calculate ideal delivery routes; machines indepen-
dently report when they need new material—smart networking enables an optimal flow
of goods.
• Use of data: Data on the production process and the condition of a product can be combined and
analyzed. Data analysis will provide guidance on how to make a product more efficiently. More
importantly, there is a foundation for completely new business models and services. For exam-
ple, lift manufacturers can offer their customers “predictive maintenance”: elevators equipped
with sensors that continuously send data about their condition. Product wear can be detected
and corrected before it leads to an elevator system failure.
• Resource-efficient circular economy: The entire life cycle of a product can be considered with
the support of data. The design phase will be able to determine which materials can be recycled
(Plattform Industrie 4.0).
1.2.2.2 Talking about a Revolution: What Is New in Industry 4.0?

Since the 1970s, IT has been incorporated into business. Desktop PCs, the use of office IT and the first
computer-aided automation revolutionized the industry. For Industry 4.0, it is not the computer that is the
core technology, but rather the Internet. Digitalizing production is gaining a new level of quality with
global networking across corporate and national borders. With IoT and machine-to-machine communi-
cation, manufacturing facilities are becoming more intelligent (Plattform Industrie 4.0).
1.2.2.3 On the Path to Industry 4.0: What Needs to Be Done?

Implementing Industry 4.0 is a complex project: the more processes companies digitalize and network,
the more interfaces are created between different actors. Uniform norms and standards for different
industrial sectors, IT security and data protection play an equally central role as the legal framework,
changes in education and jobs, the development of new business models and corresponding research
(Plattform Industrie 4.0).
1.2.3 Key Paradigm of Industry 4.0

Industry 4.0 can be broken down into three major paradigms: the smart product, the smart machine and
the augmented operator.
The guiding idea of the smart product is to extend the role of a product so that it becomes an active
rather than passive part of the system. Products have memory in which operational data and require-
ments are stored so that the product itself requests the required resources and orchestrates the production
processes required for its completion (Loskyll et al., 2012). The ultimate goal is the creation of self-
configuring processes in highly modular production systems (Weyer et al., 2015).
In the paradigm of the smart machine, machines become cyber-physical production systems. The tradi-
tional production hierarchy is replaced by a decentralized self-organization enabled by CPS (Zamfirescu
et al., 2014). The autonomic components with local control intelligence can communicate to other field
devices, production modules and products through open networks and semantic descriptions. In this way,
machines are able to self-organize within the production network. Production lines are so flexible and
modular that even the smallest lot size can be produced under conditions of highly flexible mass pro-
duction. A CPS-based modular production line allows an easy plug-and-play integration or the replace-
ment of one production line with a new manufacturing unit, e.g., in the case of reconfiguration (Weyer
et al., 2015).
The augmented operator targets the technological support of workers in the challenging environ-
ment of highly modular production systems. Industry 4.0 is not gravitating toward worker-less pro-
duction facilities (unlike the Computer Integrated Manufacturing (CIM) approach of the 1980s).
Human operators are acknowledged as the most flexible parts of a production system, as they can
adapt to challenging work environments (Schmitt et al., 2013). As the most flexible entity in production
systems, workers will be faced with a variety of jobs, ranging from specification and monitoring to ver-
ification of production strategies. By the same token, they will manually intervene in the autonomously
organized production system, if required. Optimum support can be provided by mobile, context-
sensitive user interfaces and user-focused assistance systems (Gorecky et al., 2014). Established inter-
action technologies offer forward-looking solutions, including some from the consumer goods market
(e.g., tablets, smart glasses and smart watches). Of course the latter need to be adapted to industrial
conditions. Through technological support, workers can realize their full potential, thereby becoming
strategic decision-makers and fl exible problem solvers capable to handle the steadily rising technical
complexity (Weyer et al., 2015).
1.2.4 Industry 4.0 Conception

In the twenty-first century, product life cycles are shorter and consumers demand more complex, unique
products in larger quantities. Both pose challenges to production.
There are many indications that current practices in the utilization of resources are not sustainable,
with a consequent effect on production.
The industrial sector is experiencing a paradigm shift, which will change production drastically.
The traditional, centrally controlled and monitored processes will be replaced by decentralized control
built on the self-regulating ability of products and work units that communicate with each other.
The essence of Industry 4.0 is the introduction of network-linked intelligent systems to achieve self-
regulating production: in this new workplace, people, machines, equipment and products will commu-
nicate with one another.
The goal is to ensure flexible, economical and efficient production. All parts of the production process
will communicate with all other parts via a central production control system.
In effect, products will control their own production, with virtual and actual reality merging during
production. Scheduling will be also controlled by communicating units. Factories will be self-regulating
and optimize their own operation (Gubán and Kovás, 2017).
1.2.4.1 Five Main Components of Networked Production

The five main elements of networked production are the following:
• Digital workpieces
Each workpiece knows the dimensions, quality requirements and order of its own processing.
• Intelligent machines
Intelligent machines communicate simultaneously with the production control system and the
workpiece being processed, so that the machine coordinates, controls and optimizes itself.
• Vertical network connections
After processing the customer’s unique specifications for the product to be manufactured, the
production control system forward automated rules to the equipment. Essentially, the products
control their own manufacturing process, as they communicate with the equipment, devices
and other workpieces on the conditions of production.
• Horizontal network connections
Communication is realized not only within one factory, but throughout the whole supply chain,
between the suppliers, manufacturers and service providers. The main purpose is to enhance
the efficiency of production and to utilize the resources in a more economical way.
• Smart workpieces
The product to be manufactured senses the production environment with internal sensors and
controls and monitors its own production process to meet the production standards; it can do
so because it can communicate with the equipment, as well as with the components already
incorporated or about to be incorporated.
Industry 4.0 is not a future technology. In July 2015, the Changing Precision Technology Company
(in Dongguan, China) became the first factory where only robots work. Each labor process is exe-
cuted by machines: production is done by computer-operated robots and transport is implemented
by self-driven vehicles; even the storage process is completely automatic (Gubán and Kovás, 2017).
1.2.5 Framework of Industry 4.0: Conception and Technologies

Through the production in a global network, the manufacturing process can flexibly adapt to unique
customer demands, to the activity of the other parties of the supply chain and to the rapidly changing
economic environment.
Industry 4.0 is recognized globally. A 2016 survey by PricewaterhouseCoopers (PwC) identifies three
main areas where it affects the corporate world:
• Integration and digitalization of horizontal and vertical value chains,

• Digitalization of products and services, and
• Formation of digital business models and customer relations.
The new connected technologies are shown in Figure 1.1.
1.2.6 Nine Pillars of Technological Advancement

Technological advances have driven dramatic increases in industrial productivity since the dawn of the
Industrial Revolution. The steam engine powered factories in the nineteenth century, electrification led
to mass production in the early part of the twentieth century, and industry became automated in the
1970s. In the decades that followed, industrial technological advancements were incremental, as break-
throughs transformed IT, mobile communications and e-commerce.
Currently, we are in the midst of a fourth wave of technological advancement: the rise of new digital
industrial technology known as Industry 4.0. The transformation is powered by nine major advances in
Autonomous
Robots
System
Cybersecurity
integraon
Big Data Internet of

Things
Augmented INDUSTRY 4.0

reality Simulaon
Cloud Addive
compung manufacturing
FIGURE 1.1 Main technologies of Industry 4.0. (From Rübmann, M. et al., Industry 4.0: The Future of Productivity and
Growth in Manufacturing Industries, The Boston Consulting Group (BCG), 2015.)
Autonomous
Big data and Robots
analy cs
Simula on
Augmented Horizontal and ver cal

reality system integra on
INDUSTRY 4.0
Addi ve The Industrial

manufacturing Internet of Things
The Cloud Cybersecurity
FIGURE 1.2 Nine advances transforming industrial production. (From Rübmann, M. et al., Industry 4.0: The Future of
Productivity and Growth in Manufacturing Industries, The Boston Consulting Group (BCG), 2015.)
technology: big data and analytics; autonomous robots, simulation, horizontal and vertical system inte-
gration, the Industrial IoT, cybersecurity, the cloud, additive manufacturing and augmented reality (see
Figure 1.2). In this transformation, sensors, machines, workpieces and IT systems are connected along
the value chain beyond a single enterprise. These connected systems (also called CPS) can interact with
one another using standard Internet-based protocols. They can analyze data to predict failure, config-
ure themselves and adapt to changes. Industry 4.0 will make it possible to gather and analyze data across
machines, enabling faster, more flexible and more efficient processes to produce high-quality goods at
reduced costs. This, in turn, will increase manufacturing productivity, shift economics, foster industrial
growth and modify the profile of the workforce, ultimately changing the competitiveness of companies
and regions (Rübmann et al., 2015).
Many of the nine advances in technology are already used in manufacturing, but with Industry 4.0,
they will totally transform production: isolated, optimized cells will come together as a fully integrated,
automated and optimized production flow, leading to greater efficiency and changing traditional produc-
tion relationships among suppliers, producers and customers, as well as between human and machine
(see Figure 1.3) (Rübmann et al., 2015).
1.2.6.1 Big Data and Analytics

