through an approach based on social partnership. Its 
strong industrial base, successful software industry 
and know-how in the field of semantic technologies15
mean that Germany is extremely well-placed to implement Industrie 4.0. It should be possible to overcome 
the current obstacles, such as technology acceptance 
issues or the limited pool of skilled workers on the labour market. However, it will only be possible to secure 
the future of German industry if all the relevant stakeholders work together to unlock the potential offered by 
the Internet of Things and Services for manufacturing 
industry.
Since 2006, the German government has been promoting the Internet of Things and Services16 under its 
High-Tech Strategy. Several technology programmes 
have also been successfully launched. The IndustryScience Research Alliance is now progressing this initiative at a cross-sectoral level through the Industrie 4.0 
project. The establishment of the Industrie 4.0 Platform 
with a Secretariat provided jointly by the professional 
associations BITKOM, VDMA and ZVEI was the logical 
next step in its implementation. The next task will be to 
produce R&D roadmaps for the key priority themes. 
Securing the future of German manufacturing industry – this is the goal that the partners in the Industrie 4.0 Platform have set themselves. The Platform invites all the relevant stakeholders to continue exploring 
the opportunities provided by Industrie 4.0 so that together we can help to ensure successful implementation of its revolutionary vision.                                                                                                                                                                                                                           2 The vision: 
Industrie 4.0 as part of 
a smart, networked world 
Industrie 4.0 19
2 The vision
2 The vision: Industrie 4.0 as part of a 
smart, networked world 
In a “smart, networked world”, the Internet of Things 
and Services will make its presence felt in all of the key 
areas.1
 This transformation is leading to the emergence 
of smart grids in the field of energy supply, sustainable 
mobility strategies (smart mobility, smart logistics) and 
smart health in the realm of healthcare. In the manufacturing environment, vertical networking, end-to-end engineering and horizontal integration across the entire 
value network of increasingly smart products and systems is set to usher in the fourth stage of industrialisation – “Industrie 4.0”. 
Industrie 4.0 is focused on creating smart products, 
procedures and processes. Smart factories constitute 
a key feature of Industrie 4.0. Smart factories are capable of managing complexity, are less prone to disruption and are able to manufacture goods more efficiently. 
In the smart factory, human beings, machines and resources communicate with each other as naturally as in 
a social network. Smart products know the details of 
how they were manufactured and how they are intended to be used. They actively support the manufacturing 
process, answering questions such as “when was I 
made?”, “which parameters should be used to process 
me?”, “where should I be delivered to?”, etc. Its interfaces with smart mobility, smart logistics and smart 
grids will make the smart factory a key component of 
tomorrow’s smart infrastructures. This will result in the 
transformation of conventional value chains and the 
emergence of new business models.2
 
Industrie 4.0 should therefore not be approached in 
isolation but should be seen as one of a number of key 
areas where action is needed. Consequently, Industrie 
4.0 should be implemented in an interdisciplinary manner and in close cooperation with the other key areas 
(see Fig. 2).
2.1 Shaping the vision of Industrie 4.0
Achieving the paradigm shift required to deliver Industrie 4.0 is a long-term project and will involve a gradual 
process. Throughout this process, it will be key to ensure that the value of existing manufacturing systems is 
preserved. At the same time, it will be necessary to 
come up with migration strategies that deliver benefits 
from an early stage (see also Chapters 3 and 5.4). Nevertheless, innovations constituting a quantum leap may 
arise in some individual sectors.