The first of the nine pillars is big data and analytics. Analytics based on large data sets have recently
emerged in the manufacturing world; such analytics optimize production quality, save energy, and
improve equipment service. In the Industry 4.0 context, the collection and comprehensive evaluation
of data from many different sources (production equipment and systems as well as enterprise- and
customer-management systems) will become a standard support in real-time decision-making.
For instance, the semiconductor manufacturing company, Infineon Technologies, has decreased prod-
uct failures by correlating single-chip data captured in the testing phase at the end of the production
process with process data collected in the wafer status phase earlier in the process. In this way, Infineon
can identify patterns that help discharge faulty chips early in the production process and improve produc-
tion quality (Rübmann et al., 2015).
10
...to fully integrated data and

product flows across borders
Greater automoon will
displace some of the least
skilled labor but will require
Integrated communicaon higher skilled labor for
along the enre value chain monitoring and managing
reduces work in progress the factory of the future
inventory
From isolated,
opmized cells... TODAY INDUSTRY 4.0
Automated
Automated
Automated
Automated Automated
Machine to machine and machine to human interacon

enables customizaon and small batches
FIGURE 1.3 Industry 4.0 is changing traditional manufacturing relationships. (From Rübmann, M. et al., Industry 4.0: The Future of Productivity and Growth in Manufacturing
Industries, The Boston Consulting Group (BCG), 2015.)
Handbook of Industry 4.0 and SMART Systems
1.2.6.2 Autonomous Robots

Manufacturers in many industries have long used robots to tackle complex assignments, but robots are
evolving for even greater utility. They are becoming more autonomous, flexible and cooperative. Eventually,
they will interact with one another and work safely side by side with humans and learn from them. These
robots will cost less and have a greater range of capabilities than those used in manufacturing today.
For example, Kuka—a European manufacturer of robotic equipment—offers autonomous robots that
interact with one another. These robots are interconnected so that they can work together and auto-
matically adjust their actions to accommodate the next unfinished product in line. High-end sensors and
control units enable close collaboration with humans. Similarly, industrial-robot supplier ABB is launching
a two-armed robot called YuMi that is specifically designed to assemble products (such as consumer
electronics) alongside humans. Two padded arms and computer vision allow safe interaction and parts
recognition (Rübmann et al., 2015).
1.2.6.3 Simulation
In the engineering phase of production, three-dimensional (3-D) simulations of products, materials and
production processes are already used, but in the future, simulations will be used more extensively in
plant operations as well. These simulations will leverage real-time data to mirror the physical world in
a virtual model, which can include machines, products and humans. This will allow operators to test
and optimize the machine settings for the next product in line in the virtual world before the physical
changeover, thereby reducing machine setup times and increasing quality.
For example, Siemens and a German machine-tool vendor developed a virtual machine that can simu-
late the machining of parts using data from the physical machine. This lowers the setup time for the
actual machining process by as much as 80% (Rübmann et al., 2015).
1.2.6.4 Horizontal and Vertical System Integration

Most of today’s IT systems are not fully integrated. Companies, suppliers, and customers are rarely
closely linked, nor are departments such as engineering, production and service. In addition, func-
tions from the enterprise to the shop floor level are not fully integrated. Even engineering itself—from
products to plants to automation—lacks complete integration. However, with Industry 4.0, companies,
departments, functions and capabilities will become much more cohesive, as cross-company, universal
data-integration networks evolve and enable truly automated value chains.
For instance, Dassault Systèmes and BoostAeroSpace launched a collaboration platform for the
European aerospace and defense industry. The platform, AirDesign, serves as a common workspace for
design and manufacturing collaboration and is available as a service on a private cloud. It manages the
complex task of exchanging product and production data among multiple partners (Rübmann et al., 2015).
1.2.6.5 Industrial IoT

Today, only some of a manufacturer’s sensors and machines are networked and make use of embedded
computing. They are typically organized in a vertical automation pyramid in which sensors and field
devices with limited intelligence and automation controllers feed into an overarching manufacturing-
process control system. However, with the Industrial IoT, more devices (sometimes including even unfin-
ished products) will be enriched with embedded computing and connected using standard technologies.
This will allow field devices to communicate and interact both with one another and with more central-
ized controllers, as necessary. It will also decentralize analytics and decision-making, enabling real-time
responses.
Bosch Rexroth, a drive-and-control-system vendor, has outfitted a production facility for valves with a
semi-automated, decentralized production process. Products are identified by radio-frequency identifica-
tion codes, and workstations “know” which manufacturing steps must be performed for each product and
can adapt to perform the specific operation (Rübmann et al., 2015).
1.2.6.6 Cybersecurity
Many companies still rely on unconnected or closed management and production systems. With the
increased connectivity and the use of the standard communications protocols accompanying Industry
4.0, the need to protect critical industrial systems and manufacturing lines from cybersecurity threats
increases dramatically. As a result, secure, reliable communications, as well as sophisticated identity and
access management of machines and users, are essential.
Several industrial-equipment vendors have joined forces with cybersecurity companies through part-
nerships or acquisitions (Rübmann et al., 2015).
1.2.6.7 The Cloud

Companies are already using cloud-based software for some enterprise and analytics applications, but
with Industry 4.0, more production-related undertakings will require increased data sharing across sites
and company boundaries. At the same time, the performance of cloud technologies will improve, achiev-
ing reaction times of just several milliseconds. As a result, machine data and functionality will increas-
ingly be deployed in the cloud, enabling more data-driven services for production systems. Even systems
that monitor and control processes may become cloud-based.
Vendors of manufacturing execution systems have started to offer cloud-based solutions (Rübmann
et al., 2015).
1.2.6.8 Additive Manufacturing

Companies have just begun to adopt additive manufacturing, such as 3-D printing, which they use mostly
to prototype and produce individual components. With Industry 4.0, these additive-manufacturing meth-
ods will be widely used to produce small batches of customized products that offer construction advan-
tages, such as complex, lightweight designs. High-performance, decentralized additive manufacturing
systems will reduce transport distances and stock on hand.
For instance, aerospace companies are already using additive manufacturing to apply new designs that
reduce aircraft weight, lowering their expenses for raw materials such as titanium.
1.2.6.9 Augmented Reality

Augmented-reality-based systems support a variety of services, such as selecting parts in a warehouse
and sending repair instructions over mobile devices. These systems are currently in their infancy, but in
the future, companies will make much broader use of augmented reality to provide workers with real-
time information to improve decision-making and work procedures.
For example, workers may receive instructions on how to replace a particular part as they are looking
at the actual system needing repair. This information may be displayed directly in their field of vision
using devices such as augmented-reality glasses.
Another application is virtual training. Siemens has developed a virtual plant-operator training mod-
ule for its COMOS software; the module uses a realistic, data-based 3-D environment with augmented-
reality glasses to training plant personnel to handle emergencies. In this virtual world, operators can
learn to interact with machines by clicking on a cyber-representation. They can also change parameters
and retrieve operational data and maintenance instructions.
1.2.7 Macro Perspective of Industry 4.0