Smart Grids
Smart Mobility Smart Logistics
CPS
Smart Buildings
Internet of Things
Internet of Services
Smart Product
Figure 2: 
Industry 4.0 and 
smart factories as 
part of the Internet
of Things and Services
Smart Factory
20 Industrie 4.0
2 The vision
If German industry is to survive and prosper, it will need 
to play an active role in shaping this fourth industrial 
revolution. It will be necessary to draw on the traditional strengths of German industry and the German research community: 
•	 Market leadership in machinery and plant 
manufacturing
•	 A globally significant cluster of IT competencies
•	 A leading innovator in embedded systems and 
automation engineering 
•	 A highly-skilled and highly-motivated workforce
•	 Proximity to and in some cases close cooperation 
between suppliers and users
•	 Outstanding research and training facilities
In implementing Industrie 4.0, the aim is to create an 
optimal overall package by leveraging existing technological and economic potential through a systematic 
innovation process drawing on the skills, performance 
and know-how of Germany’s workforce. Industrie 4.0 
will focus on the following overarching aspects:
•	 Horizontal integration through value networks 
•	 End-to-end digital integration of engineering across 
the entire value chain
•	 Vertical integration and networked manufacturing 
systems 
These aspects are considered in more detail in Chapter 3 in the context of the dual strategy. 
2.2 What will the future look like under 
Industrie 4.0?
Industrie 4.0 will deliver greater flexibility and robustness together with the highest quality standards in 
engineering, planning, manufacturing, operational and 
logistics processes. It will lead to the emergence of 
dynamic, real-time optimised, self-organising value 
chains that can be optimised based on a variety of 
criteria such as cost, availability and resource consumption. This will require an appropriate regulatory 
framework as well as standardised interfaces and harmonised business processes. 
The following aspects characterise the vision for Industrie 4.0:
•	 It will be characterised by a new level of sociotechnical interaction between all the actors and 
resources involved in manufacturing. This will 
revolve around networks of manufacturing resources (manufacturing machinery, robots, conveyor 
and warehousing systems and production facilities) that are autonomous, capable of controlling 
themselves in response to different situations, 
self-configuring, knowledge-based, sensorequipped and spatially dispersed and that also 
incorporate the relevant planning and management 
systems. As a key component of this vision, smart 
factories will be embedded into inter-company 
value networks and will be characterised by 
end-to-end engineering that encompasses both 
the manufacturing process and the manufactured 
In the fields of production and automation engineering and IT, horizontal integration refers to the integration 
of the various IT systems used in the different stages of the manufacturing and business planning processes 
that involve an exchange of materials, energy and information both within a company (e.g. inbound logistics, 
production, outbound logistics, marketing) and between several different companies (value networks). The 
goal of this integration is to deliver an end-to-end solution. 
In the fields of production and automation engineering and IT, vertical integration refers to the integration of 
the various IT systems at the different hierarchical levels (e.g. the actuator and sensor, control, production 
management, manufacturing and execution and corporate planning levels) in order to deliver an end-to-end 
solution. 
Industrie 4.0 21
2 The vision
product, achieving seamless convergence of the 
digital and physical worlds. Smart factories will 
make the increasing complexity of manufacturing 
processes manageable for the people who work 
there and will ensure that production can be 
simultaneously attractive, sustainable in an urban 
environment and profitable. 
•	 The smart products in Industrie 4.0 are uniquely 
identifiable and may be located at all times. Even 
while they are being made, they will know the 
details of their own manufacturing process. This 
means that, in certain sectors, smart products will 
be able to control the individual stages of their 
production semi-autonomously. Moreover, it will be 
possible to ensure that finished goods know the 
parameters within which they can function optimally and are able to recognise signs of wear and 
tear throughout their life cycle. This information 
can be pooled in order to optimise the smart 
factory in terms of logistics, deployment and 
maintenance and for integration with business 
management applications.
•	 In the future under Industrie 4.0, it will be possible 
to incorporate individual customer- and productspecific features into the design, configuration, 
ordering, planning, production, operation and 
recycling phases. It will even be possible to incorporate last-minute requests for changes immediately before or even during manufacturing and 
potentially also during operation. This will make it 
possible to manufacture one-off items and very 
small quantities of goods profitably.
•	Implementation of the Industrie 4.0 vision will 
enable employees to control, regulate and 
configure smart manufacturing resource networks 
and manufacturing steps based on situation- and 
context-sensitive targets. Employees will be freed 
up from having to perform routine tasks, enabling 
them to focus on creative, value-added activities. 
They will thus retain a key role, particularly in 
terms of quality assurance. At the same time, 
flexible working conditions will enable greater 
compatibility between their work and their 
personal needs. 