The macro perspective of Industry 4.0, as shown in Figure 1.4, covers horizontal integration and the
end-to-end engineering dimension of Industry 4.0. This visualization is based on a strong product-
life-cycle-related point of view; in other words, cross-linked product life cycles become a central element
of the value creation networks (Stock and Seliger, 2016).
Smart Logis cs
Smart Factory
Manufacturing
Mining
Consumer
Raw Water Reservoir

Material
acquisi on Use and Smart Grid
Service
Cloud
Smart Home
Renewable Energies
Product Lyfe Cycle

End of Life
Energy Supply
Water Supply
FIGURE 1.4 Macro perspective of Industry 4.0. (From Stock, T. and Seliger, G., Opportunities of Sustainable
Manufacturing in Industry 4.0. 13th Global Conference on Sustainable Manufacturing—Decoupling Growth from
Resource Use, Institute of Machine Tools and Factory Management, Technische Universität Berlin, 10587 Berlin, Germany.
2212–8271© 2016 The Authors. Published by Elsevier B.V, 2016.)
From the macro perspective, horizontal integration is characterized by a network of value cre-
ation modules. Value creation modules are defined as the interplay of different value creation factors,
i.e., equipment, human, organization, process and product (Seliger et al., 2007). The value creation
modules, represented in their highest level of aggregation by factories, are cross-linked throughout
the complete value chain of a product life cycle, as well as with the value creation modules in value
chains of adjoining product life cycles. This linkage results in an intelligent network of value creation
modules covering the value chains of different product life cycles. This intelligent network provides
an environment for new and innovative business models and is thus leading to a change in business
models.
As shown in Figure 1.4, end-to-end engineering from the macro perspective is the cross-linking of
stakeholders, products and equipment along the product life cycle, beginning with the raw material acqui-
sition phase and ending with the end-of-life phase. The products, the various stakeholders such as cus-
tomers, workers or suppliers, and the manufacturing equipment are embedded in a virtual network and
are interchanging data in and between the phases of a product life cycle. This life cycle consists of the
raw material acquisition phase, the manufacturing phase—containing the product development, the engi-
neering of the related manufacturing system and the manufacturing of the product—the use and service
phase, the end-of-life phase—containing reuse, remanufacturing, recycling, recovery and disposal—and
the transport between all phases.
These value creation modules, i.e., factories embedded in this ubiquitous flow of smart data, will
evolve to become smart factories. Smart factories are already manufacturing smart products and are
being supplied with energy from smart grids and with water from freshwater reservoirs. The material
flow along the product life cycle and between adjoining product life cycles will be accomplished by
smart logistics. The stream of smart data between the various elements of the value creation networks is
interchanged via the cloud (Stock and Seliger, 2016).
Smart data are created by expediently structuring information from big data; smart data can be used
for knowledge advances and decision-making throughout the product life cycle (Smart Data Innovation
Lab., 2015). When smart factories use embedded CPS for value creation, the smart product can self-
organize its required manufacturing processes and its flow throughout the factory in a decentralized
manner by interchanging smart data with the CPS (Kletti et al., 2015).
A smart product contains information on its requirements for the manufacturing processes and manu-
facturing equipment. Smart logistics use CPS to support the material flow within the factory and between
factories, customers and other stakeholders. They are controlled in a decentralized manner according to
the requirements of the product. A smart grid using renewable energies dynamically matches the energy
generation of suppliers with the energy demand of consumers, e.g., smart factories or smart homes, by
using short-term energy storages for buffering. Within a smart grid, energy consumers and suppliers can
be the same (Stock and Seliger, 2016).
1.2.8 Micro Perspective of Industry 4.0

The micro perspective of Industry 4.0 presented in Figure 1.5 covers horizontal and vertical integration
within smart factories and is also part of the end-to-end engineering dimension.
As a value creation module at the highest level of aggregation, the smart factory contains various
value creation modules on lower aggregation levels, including manufacturing lines, manufacturing
cells or manufacturing stations. Smart factories will increasingly use renewable energies in addition
to the supply provided by the external smart grid (Berger et al., 2014). The factory will thus become
an energy supplier and consumer at the same time. The smart grid, along with the energy management
system of the smart factory, will handle the dynamic requirements of energy supply and feedback.
The supply of fresh water is another essential resource, requiring adequate water reservoirs (Stock
and Seliger, 2016).
Smart Factory
Consumer
Smart Grid
Outbound
Logiscs
Renewable Final
Water Energies Product
Reservoir
In-house Transport Value Creaon

Value
Supplies Creaon
Factors
Inbound
Module
Logiscs
Product
Manufacturing
Markeng and
Process
Supplier Sales
Cloud Service
Procurement
Technology Human
Development
Human Resource
Management
Infrastructure
Value Chain Acvies
FIGURE 1.5 Micro perspective of Industry 4.0. (From Stock, T., and Seliger G., Opportunities of Sustainable
Manufacturing in Industry 4.0. 13th Global Conference on Sustainable Manufacturing—Decoupling Growth from
Resource Use, Institute of Machine Tools and Factory Management, Technische Universität Berlin, 10587 Berlin, Germany.
2212–8271© 2016 The Authors. Published by Elsevier B.V, 2016.)
From the micro perspective, horizontal integration is characterized by cross-linked value creation
modules along the material flow of the smart factory and smart logistics. The in- and outbound
logistics to and from factories will be characterized by transport equipment able to agilely react
to unforeseen events, such as a change in traffic or weather, and to autonomously operate between
the starting point and the destination. The autonomously operating transport equipment such as
automated guided vehicles (AGVs) will be used for in-house transport along the material flow. All
transport equipment will interchange smart data with the value creation modules to achieve the
decentralized coordination of supplies and products with the transport systems. For this purpose,
the supplies and products will contain identification systems, e.g., radio-frequency identification
(RFID) chips or QR codes, to enable a wireless identification and localization of all materials in the
value chain (Stock and Seliger, 2016).
From the macro perspective, vertical integration requires the intelligent cross-linking of value creation
factors, including products, equipment and humans, along the various aggregation levels of the value
creation modules, from manufacturing stations via manufacturing cells, to manufacturing lines, up to the
level of the smart factory. This networking throughout the aggregation levels includes the cross-linking
of the value creation modules with the different value chain activities, e.g., marketing and sales, service,
procurement and so on. (Porter 2015).
The value creation module in a factory refers to an embedded CPS. The manufacturing equipment,
e.g., machine tools or assembly tools, use sensor systems to identify and localize the value creation fac-
tors, such as the products or the humans, and to monitor the manufacturing processes, e.g., the cutting,
assembly or transport processes. Depending on the monitored smart data, the applied actuators in the
manufacturing equipment can react in real time on specific changes in products, humans or processes.
The communication and the exchange of the smart data between the value creation factors, between the
value creation module and the transport equipment and between the different levels of aggregation and
value chain activities are executed via the cloud.
Table 1.1 provides an overview of the main trends and expected development in the value creation fac-
tors of Industry 4.0 (Stock and Seliger, 2016).
1.2.9 Industry 4.0 Components

1.2.9.1 Cyber-Physical Systems (CPS)
An important component of Industry 4.0 is the fusion of the physical and the virtual world (Kagermann
et al., 2014). This fusion is made possible by CPS. Cyber-physical systems are “integrations of com-
putation and physical processes. Embedded computers and networks monitor and control the physical
processes, usually with feedback loops where physical processes affect computations and vice versa”
(Lee et al., 2008). The development of CPS can be divided into three phases. The first generation of
CPS includes identification technologies such as RFID tags, which allow unique identification. Storage
and analytics have to be provided as a centralized service. The second generation of CPS is equipped
with sensors and actuators with a limited range of functions. In the third generation, CPS can store and
analyze data, are equipped with multiple sensors and actuators and are network compatible (Bauernhansl
et al., 2014). One example of a CPS is the intelligent bin (iBin) by Würth. It contains a built-in infrared
camera module for C-parts management; the camera determines the number of C-parts within the iBin.
If the quantity falls below the safety stock, the iBin automatically orders new parts via RFID. This allows
consumption-based C-parts management in real time (Günthner et al., 2014).
1.2.9.2 Internet of Things