» The Internet of Things and 
Services harbours huge potential for innovation in manufacturing. If we also succeed in integrating 
Web-based services into 
Industrie 4.0 we will increase 
the scope of this potential 
immeasurably. «
Dr. Johannes Helbig
Deutsche Post AG
Member of the Communication Promoters Group of the Industry-Science 
Research Alliance
22 Industrie 4.0
2 The vision
•	 Implementation of the vision for Industrie 4.0 will 
require further expansion of the relevant network 
infrastructure and specification of network service 
quality through service level agreements. This will 
make it possible to meet the need for high bandwidths for data-intensive applications and for 
service providers to guarantee run times for 
time-critical applications. 
2.3 Novel business opportunities and models 
Industrie 4.0 will lead to the development of new business and partnership models that are far more geared 
towards meeting individual, last-minute customer requirements. These models will also enable SMEs to 
use services and software systems that they are unable 
to afford under current licensing and business models.
The new business models will provide solutions to issues such as dynamic pricing that takes account of 
customers’ and competitors’ situations and issues relating to the quality of service level agreements (SLAs) 
in a context characterised by networking and cooperation between business partners. They will strive to ensure that the potential business benefits are shared 
fairly among all the stakeholders in the value chain, including the new ones. Broader regulatory requirements 
such as cutting CO2 emissions (see Chapter 5.8) can 
and should be integrated into these business models 
so that they can be met collectively by the partners in 
the business networks (see Fig. 3).
Industrie 4.0 use case scenarios relating e.g. to “networked manufacturing”, “self-organising adaptive logistics” and “customer-integrated engineering” will require 
business models that will primarily be implemented by 
what could be a highly dynamic network of businesses 
rather than by a single company. This will raise a number of questions regarding financing, development, reliability, risk, liability and IP and know-how protection. As 
far as the organisation of the network and the qualified 
differentiation of its services is concerned, it will be crucial to ensure that responsibilities are correctly assigned within the business network, backed up by the 
relevant binding documentation. 
Detailed monitoring of the business models in real time3
will also play a key role in documenting processing 
steps and system statuses to demonstrate that the 
contractual and regulatory conditions have been comFigure 3: 
Horizontal value 
network
Factory 1
Engineering
Factory 2
Factory 3
Production
Marketing
and Sales
Engineering
Production
Marketing
and Sales
Engineering Production
Marketing
and Sales
Management and 
Planning
Suppliers and 
Subcontractors
Customers
External 
Designer
Smart Grid
KPI
 Source: Hewlett-Packard 2013
Industrie 4.0 23
2 The vision
plied with. The individual steps of the business processes will be tracked at all times, providing documentary evidence of their completion (see also 5.7). In 
order to ensure efficient provision of individual services, 
it will be necessary to establish exactly what the relevant service life cycle might look like, which promises 
can be guaranteed and which licence models and conditions would allow new partners – especially SMEs – 
to join the business networks.
In view of the above, it is likely that Industrie 4.0 will 
give rise to unpredictable global effects and a highly 
dynamic environment. The disruptive nature of new 
technologies and their impact on legal issues (e.g. with 
regard to technology, sensitive corporate data, liability, 
data protection, trade restrictions, use of cryptography, 
etc) can pose a threat to the enforceability of existing 
legislation. Short innovation cycles result in the need 
for constant updating of the regulatory framework and 
cause chronic failings in terms of enforcement. It will 
therefore be necessary to adopt a new approach 
whereby technologies are tested for their compatibility 
with the law both prior to and during their development 
(see Chapter 5.7). Another factor that is key to the success of the Industrie 4.0 initiative is the topic of safety 
and security (see Chapter 5.4). Once again, a far more 
proactive approach will be required in this area. Furthermore, it will be important to ensure that the concept 
of Security by Design is not simply confined to functional components. 
2.4 New social infrastructures in the workplace 
Industrie 4.0 will bring a number of innovations to a 
country that is in the throes of demographic change – 
Germany has the second oldest population in the 
world, after Japan, whilst the average age of the workforce at many German manufacturing companies is in 
the mid-forties. The number of young employees is in 
constant decline and there is already a shortage of 
skilled labour and applicants for apprenticeships in certain professions. In order to ensure that demographic 
change does not occur at the expense of current living 
standards, it will be necessary for Germany to make 
better use of its existing labour market reserves for Industrie 4.0 whilst at the same time maintaining and improving the productivity of the workforce. It will be especially important to increase the proportion of older 
people and women in employment. The latest research 
indicates that individual productivity does not depend 
on a person’s age but is instead connected with the 
amount of time they have been in a particular position, 
the way that their work is organised and their working 
environment. If productivity is to be maintained and increased over the course of longer working lives, it will 
therefore be necessary to coordinate and transform 
several different aspects of the workplace, including 
health management and work organisation, lifelong 
learning and career path models, team structures and 
knowledge management.4
 This is a challenge that will 
have to be met not just by businesses but in particular 
also by the education system. 
Thus, it will not only be new technical, business and legal 
factors that determine Germany’s future competitiveness, it will also be the new social infrastructures in 
the Industrie 4.0 workplace that have the capacity to 
achieve far greater structural involvement of workers in 
the innovation process.
An important role will also be played by the paradigm 
shift in human-technology and human-environment 
interaction brought about by Industrie 4.0, with novel 
forms of collaborative factory work that can be performed outside of the factory in virtual, mobile workplaces. Employees will be supported in their work by 
smart assistance systems with multimodal, user-friendly user interfaces. 
In addition to comprehensive training and CPD measures, work organisation and design models will be key 
to enabling a successful transition that is welcomed by 
the workforce. These models should combine a high 
degree of self-regulated autonomy with decentralised 
leadership and management approaches. Employees 
should have greater freedom to make their own decisions, become more actively engaged and regulate 
their own workload.
The socio-technical approach of the Industrie 4.0 
initiative will unlock new potential for developing urgently needed innovations, based on a greater awareness of the importance of human work in the innovation 
process. 
24 Industrie 4.0
2 The vision
2.5 Novel service-based, real-time enabled 
CPS platforms 
The strategic initiative Industrie 4.0 will give rise to novel 
CPS platforms geared towards supporting collaborative industrial business processes and the associated 
business networks for all aspects of smart factories and 
smart product life cycles.
The services and applications provided by these platforms will connect people, objects and systems to each 
other (see Fig. 4) and will possess the following features: 
•	 Flexibility provided by rapid and simple orchestration of services and applications, including CPSbased software 
•	 Simple allocation and deployment of business 
processes along the lines of the App Stores model
•	 Comprehensive, secure and reliable backup of the 
entire business process
•	 Safety, security and reliability for everything from 
sensors to user interfaces
•	 Support for mobile end devices 
•	 Support for collaborative manufacturing, service, 
analysis and forecasting processes in business 
networks.
In the context of the business networks, there is a particular need for IT development work with regard to 
the orchestration of services and applications on 
shared CPS platforms, since this is where the specific 
requirements for horizontal and vertical integration of 
CPS, applications and services arise in industrial 
business processes (see also Chapter 5.1). For Industrie 4.0, it is important to interpret the term ‘orchestration’ more broadly than is usually the case in 
the context of web services. It should explicitly include 
the setting up of shared services and applications in 
collaborative inter-company processes and business 
networks. Issues such as safety and security, confidence, reliability, usage, operator model convergence, 
real-time analysis and forecasting will all need to be 
reviewed for the orchestration and subsequent effiSource: Bosch Software Innovations 2012
Internet of People
106-108
Internet of Things
107-109
Internet of Services
104-106
CPSplatforms
Smart Building
Smart Grid
Smart Factory
Smart Home
Social Web
Business Web
Figure 4: 
The Internet of Things and 
Services – Networking
people, objects and systems
Industrie 4.0 25
2 The vision
cient, reliable, safe and secure operation of collaborative manufacturing and service processes as well as 
for the execution of dynamic business processes on 
CPS platforms. Among other things, this will involve 
addressing the challenges posed by the wide range of 
different data sources and end devices. The requirements referred to above are currently met in only a 
very rudimentary fashion by generic cloud infrastructure initiatives. Inter-company use of CPS platforms 
by IT, software and service providers and by the users 
themselves will require an Industrie 4.0 reference architecture that will need to take account of the different perspectives of the ICT and manufacturing industries (see Chapter 5.1). Modelled methods will be 
required to develop new applications and services for 
these CPS platforms, in order to manage the complexity resulting from increasing functionality, customisation, dynamism and cooperation between different 
disciplines and organisations (see Chapter 5.2). 