According to Kagermann, the integration of the IoT with the Internet of Services (IoS) in the manu-
facturing process initiated the fourth industrial revolution (Kagermann et al., 2013). The IoT allows
“things” and “objects,” such as RFID, sensors, actuators and mobile phones, to “interact with each
other and cooperate with their neighboring ‘smart’ components, to reach common goals” (Giusto et al.,
2010). Based on the definition of CPS stated above, “things” and “objects” can be understood as CPS.
TABLE 1.1
Trends and Expected Developments in Value Creation Factors
Equipment Manufacturing equipment will be characterized by the application of highly automated machine
tools and robots. The equipment will be able to flexibly adapt to changes in the other value
creation factors; for example, robots will work together collaboratively with human workers
on joint tasks (Kagermann et al., 2015).
Human Jobs in manufacturing sectors are likely to become automated (Frey and Osborne, 2013). The numbers
of workers will thus decrease. The remaining manufacturing jobs will contain more knowledge work
and more short-term and hard-to-plan tasks (Spath et al., 2013). Workers increasingly have to monitor
automated equipment, are being integrated in decentralized decision-making, and are participating in
engineering activities as part of the end-to-end engineering.
Organization The increasing organizational complexity in the manufacturing system cannot be managed centrally
from a certain point. Decision-making will thus become decentralized. Decision-making will
autonomously incorporate local information (Kletti et al., 2015). The decision itself will be made
by the workers or by the equipment using methods from artificial intelligence.
Process Additive manufacturing technologies, also known as 3-D printing, will be increasingly deployed in
value creation processes, as the costs of additive manufacturing are rapidly dropping and speed and
precision are simultaneously increasing (Hagel III et al., 2015). This allows designing more
complex, stronger, and more lightweight geometries and the application of additive manufacturing
to higher quantities and larger scales of the product (Hagel III et al., 2015).
Product Products will be manufactured in a batch size according to the individual requirements of the
customer (Acatech 2015). This mass customization of the product integrates the customer as
early as possible in the value chain. The physical product will also be combined with new
services offering functionality and access rather than product ownership to the customer as
part of new business models (Hagel III et al., 2015).
Source: Stock, T. and Seliger, G., Opportunities of Sustainable Manufacturing in Industry 4.0, 13th Global Conference on
Sustainable Manufacturing—Decoupling Growth from Resource Use, Institute of Machine Tools and Factory
Management, Technische Universität Berlin, 10587 Berlin, Germany. 2212–8271© 2016 The Authors. Published
by Elsevier B.V, 2016.
Therefore, the IoT can be defined as a network in which CPS cooperate with each other through unique
addressing schemas. Application examples of the IoT include smart factories, smart homes, and smart
grids (Bauernhansl et al., 2014).
1.2.9.3 Internet of Services