Availability of a secure and efficient network infrastructure with high bandwidths will be key to guaranteeing the 
necessary secure data exchange (see Chapter 5.3). 
2.6 The road to Industrie 4.0
Implementing the vision of Industrie 4.0 will involve an evolutionary process that will progress at different rates in individual companies and sectors. A survey on the “prospects for Industrie 4.0” carried out at the beginning of the 
year by the professional associations BITKOM, VDMA 
and ZVEI confirmed the importance of this topic for the 
competitiveness of German industry and documented the 
need for fuller and more targeted information (see Fig. 5). 
Some 47 percent of the companies in the survey5
 said 
that they were already actively engaged with Industrie 4.0. 
18 percent of these companies said that they were involved in research into Industrie 4.0, whilst 12 percent 
claimed that they were already putting it into practice. 
Figure 5:
Results of survey 
on Industrie 4.0 trends 
(January 2013)
278 companies took part in the survey, mainly from the machinery and plant manufacturing industry. 205 of the companies 
that took part had fewer than 500 employees.
What are the greatest challenges connected with
implementing Industrie 4.0?
(you may select more than one answer)
What support measures would you like to assist 
you with implementation of Industrie 4.0?
* The figures refer to the number of companies ** Average score based on answers provided by all companies Source: BITKOM, VDMA, ZVEI 2013
Are you already engaged with Industrie 4.0?
Yes: 131*
No: 133
How are you engaging with this topic?
Obtaining information
about it
Involved in research
Putting it into practice 33
51
112
0 20 40 60 80 100 120 140
Manufacturer: 4 / important**
How important is Industrie 4.0 for your 
competitiveness as a:
Not at all important Indispensable
Not at all important Indispensable
User: 3 / average
1 2 3 4 5 6
1 2 3 4 5 6
Standardisation
Process/work organisation
Product availability
New business models
Security know-how protection
Research
Training and CPD
Lack of specialist staff
Regulatory framework
98
85
78
70
64
42
30
0 20 40 60 80 100 120 140 160
147
129
109
78
66
60
41
Training courses/seminars
Involvement in research projects
Involvement in working groups
Online forums
Opportunity to share experiences
Regular newsletter
0 20 40 60 80 100 120 140 160
162
26 Industrie 4.0
2 The vision
Take-home message: 
In conjunction with smart production, smart logistics, smart grids and smart products, the increasing use 
of the Internet of Things and Services in manufacturing will transform value chains and lead to the emergence of new business models.
The strategic initiative Industrie 4.0 will leverage the existing technological and commercial potential. Industrie 4.0 offers the prospect of new business opportunities and innovative new social infrastructures in the 
workplace. 
The three greatest challenges connected with implementing the vision were identified as standardisation, 
work organisation and product availability. 
Alongside active involvement in working groups, other 
support measures requested by companies to aid them 
with implementation of Industrie 4.0 include targeted 
seminars where they can share experiences and regular newsletters. The professional associations will play 
an important role in ensuring a steady flow of communication, working closely with the social partners, the 
academic community and the public. Approximately 50 
percent of the companies surveyed said that they had 
already received information about Industrie 4.0 
through their professional associations.
In addition to the above, the Working Group considers 
the following measures to be key to enabling a smooth 
transition to Industrie 4.0 for businesses: 
•	 Implementation of real-time enabled CPS solutions 
will place high demands on the availability of services 
and network infrastructure in terms of space, 
technical quality and reliability. In order to secure 
Germany’s competitiveness internationally, harmonisation of services and business models through the 
introduction of the relevant international standards 
should be supported by policymakers both nationally 
and globally (see also Chapters 5.1 and 5.3). 