The IoS enables “service vendors to offer their services via the Internet. […] The IoS consists of partici-
pants, an infrastructure for services, business models and the services themselves. Services are offered
and combined into value-added services by various suppliers; they are communicated to users as well as
consumers and are accessed by them via various channels” (Buxmann et al., 2009). This development
allows a new and dynamic variation of the distribution of individual value chain activities (Industry
4.0: Whitepaper FuE-Themen, 2015). It is conceivable that this concept will be transferred from sin-
gle factories to entire value-added networks in the future. Factories may go one step further and offer
special production technologies instead of just production types. These production technologies will be
offered over the IoS and used to manufacture products or compensate production capacities (Scheer
et al., 2013). The idea of the IoS has already been implemented in a project named SMART FACE
under the “Autonomics for Industry 4.0” program initiated by the German Federal Ministry for Economic
Affairs and Energy. The project has developed a new distributed production control for the automotive
industry, based on a service-oriented architecture. This allows the use of modular assembly stations that
can be flexibly modified or expanded. The transportation between the assembly stations is ensured by
AGVs. Both assembly stations and AGVs offer their services through the IoS. The vehicle bodies know
their customer-specific configuration and can decide autonomously which working steps are needed.
Therefore, they can individually compose the required processes through the IoS and autonomously navi-
gate through the production (Fraunhofer-Institut für Materialfluss und Logistik (IML), 2014).
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emplacement and the first of the outworks. In between was Potsdam
House, that no-man’s habitation into which, before the outskirts of
the wood had become definitely ours, sometimes the German patrols
had wandered and sometimes ours. We had had a working party
there the night before sand-bagging the shell-shattered walls and
making the place a defensive or a jumping-off spot, as one might
wish.
It was almost unthinkable that any German or Germans could
have reached it, for we had a listening patrol fifty yards ahead, but it
was just possible that a brave man might have avoided the patrol
and have done so. At the thought I made up my mind to move
forward, and took my revolver from my holster. My wits suddenly
became keen again, my lassitude left me, the sight of the outline of
your body on the frozen mud made me angry, wild.
I had only fifty yards to go, but I went as cautiously and silently as I
could. I did not intend to be killed if I could help it. I was out to
avenge, not to add another life to the German bag. I chose the spot
for each step with excessive care. I stopped and listened if my feet
were making too much noise on the frozen ground.
Then just as I was about twenty yards from my objective I heard a
sound. Stopping suddenly, I listened. Someone was talking in a
confused, halting sort of way. A snatch of conversation, a long
pause, and then another remark. The voice was so low that I could
not make out words, but I had the impression that it was not English
that was being spoken. The tone was uniform too, as though it were
not two people but one speaking—a curious, pointless monologue it
sounded like.
My heart was beating a little more quickly, my fingers clutched my
revolver a little more tightly. I knelt down, wondering what to do. The
voice came from the ruined Potsdam House, and if indeed a small
German patrol had got in there it seemed foolhardy to go alone to
meet them. On the other hand, it might be but one person there,
though why he should be talking thus to himself I could not imagine.
Anyhow, foolhardy or not, I was going to find out.
I moved forward therefore over the intervening yards slowly and as
quietly as might be. The voice broke off at times, then continued, and
each time that it stopped I halted too, lest in the stillness I should be
betrayed.
You remember the little pond at the side of the house, the pond
that has at the bottom of it, to our knowledge, a dead Bavarian and
an Argyll and Sutherland Highlander? At the edge of it I must have
stopped a full five minutes, lying flat upon my stomach and listening
to the intermittent sound of the voice. It was clearer now, low but
distinct, and at last I knew for a certainty that the words came from a
German throat. Occasionally a light laugh broke out which sounded
uncannily in the still air. Laughter is not often heard from patrols
between the lines, and I was puzzled and interested too.
A minute later I had clambered over the broken-down wall and
was in what we used to think must have been the drawing-room of
the house. Some time after this war is over I shall return and make
straight for this house. I want to see what it looks like in daytime. I
want to be able to stand in front of it and look out on the country
beyond. I’ve crawled into it a dozen times at night, I’ve propped up
its shelled, roofless walls with sand-bags, I’ve made a look-out
loophole in the broken-down chimney. I’ve seen dim outlines from its
glassless windows of hills and houses, but I am sure, quite sure, that
when I see it and the country beyond it in the full glare of a summer
sun I shall give a gasp of astonishment at what it is and what I
thought it was.
Once inside the house I paused no longer, but, my revolver ready,
my finger on the trigger, made straight for the spot from which came
the voice.
My revolver was not needed, Dick. In the furthest corner of what
we used to think must be the living-room, just near the spot where
we found that photograph of the latest baby of the family in its proud
mother’s arms and the gramophone record and the broken vase with
the artificial flowers still in it—you remember what trophies they were
to us—just there was the man. He was seated with his back propped
up against the sand-bags where the two walls of the room make a
corner, his legs angled out and his arms hanging limply down. It did
not take a second glance to see that I had to do with a badly
wounded German, but I took a look round first to make sure that
there were no others either in the shell of the house or near it. When
I had made certain, I returned to him and, putting my revolver within
my reach on the floor beside me, knelt down and examined the man.
He was plastered with mud, his cap was off his head, his breath was
coming in little heavy jerks, and on the blue-grey uniform, just below
the armpit on the right side, was a splash of blood mingling with the
mud.
What I had done for your dead body I did for his barely living one,
opened the tunic and by the aid of my electric torch—it was safe
enough in the angle of the walls—examined the wound. It did not
need a doctor to see that the man’s spirit was soon going to set out
on the same voyage of adventure as yours, but I did what I could. I
ripped my field dressing out of the lining of my coat and bound up
the wound. Then I took out my flask and poured some brandy into
his mouth. He had winced once or twice as I had dressed the wound
but had not spoken; I think he was scarcely conscious.
But the spirit revived him and in a minute or so his eyes slowly
opened and looked into mine. There was no such thing for him then
as enemy or friend. He was simply a dying man and I was someone
beside him helping him to die. His head turned over to one side and
he murmured some German words. You used to laugh at me, Dick,
for my hatred of the German language and my refusal to learn a
word of it, but I wished heartily I knew some then. I answered him in
English in the futile way one does. ‘That’s all right, old man,’ I said.
‘Feeling a bit easier now, eh?’
He looked at me fixedly for a moment or two and then suddenly
summed up the International situation in a phrase.
‘This damned silly war!’ he said.
The remark, made with a strong German accent, was delivered
with a little smile, and there was consciousness in his eyes. He
finished it with a weary sigh and his hand moved slightly and rested
on mine as I bent over him. There was a pool of water beside us in a
hole in the hearth and I dipped my not too clean handkerchief in it
and wiped some of the mud off his face. If I had felt any enmity
against him for killing you, it was gone now. A war of attrition those
beautiful war critics term it, and here was the attrition process in
miniature. He had killed you and you had killed him, an officer
apiece, and the Allies could stand the attrition longer than the
Germans. I knew the argument and I have not the slightest doubt it is
sound. In the meantime here was a man dying rather rapidly, very
weary and only too ready for the last trench of all.
I chatted to him and have no notion what I said. I dare say it is a
comfort to have, at the hour of death, a human being by you and a
human voice speaking to you. He was quite conscious, the water on
his face had refreshed him and had revealed clear-cut, aristocratic
features, that had nothing bestial or cruel about them. Just as I had
thought about you, so I thought about him. Waste! waste! I felt as
though I had met him before, and certainly I knew his type if not the
individual. Perhaps too, sitting opposite one another week after
week, in trenches two hundred yards apart, the spirits bridge a gap
the bodies cannot. I do not know, I do not greatly care.
His voice was feeble, but he seemed to wish to speak to me and
his English was that of an educated man, precise and at times
idiomatic. He accounted for that almost in his first words.
‘I have been in England on long visits, twice, three times,’ he said.
‘I like England. Germany and England are worth dying for. Also I am
Saxon, and Saxony is a great country. Anglo-Saxons, is it not?’
‘Anglo-Saxons,’ I repeated lightly. ‘We have the same blood in us.’
‘Good blood, too,’ he said, glancing down at the little splash of it
on his tunic. ‘A pity to spill so much. Will you bathe my face again, it
helps me, and I would like to die clean.’
‘Don’t talk nonsense,’ I said. ‘To-morrow morning you will be in our
lines—another man.’ He did not answer for a moment, then he said,
almost with humour in his voice, ‘That is quite true, to-morrow
morning I will surely be in your lines—a dead man.’
Again there was silence between us. He spoke the truth and knew
that I knew it. His arm moved: the fingers of his hand pawed
aimlessly at the rubble by his side. I half rose and told him that I was
going to our breastworks to bring some bearers with a stretcher.
He shook his head and spoke in a voice almost strong. ‘No,
please, no! You shall go in half, in a quarter of an hour. I am quite
easy here. In no great pain. Death is, sometimes, quite easy. I would
like you to stay if you will.’
‘Of course I will stay if you wish.’
‘Yes. Also I would like to speak to you ... I ... I ... killed ... one of
your officers ... just now?’
‘Yes,’ I said.
‘I ... saw him fall. As he fell he fired at me too. I am sorry I killed
him. Will you tell his ... his ... people so? And tell them, too, that it is
just war ... silly, wasteful war. He was a soldier, was he, by
profession I mean?’
‘Yes, a soldier.’
‘Then it is his death ... I am only a soldier as all of us are soldiers.
In peace I make music, compose you call it. Music is better than
war.’
‘Far better,’ I answered grimly enough.
‘If I had lived I would have written great things. I had vowed it. I
had in my head ... I have it still ... a ... wonderful ballet. It would have
been finer than Petrouchka—as great as Coq-d’Or. And the ballet of
our enemies, the Russians, would have performed it.... Enemies!
how silly it is.’ He smiled.
My heart beat a little faster. This was madness, sheer madness,
for us to be discussing music and the Russian ballet on the
battlefield and with him dying. But at the words ‘Coq-d’Or’ my
memory had suddenly stirred, and I carried on the conversation
eagerly.
‘Coq-d’Or is wonderful, isn’t it?’ I said. ‘Where have you seen it?’
‘Where have I not?’ he answered. ‘In Moscow, Berlin, Paris, in
London. It is great, astonishing.’
‘In London?’
‘But a short time ago—just before the war. I ... I ... had a friend. I
was staying with him. He, too, was a soldier. I forget in what
regiment. I was not interested in armies then.’ He stirred uneasily
and partially turned over on his side. I put my arm beneath him,
moistened his lips with the water. He sighed and began to wander in
his talk, the words German, beyond my comprehension. Yet one kept
recurring that told me all, everything. He must not, should not die yet!
Only for a minute or two did his delirium last. Then his senses
returned and quite suddenly he pressed my hand, and though his
voice was fainter the words were distinct and spoken very slowly as
though he wished to be sure I understood.
‘I ... I want you to do something for me.... I am sure you will. We
are both gentlemen....’ His hand moved to his breast and he made
as if to take something from his tunic.
‘In the pocket of my coat, inside, there is a little leather case.
Inside that ... a photograph of a lady, of an English lady too.’ (Oh!
little world, O narrow little world!) ‘It has been with me through the
war. I dare not and would not have shown it to one of my
comrades.... When I die I want you to take it out and send it to the
Honourable Richard Belvoir. He was a lord’s son, my friend, and the
photograph is of his sister. I ... she did not know it, you
understand?... I loved her.’
Did she not? I wonder. My thoughts rushed back again to Drury
Lane, to the crowded house, to the little quartette of us, you, I, the
young Saxon, and Peggy, standing together in the foyer during the
entr’acte. Every one of her twenty years had added something to her
beauty, and as you and I strolled away and left the other two
together, I remember I wondered if we were making a proper division
of the quartette and if it was quite fair to the Saxon to leave him to
such an inevitable result. I spoke my thought to you and I recall your
laughing comment.
Of course I promised to perform the simple duty the dying man
gave me. I was glad he had not recognised me. It made the duty
easier. Once I had spoken the promise he thanked me and seemed
contented. He had little strength left and the end was very near. His
body slipped lower down, he tried to speak no more—his breath
came more feebly.
The next day we buried you and him side by side in the little
clearing at the back of the road. In your pocket is the little leather
case with your sister’s photograph in it. I have given it to you as I
was asked to do. The crosses in the clearing daily are added to in
number. Some day your sister will come to visit the spot. I am writing
to her telling her of your death and of the Saxon’s too. But of how
closely they hung upon each other I shall not speak. It is enough that
she should think a strange chance brought you together in the same
part of the line, that death came to both of you and that you now lie
side by side.
Chance! What a word it is. It explains nothing, it evades all. I can
imagine you, knowing now so much more than we do, smiling at the
idea of such a thing as coincidence. I have said that I am weary
beyond words of this war. I am sure you and the Saxon were weary
of it too. I am not guessing, for I am in some way absolutely sure that
the twin shots which disturbed the silence of the night were
mercifully winged; that you and he, who must have had more in
common than I knew, were sending each other unwittingly the final
gift of good fellowship.
Good-night. I am sitting in the dug-out you and I shared. The
sound of the artillery has died down. The divisional guns have fired
their final salvos at the enemy’s cross roads and dumps. The
Germans for once have not even troubled to reply. Pip and Dennis
are out with working parties. The new machine-gun emplacement on
the right of Madden’s mound, which you were so anxious to have
finished, is done. Whatever you may say, I am still not sure that it is
rightly placed. Perhaps you know that it does not matter where it is
placed!
Some day, somewhere, we shall meet. Till then good-bye, Dick.
Yours ever
Philip.
THE PRAGMATIC PRINCIPLE: AN
APPLICATION.
It was said of the historic centipede that he was so embarrassed
by his multitude of legs that locomotion became impossible. Similarly
perhaps it may be said of Pragmatism that it suffered principally from
the numerous formulations of its principles, all of which sought to
explain it, but many of which left it obviously unexplained. Perhaps
that is the reason why the vogue which it had seven years ago,
following upon Professor James’ brilliant ‘popular lectures,’ was
scarcely maintained. On the other hand, this was probably foreseen
by some of the most loyal pragmatists. As one said of it, ‘If
Pragmatism is going to live and give life, it will be by its spirit and not
by any magic contained in pragmatic dicta.’ And it will be generally
agreed that as a contribution to the thought of the twentieth century,
it has lived and has perhaps quickened other established modes of
thought and feeling. ‘On the pragmatic side,’ writes Professor James,
‘we have only one edition of the universe, unfinished, growing in all
sorts of places, especially in the places where thinking beings are at
work.’
Meanwhile many people were at work endeavouring to compress
the pragmatic point of view into a formula. The most generally
accepted definition stated that it represented theory as subordinate
to practice. Another popular formula gives it as the doctrine that the
truth of an assertion is decided by its consequences. And again—
this with the authority of Dr. Schiller—‘the making of truth is
necessarily and ipso facto also a making of reality.’ But inasmuch as
none of these definitions cover the whole ground, and as we are
here concerned with a modern and vital application of the pragmatic
issue, it may perhaps be worth our while to retrace the history of the
matter in the first place to its source, craving the patience of the
reader meanwhile.
In the year 1878, at Balliol, there were three men who were
destined to exercise strong influence upon the intellectual life of their
generation: Benjamin Jowett, the Master; Nettleship, the tutor; and
Thomas Hill Green. ‘I do not forget,’ says Professor Wallace, in
speaking of the last-named in the preface to his Hegel, ‘what I and
others owe to him,—that example of high-souled devotion to truth,
and of earnest and intrepid thinking on the deep things of Eternity.’ In
his own day perhaps Green was not greatly understood. He was
known as the eccentric College tutor; a lecturer in metaphysics (and
dry at that) ‘Obscurum per obscurius,’ said a witty undergraduate,
though of course a witty undergraduate will say anything. Moreover
an idealist, though a member of the City Council; a man of dreams,
but a pioneer of evening schools for working men. Such was Green
as Oxford knew him, but it is—briefly—with his position in philosophy
that we are at the moment concerned.
Like all English idealists,—like Hegel also and the German School,
—he built upon the rough foundations once laid down by the
philosophers of Asia Minor. The Greeks had seen one thing plainly;
that the spiritual entities of Science, Art, morality, or religion were of
intrinsic value in themselves as expressions of the self-conscious
spirit; but the one thing that lay hidden in the womb of Christianity
they lacked, the conception of human brotherhood. So the
philosophy of the later centuries, while still reaping where the ancient
world had sown, has included the developed ideals of citizenship as
well as the life of co-operation made possible therein. When we find
one of Green’s works headed ‘Popular Philosophy in its Relation to
Life,’ we realise the gist of his teaching. He was in fact a practical
mystic, which, as Lord Rosebery said of Cromwell, is a ‘formidable
combination.’ To Green, the most solid and practical things about a
man were the ideals which he put into practice. That in his
philosophy was the one permanent use of any philosophical idea; its
working power as a basis for human effort. It will be seen that here
we are not very far off from those ‘thinking beings at work’ in the
adventurous world of the pragmatist.
The idealism of Green was of a robuster type than some other
kindred systems. He never maintained that we as human beings
were unnecessary to the working out of the Divine plan. He never
denied that by the application of human reason new possibilities may
be brought to light, and that out of the treasure-house of the Eternal
may be brought forth things at once old and new. And so,
consistently, when we consider the personality of this man who was
so vivid a directing force in thought and action, we find at the one
end a professor of moral philosophy, and at the other the town
councillor and worker in the slums.
Thus far Green and his influence in the English schools of 1878.
But in that same year, in an American journal, there appeared an
article by Charles Sanders Pierce, concerning ‘our ideas and “how to
make them clear,”’ and entitled ‘The Principle of Pragmatism.’
The article did not attract very great attention on this side of the
water. English scholars are apt to be a little shy of the swift and
arresting methods of the American; and perhaps if pragmatism had
remained the original contribution of Charles Sanders Pierce, it might
have sunk into oblivion. But, as everybody knows, it found its ‘vates
sacer’ in after years in the late Professor James of Harvard, who
ushered it sixteen years ago, with some pomp and circumstance,
into the world of English philosophy. Meanwhile, some apt maker of
epigram, considering the works of Professor James and his brilliant
brother, summed them up as ‘the philosopher who writes novels, and
the novelist who writes psychology.’
To do him justice, James said at the outset that pragmatism was
no new thing. He took Aristotle indeed to his ancestor, and claimed
relationship with the English idealists and even with Hume. He then,
by virtue of his vivid and stimulating style, achieved for his subject a
certain popularity, and a small following began to arise. When,
however, people had learnt to speak of the British pragmatists, they
discovered that the other people who spoke of the American
pragmatists did not always seem to find their systems identical. And
time has emphasised this difference. The pragmatism imported from
America by Professor James has remained what it always professed
to be—a method,—and, withal, a gentle and peaceable method,—
not only of airing its own ideas, but of persuading everybody else
that just as M. Jourdain had spoken prose all his life without knowing
it, so they, too, had been pragmatists all their lives. The method is,
perhaps, at times a little superior, and at times a little irreverent; nor
can it clearly claim to have produced a ‘philosophy’ as such. It is, in
truth, as its votaries have claimed, a spirit and an attitude towards
philosophical problems and towards life. As such it would seem to be
a characteristic product of the Anglo-Saxon genius which is
essentially practical and values things for their use. ‘In pragmatic
principles,’ says James, ‘we cannot reject any hypothesis if
consequences useful to life flow from it.’ And elsewhere, ‘Beliefs are
rules for actions.’ And again, ‘An idea is true so long as it is profitable
to our lives to believe it.’ In all these cases the act, the consequence,
the deed are placed, so to speak, in the predicative position. The
whole force of the sentence is concentrated upon the consequence,
the deed. ‘The proof of the pudding,’ says our homely proverb, ‘is in
the eating.’ And we have been reminded that ‘Honesty is the best
policy’ from our copy-book days. Here, however, there is a difference
between the established ethic—whether idealistic or religious—and
the pragmatic view. Honesty, it seems, would win the ‘pragmatic
sanction’ because of its results:—it ‘works’ satisfactorily. Therefore it
is ‘true.’ There is a shifting of attention from the intrinsic beauty of
honesty as a virtue to its consequences; from its moral value to its
face value; from the ideal to the actual and empirical. The impartial
observer may come to the conclusion that after all the inquiry comes
to the same thing. Honesty has been twice blessed: by the pragmatic
sanction of its results, and by the moral sanction for those who
identify the virtue with the moral imperative of religion. Nevertheless,
this attitude of pragmatism is an exceedingly interesting one, and its
application to human life and activities is undeniable. It is, in
essence, the doctrine of the survival of the fittest, carried into the
field of philosophy. The test of an idea, of an ideal, of a ‘movement’
is its working. If it worked well, it was fitted to survive; it was, at any
rate, ‘true’ for the epoch wherein it did survive or flourish. On the
other hand, a thing cannot be judged until it is tried. It must be known
by its results. There must be evolution, shifting, experiment. ‘The
universe is always pursuing its adventures’; and truth is always ‘in
the making,’—especially where the ‘thinking beings’ are getting to
work. Which brings us to the application aforesaid. For assuredly
among all the many ‘movements’ which have stirred the surface of
the body politic during the last forty years, the so-called ‘woman’s
movement’ may in its deeper aspects lay claim to the ‘pragmatic
sanction.’ In it undoubtedly many thinking and adventurous persons
have been at work. And there are passages in James’ book
speaking of ‘our acts as the actual turning places in the great
workshop of being where we catch truth in the making,’ to which the
hearts of many of our modern women doctors and nurses will
respond. On the other hand, the attitude of the many who at every
stage have sought to oppose a professional career for women has
never been more aptly summed up than in the words of the
pragmatist: ‘They are simply afraid: afraid of more experience, afraid
of life.’
A few years ago the Minority Report of the Poor Law Commission
published a weighty record of the usefulness of women in municipal
work, suggesting further outlets for their energies; but the writers
certainly did not foresee the astonishing influx of female labour into
the many departments of public service consequent upon the
exigencies of the present time. On the face of it we must own that
some of these occupations seem little suited to the worker’s
capacity. One can imagine the chorus of disapproval that would have
risen from the ranks of the acutely feminine if such innovations as
women postmen, ’bus conductors, and window-cleaners had offered
themselves a few years ago. Even now it is probably only the most
seasoned philosophers who regard them with perfect equanimity; the
rest comfort themselves with the reflection that they are the
unnatural products of an abnormal time: a sort of epiphenomena
thrown up from an underworld of chaos and destined to disappear
again in the natural course of things. There is little doubt that this will
be so in the end. Post delivery and window cleaning will scarcely
become common occupations for girls any more than it will be usual
for them to go into the trenches in the firing line, as some gallant
Russian women have been doing in order to succour the starving
Poles. All these things are exceptional, and exceptional things are
generally the outcome of a strong emotion. As Professor Jebb has
observed, ‘The feeling that covers a thousand square miles must, we
instantly perceive, be a strong feeling.’ We have had many