•	 Business processes in manufacturing are currently 
often still static and implemented through extremely 
inflexible software systems. However, they cannot 
simply be replaced overnight by service-oriented 
systems. It will be essential to integrate new 
technologies into older ones (or vice versa) – old 
systems will need to be upgraded with real-time 
enabled systems.
•	 The rate of development of new business models 
for manufacturing in the Internet of Things and 
Services will approach the rate of development and 
dynamism of the Internet itself. 
•	 Employees will be involved at an early stage in the 
innovative socio-technical design of work organisation, CPD and technological development (see 
Chapter 5.5).
•	 In order to achieve the transition to Industrie 4.0, it 
will be necessary for the ICT industry (that is 
accustomed to short innovation cycles) to work 
closely with machinery and plant manufacturers and 
mechatronic system suppliers (who tend to think in 
terms of much longer innovation cycles) in order to 
develop business models that are acceptable to all 
the partners. 
1 In 2009, the Industry-Science Research Alliance identified five key areas for action: climate/energy, 
mobility, health, security and communication; more information online at: www.forschungsunion.de.
2 Since the 3rd industrial revolution, ICT has not only been used in manufacturing in order to optimise costs 
and efficiency, but also in processes that touch on or overlap with manufacturing such as logistics, diagnostics, quality assurance, maintenance, energy management or human resource planning. However, the 
different IT systems have developed separately over time and the separate evolution and predominantly 
closed nature of their architectures means that technically it would be extremely complex to integrate 
them. This makes it exceptionally difficult to achieve comprehensive networking of IT systems and flexible 
reconfiguration of manufacturing systems, meaning that it is often simply not possible to take advantage 
of the potential offered by this approach. In Industrie 4.0, these restrictions will no longer apply. 
3 “Real time” refers to data processing that occurs synchronously with events in the real world, as opposed 
to data processing where a delay is involved. 
4 See Altern in Deutschland, Vol. 9: Gewonnene Jahre, Empfehlungen der Akademiengruppe, Nova Acta 
leopoldina NF No. 371, Vol. 107, Stuttgart 2009, p. 49, 56. Immigrants and low-skilled workers (if they 
receive further training) also constitute sources of untapped potential for the labour market, see OECD: 
Zuwanderung ausländischer Arbeitskräfte: Deutschland, 2013, available online at: 
http://www.oecd-ilibrary.org/social-issues-migration-health/zuwanderung-auslandischer-arbeitskraftedeutschland-german-version_9789264191747-de 
5 278 companies participated in the survey, Source: BITKOM, VDMA and ZVEI, January 2013. 
Currently, many production lines or parts thereof 
continue running and consuming high quantities of 
energy during breaks, weekends and shifts where 
there is no production. For example, 12 percent of 
the total energy consumption of a vehicle body assembly line that uses laser welding technology occurs 
during breaks in production. The line operates five days 
a week on a three shift pattern. Although this complex 
piece of machinery is not in use over the weekend, it 
remains powered up so that it can resume production 
immediately once the weekend is over.
90 percent of power consumption during breaks in production is accounted for by the following: robots (20 to 
30 percent), extractors (35 to 100 percent) and laser 
sources and their cooling systems (0 to 50 percent).
Measures to leverage energy efficiency potential:
In the future, robots will be powered down as a matter 
of course even during short breaks in production. During longer breaks in production they will enter a kind of 
standby mode known as Wake-On-LAN mode.1
 The 
extractors will use speed-controlled motors that can 
be adjusted to meet requirements instead of motors 
that cannot be controlled in this way. In the case of the 
laser sources, completely new systems are the only 
way of delivering improvements. 
Taken together, these measures enable a reduction of 
12 percent of total energy consumption to be 
achieved (from 45,000kWh/w to approx. 40,000kWh/w), 
together with a 90 percent cut in energy consumption
during breaks in production. These energy efficiency 
considerations should be taken into account right from 
the earliest stages when designing CPS.