opportunities for such observation during the present war, but
nowhere more emphatically than among women. In adapting
themselves to the requirements of social service they have taken to
heart that excellent advice of Mr. Wells: they have ‘flung themselves
into their job, and have done it with passion.’ But now after
eliminating the exceptional, after allowing moreover for a natural ebb
in the warm flowing tide of patriotic emotion, there undoubtedly
remains a record of efficiency which is destined to have far-reaching
results. The women whose former status in the industrial world was
so precarious and unsatisfactory have now been swept into that
world in increasing thousands because the industries of the country
could not be maintained without them. The Government appeal of
1915 offered a curious comment upon the popular axiom that the
woman’s ‘sphere is the home.’ In the face of the wholesale slaughter
of the bread-winners, and the consequent invitation to all unoccupied
women to rise to the country’s need, this unimpeachable motto has a
pathetic look like that of a picture turned face to the wall. Pathetic
because it was always true, even obviously true; but the relativity of
truth makes so many isolated truths look out of focus. Anyhow, the
fact remains that, in this universe which just now is ‘pursuing its
adventures’ at a remarkably accelerated pace, women have been
called out of their homes into very unexpected places; and it is with
the result that we are just now especially concerned. Evidence at
first hand is not far to seek. It comes from all quarters, from the
magnificently organised hospitals of the Scottish women in Serbia,
from the railway companies, from the Women’s Service Aircraft
Department, from the engineers’ shops in some of the industrial
centres, and from the munition factories themselves. As to the
hospitals, it is doubtful whether the public entirely realise the extent
of the work that has been done.
At the Knightsbridge Exhibition in November 1915, one of the most
interesting exhibits was that representing the Anglo-Russian hospital
which, with its eight surgeons and thirty nurses, and complete unit of
bedding and outfit, was sent as a gift to Petrograd; and several
delightful articles have been written about the beautiful old Cistercian
Abbey in Northern France which was turned into a hospital and
staffed entirely by women for the necessities of the war. Of these
institutions there has been an ever-increasing number both at home
and abroad; one of the Suffrage societies has to its credit the
financing and equipment of eight hospital units in France and Serbia.
But all this is still the acknowledged sphere of women. As nurses
and even doctors they are accepted as a matter of course by a
generation which has scarcely heard of the criticisms once thrown at
Florence Nightingale. It is in the other departments of social service
that they are challenging the public estimates of their capacity, and
here the facts must speak for themselves. Some of the factories
have published statistics regarding their output of work; and the
following comparisons were made in one of the engineers’ shops of
the Midland Railway Company.
Average percentage earned by men on Group No. 17 by the week,
42·5.
Average percentage earned by women on Group No. 17 by the
week, 49·6.
The two hundred women thus employed had only lately displaced
the male workers, and Sir Guy Granet, manager of the Midland
Railway, remarked that ‘the efficiency of women in certain directions
had been a revelation to him.’ Something must be added for the
absence of any organised ‘restrictions of outputs,’ but in fact there
has been a reiterated note of surprise in most of the testimonials to
the women workers’ capacity, as though we were being faced with a
new phenomenon, uncaused and spontaneous, instead of the
outcome of underlying forces in the vanished world before the war.
‘I am not sure,’ wrote Mr. A. G. Gardiner in the Daily News, ‘that
the future will not find in the arrival of women the biggest social and
economic result of the war.... Woman has won her place in the ranks
beyond challenge.’
In Manchester, last June, one of the great attractions was the
ploughing demonstration made by women ‘on the land.’ Lancashire
criticism was sparing of words, but here again it was appreciative.
‘Ay, they frame well,’ said the men. The same results are recorded
from clerks’ offices, from the tramcars, from motor driving, and,
perhaps most unexpectedly, from the factories where women are in
charge of delicate and intricate machinery. In all these branches of
manual and intellectual labour, the women workers have risen to
their opportunities and have made good. The comment by Punch
gave to the general view its own characteristic expression.
‘Whenever he sees one of the new citizens or whenever he hears
fresh stories of their ability Mr. Punch is proud and delighted. “It is
almost worth having a war,” he says, “to prove what stuff our women
are made of. Not,” he adds gallantly, “that it wanted proof.”’
On the other hand, it must, we think, be admitted that proof was in
fact the one essential thing which the world needed. On November
2, 1915, the Prime Minister, referring in the House of Commons to
the death of Nurse Cavell, said:
‘She has taught the bravest men among us a supreme lesson of
courage.... In this United Kingdom there are thousands of such
women, and a year ago we did not know it.’
At first sight the saying was a strange one, for the supreme crises
of life are commonly those which call forth the highest response in
human nature; but on reflection the words are just: we do not
practically ‘know’ what we have not had an opportunity of proving.
We had to wait for the experience furnished by a national crisis in
opening the gates of industry to over three hundred thousand new
recruits, bringing up the total of women workers, according to Mr.
Sidney Webb’s calculation, to six million and a half: figures and
results which forced the Prime Minister at a later date into the
acknowledgment that women’s claim to the privileges of full
citizenship was now ‘unanswerable.’
‘They have been put to many kinds of work,’ said Mr. Webb,
‘hitherto supposed to be within the capacity of men only, and they
have done it on the whole successfully.’
Now, both these figures and these achievements must surely be
recognised as a result of the trend of the last forty or fifty years.
Without long preparation it could not have sprung into being. As the
ripple is sustained by the weight of ocean, so the self-respecting
work of the modern woman in the higher department of service has
only been made possible by the education and tradition at her back;
while even the factory worker has imbibed a sense of responsibility
which is not the mark of the unfree. The new type is therefore, as is
usual in the evolutionary process, found to be suited to its age. It
was not enough that the women of the country should be, as always,
eager to help, willing for sacrifice: it was necessary that they should
have had the training in work, in business habits, and in self-control
which gives to inherent good-will its market value.
Briefly then, we see in this record of women’s service, which is
coming as a surprise to many, an instance wherein the pragmatic
philosophy has come to its own. In the early days of the Crimean
War the people who were ‘afraid of experience, afraid of life,’ were
shocked at the initiative of Florence Nightingale. No really ‘nice’
women, they said, would want to go out to nurse soldiers. The
incredible insults heaped upon the first women doctors are
remembered by many to-day. The advocates of the ‘movement’ were
charged at every new departure with the desire to change the
character of woman herself, whereas all that has been changed is
her position in the national life; and that change has undoubtedly
been rendered more conspicuous since the war.
To all reasonable persons, whether pragmatists or not, the record
of experience is worth a great deal of theory. There are many
cautious but fair-minded people who have regarded women’s
capacity for difficult administrative offices as unproven until now.
There are many more who would have hastily judged them unfit for
the responsible work which they are doing in the aircraft and
munition departments. For all such there is a message in the
principle of pragmatism. ‘It preserves,’ says its genial apologist, ‘a
cordial relation with facts.... The pragmatist turns towards
concreteness and adequacy, towards facts, towards action and
towards power.... That means the open air and possibilities of nature
as against dogma, artificiality and the pretence of finality in truth.’
And Truth, to quote again from a former passage, can just now be
vividly observed ‘in the making’ in the great workshop of the world.
She can be caught in the grip of the philosopher, and submitted to
the most searching inquiry which the mind of man can desire: she
can be traced through the past, as Green desired to trace her, to her
eternal source in the ‘ideas’ which are a ‘basis for human effort’: she
can be brought to the bar of Reality. In this way, it may be added, the
method of Pragmatism may exercise a wholesome bracing effect
upon one’s thought. It clears away the cobwebs of abstractions; it
watches Truth at its daily work in particulars whence only careful
generalisations should be drawn. It brings all theory to the test of
experiment. And finally recurring to our starting point, it lays stress
upon the power of every idea in action, insisting upon the vital
correlation of thought and deed. For in the words of the old Greek
dramatist,[5] ‘The word and the deed should be present as one thing,
to dispatch that end whereto the counselling mind moveth.’
Leslie Keene.
FOOTNOTES
[5] Aeschylus.
THE BRITISH RED CROSS IN ITALY.
by lewis r. freeman.
For the first time in a fortnight there had been a few hours of really
good visibility, and, as a consequence, the artillery of both sides
were endeavouring to make up for lost time with an increase of
activity, just as a pet Pomeranian begins to cut capers the instant it is
freed from its restraining leash. For some reason, a goodly share of
the Austrian fire appeared to be directed to the vicinity of a certain
road along which we had to pick our way in returning from an
advanced Italian position we had just visited.
A road under heavy gun fire is not a comfortable place to be at
large upon on any of the battle fronts of Europe, and least of all that
of the stony Carso, where flying rock fragments increase the
casualties three and four-fold over what they would be if the hurtling
shells were burying themselves in eight or ten feet of soft earth
before accumulating enough resistance to detonate their charges of
high explosive. The ‘cave-men’ who held the plateau had all
disappeared into their burrows on the ‘lee’ side of the dolinas or sink-
holes which pit the repulsive face of the Carsic hills, but here and
there along the road there were evidences—mostly pools of blood
and scattered kit—that some whom recklessness or duty had kept
from cover had met with trouble. Plainly there was going to be work
for the Red Cross, and one of the first things I began to wonder
about after we had passed on to the comparative shelter of a side-
hill, was whether or not they would see fit to risk one of their precious
ambulances up there on the shell-torn plateau where, from the rattle
and roar, it was evident that, in spite of the failing light, things were
going to be considerably worse before they began to be better.
Picking up our waiting car in the niche of a protecting cliff, we
coasted down across the face of a hillside honeycombed with dug-
outs to the bottom of a narrow valley, a point which appeared, for the
time being at least, the ‘head of navigation’ for motor traffic. Here we
found ourselves stopped by the jam that had piled up on both sides
of a hulking ‘210’ that was being warped around a ‘hairpin’ turn.
Suddenly I noticed a commotion in the wriggling line of lorries, carts,
and pack-mules that wound down from the farther side of the jam,
and presently there wallowed into sight a couple of light ambulances,
plainly—from the purposeful persistence with which they kept
plugging on through the blockade—on urgent business.
Now the very existence of a jam on a road is in itself evidence of
the fact that there is an impasse somewhere, and until this is broken
the confusion only becomes confounded by any misdirected
attempts to push ahead from either direction. But the ambulance is
largely a law unto itself, and when it signals for a right-of-way there is
always an attempt to make way for it where any other vehicle (save,
of course, one carrying reinforcements or munitions at the height of a
battle) would have to wait its turn. Mules and carts and lorries
crowded closer against each other or edged a few more precarious
inches over the side, and by dint of good luck and skilful driving, the
two ambulances finally filtered through the blockade and came to a
halt alongside our waiting car on the upper end. Then I saw that their
cool-headed young drivers were dressed in khaki, and knew, even
before I read in English on the side of one of the cars that it was the
gift of some Indian province—that they belonged to a unit of the
British Red Cross.
‘Plucky chaps those,’ remarked the Italian officer escorting me.
‘Ready to go anywhere and at any time. But it’s hardly possible
they’re going to venture up on to the plateau while that
bombardment’s going on. That’s work for the night-time, after the
guns have quieted down. But there is one of them coming back now;
perhaps they’re going to discuss the situation before going on.’
I leaned out to eavesdrop on that momentous debate, and this is
what I heard:
‘Jolly awful tobacco this,’ said the one on the ground, after filling
his pipe from his companion’s pouch.