Wed Thu Fri Sat Sun Mon Tue
Day
Potential savings over the weekend
Electricity consumption 
Quelle: Siemens 2013
Source: Siemens 2013
Potential savings during planned and 
unplanned breaks in production
Electricity consumption 
24 hours
Today, energy efficiency is already an important requirement for machinery. A key enabler for meeting this requirement is the ability to systematically power down inactive parts of a line during breaks in production. Industrie 4.0 
will make greater use of the opportunities that exist to do this by ensuring that this capability is consistently integrated into the planning and operation of production facilities. 
Wed Thu Fri Sat Sun Mon Tue
Day
Potential savings over the weekend
Electricity consumption 
Quelle: Siemens 2013
Source: Siemens 2013
Potential savings during planned and 
unplanned breaks in production
Electricity consumption 
24 hours
Tomorrow
Today
Potential benefits
Coordinated power-up and power-down of parts of a vehicle body assembly line leads to improved energy efficiency. 
Whilst the cost/risk ratio and cost-effectiveness of upgrading existing machinery are not very attractive, this approach 
will become an established technical standard for the new machines that will be developed by Industrie 4.0’s leading 
suppliers, enabling improved energy efficiency to be achieved.
Example application 1: Reducing the energy consumed 
by a vehicle body assembly line while it is not in use
1 The robots are controlled using PROFIenergy
3 The dual strategy: 
becoming a leading 
market and supplier 
Industrie 4.0 29
3 The dual strategy
3 The dual strategy: 
becoming a leading market and supplier 
The fourth industrial revolution (Industrie 4.0) holds huge 
potential for manufacturing industry in Germany. Increased deployment of CPS in German factories will 
strengthen German manufacturing industry by improving 
the efficiency of domestic production. At the same time, 
the development of CPS technology offers significant 
opportunities for exporting technologies and products.
Consequently, the implementation of the Industrie 4.0 
initiative should aim to leverage the market potential for 
German manufacturing industry1
 through the adoption 
of a dual strategy comprising the deployment of CPS 
in manufacturing on the one hand and the marketing 
of CPS technology and products in order to strengthen Germany’s manufacturing equipment industry on 
the other.
3.1 Leading supplier strategy
The leading supplier strategy addresses the potential of 
Industrie 4.0 from the point of view of the equipment 
supplier industry . German equipment suppliers provide 
manufacturing industry with world-leading technological 
solutions and are thus in pole position to become global 
leaders in the development, production and worldwide 
marketing of Industrie 4.0 products. The key is now to 
find smart ways of combining outstanding technological 
solutions with the new potential offered by information 
technology, in order to achieve a quantum leap in innovation. It is this systematic combination of information 
and communication technology with traditional high-tech 
strategies that will enable rapidly changing markets and 
increasingly complex global market processes to be 
managed so that companies can carve out new market 
opportunities for themselves. 
•	 Existing basic IT technologies need to be adapted to the specific requirements of manufacturing and continue to be developed with this 
particular application in mind. In order to achieve 
economies of scale and ensure widespread 
effectiveness, it will be necessary to enhance the 
manufacturing technology and IT systems of 
existing facilities with CPS capabilities as part of 
the strategy for migrating to Industrie 4.0. At the 
same time, it will be necessary to develop models 
and strategies for designing and implementing CPS 
manufacturing structures at new sites.
•	 If Germany wishes to achieve its goal of lasting 
leadership as a supplier of Industrie 4.0 equipment, 
research, technology and training initiatives
should be promoted as a matter of priority with a 
view to developing methodologies and pilot applications in the field of automation engineering modelling 
and system optimisation (see Chapter 5.2).
•	 Another key challenge will be to use the technology to create novel value networks. This will 
involve developing new business models, 
particularly ones that link products with the appropriate services.
3.2 Leading market strategy
The leading market for Industrie 4.0 is Germany’s domestic manufacturing industry. In order to shape and successfully expand this leading market, close networking of 
parts of businesses located at different sites will be required, together with closer cooperation between different enterprises. This will in turn require logical, end-toend digital integration of the different value creation 
stages and the life cycles of products, product ranges 
and the corresponding manufacturing systems. One particular challenge will be to achieve simultaneous integration into these emerging new value networks of 
both large-scale undertakings that already operate 
globally today and SMEs that often still operate only 
at a regional level. The strength of Germany’s manufacturing industry is in no small measure due to a balanced 
structure comprising a large number of small and medium-sized enterprises and a smaller number of large-scale 
undertakings. However, many SMEs are not prepared for 
the structural changes that Industrie 4.0 will entail, either 
because they lack the requisite specialist staff or because of a cautious or even sceptical attitude towards a 
technology strategy that they are still unfamiliar with.
30 Industrie 4.0
3 The dual strategy
One key strategy for integrating SMEs into global value 
networks is therefore the design and implementation 
of a comprehensive knowledge and technology 
transfer initiative. For example, pilot applications and 
best practice examples of networks of large-scale industrial undertakings and SMEs could help to make the 
potential of networked value chains more visible and 
convince small and medium-sized enterprises to adopt 
the methodological and organisational tools and technologies of the leading suppliers. This would remove 
the barriers to SMEs becoming acquainted with CPS 
methodologies, taking them on board and implementing them in their own businesses.
In order to make this possible, it will be essential to accelerate the use and development of the technological 
infrastructure, including high-speed broadband data 
transmission (see Chapter 5.3). In parallel, it will also 
be important to educate and train skilled workers (see 
Chapter 5.6) whilst simultaneously developing customised and efficient organisational designs for complex 
working arrangements (see Chapter 5.5).
3.3 The dual strategy and its key features
Optimal delivery of Industrie 4.0’s goals will only be 
possible if the leading supplier and leading market 
strategies are coordinated to ensure that their potential benefits complement each other. Hereafter, this 
approach will be referred to as the dual strategy. The 
strategy incorporates three key features (see also 
Chapter 2.1):
•	 Development of inter-company value chains and 
networks through horizontal integration
•	 Digital end-to-end engineering across the entire 
value chain of both the product and the associated 
manufacturing system
•	 Development, implementation and vertical integration of flexible and reconfigurable manufacturing 
systems within businesses
These features are the key enablers for manufacturers 
to achieve a stable position in the face of highly volatile 
markets whilst flexibly adapting their value creation ac-
» Germany’s economy is characterised by its strong industrial base, particularly its 
machinery and plant manufacturing, automotive and 
energy industries. Implementation of Industrie 4.0 will be 
absolutely key to its future 
development – we cannot 
allow industry to come to a 
standstill. «
Ernst Burgbacher
Parliamentary State Secretary
Federal Ministry of Economics and Technology
Industrie 4.0 31
3 The dual strategy
tivities in response to changing market requirements. 
The features outlined under this dual CPS strategy will 
allow manufacturing companies to achieve rapid, ontime, fault-free production at market prices in the context of a highly dynamic market.
3.3.1 Horizontal integration through value networks
Models, designs and implementations of horizontal integration through value networks should provide answers to the following key question:
How can companies’ business strategies, new value networks and new business models be sustainably supported and implemented using CPS?
This question applies in equal measure to the realms 
of research, development and application (see Fig. 6). 
In addition to “business models” and “forms of cooperation between different companies”, it is also necessary to address topics such as “sustainability”, “knowhow protection”, “standardisation strategies” and 
“medium to long-term training and staff development 
initiatives”.
3.3.2 End-to-end engineering across the 
entire value chain
The following key question arises in connection with 
the goal of achieving end-to-end digital integration 
throughout the engineering process so that the digital 
and real worlds are integrated across a product’s entire 
value chain and across different companies whilst also 
incorporating customer requirements:
How can CPS be used to deliver end-to-end business processes including the engineering workflow?
In this regard, modelling plays a key role in managing 
the increasing complexity of technological systems 
(see Chapter 5.2). The appropriate IT systems should 
be deployed in order to provide end-to-end support to 
the entire value chain, from product development to 
manufacturing system engineering, production and service (see Fig. 7). A holistic systems engineering approach is required that spans the different technical 
disciplines. For this to be possible, engineers will need 
to receive the appropriate training                                                                                                                                                                                   Wenn du fertig mit lesen bist, antworte mit"ja"