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Handbook of Industry 4.

Maintenance Costs and Life Cycle Cost Analysis 1st

Robots, Drones, UAVs and UGVs for Operation and

Digital Manufacturing and Assembly Systems in Industry

A Roadmap to Industry 4.0: Smart Production, Sharp

Enabling Technologies for the Successful Deployment of

Industry 4.0-Challenges, Trends, and Solutions in

Information Systems for Managers: With Cases, Edition

Implementing Industry 4.0: The Model Factory as the Key

Diego Galar Pascual

© 2020 by Taylor & Francis Group, LLC

No claim to original U.S. Government works

Printed on acid-free paper

International Standard Book Number-13: 978-1-138-31629-4 (Hardback)

and the CRC Press Web site at

1. Fundamentals of Industry 4.0.......................................................................................................... 1

2. SMARTness and Pervasive Computing........................................................................................ 47

3. The Industry 4.0 Architecture and Cyber-Physical Systems..................................................... 79

4. Cloud Computing, Data Sources and Data Centers.................................................................. 119

5. Big Data Analytics as Service Provider...................................................................................... 155

6. IoT and the Need for Data Rationalization................................................................................. 189

7. OPERATOR 4.0............................................................................................................................ 239

8. Cybersecurity and Risk................................................................................................................ 287

9. Industry 4.0 across the Sectors.................................................................................................... 349

Retrospectively looking at previous revolutionary development of manufacturing from its beginning

• General support in defining development strategies and policies of its realization,

1.2.12 The Way Forward.............................................................................................................. 21

Figure 1.1 Main technologies of Industry 4.0...................................................................................... 8

Figure 1.12 Repository of the digital factory........................................................................................ 29

Table 1.1 Trends and expected developments in value creation factors................................................16

1.2 Industry 4.0

1. Horizontal integration across the entire value creation network,

1.2.1 Definition of Industry 4.0

1.2.2 What Is Industry 4.0?

1.2.2.1 Industry 4.0—What Is It?

• Flexible production: Many companies use a step-by-step process to develop a product. By

1.2.2.2 Talking about a Revolution: What Is New in Industry 4.0?

1.2.2.3 On the Path to Industry 4.0: What Needs to Be Done?

1.2.3 Key Paradigm of Industry 4.0

1.2.4 Industry 4.0 Conception

1.2.4.1 Five Main Components of Networked Production

1.2.5 Framework of Industry 4.0: Conception and Technologies

• Integration and digitalization of horizontal and vertical value chains,

The new connected technologies are shown in Figure 1.1.

1.2.6 Nine Pillars of Technological Advancement

Big Data Internet of

Augmented INDUSTRY 4.0

Augmented Horizontal and ver cal

Addi ve The Industrial

The Cloud Cybersecurity

1.2.6.1 Big Data and Analytics

...to fully integrated data and

Machine to machine and machine to human interacon

1.2.6.2 Autonomous Robots

1.2.6.4 Horizontal and Vertical System Integration

1.2.6.5 Industrial IoT

1.2.6.7 The Cloud

1.2.6.8 Additive Manufacturing

1.2.6.9 Augmented Reality

1.2.7 Macro Perspective of Industry 4.0

Raw Water Reservoir

Product Lyfe Cycle

1.2.8 Micro Perspective of Industry 4.0

Figure 1.1 Main technologies of Industry 4.0...................................................................................... 8

Machine to machine and machine to human interacon

In-house Transport Value Creaon

Value Chain Acvies