INDUSTRY 4.

0 at Bosch

By: Charun ABEELUCK

2020
 Table of Contents

Contents

List of Figures ................................................................................................................................ 3

List of Tables.................................................................................................................................. 3

Executive Summary....................................................................................................................... 4

1.0 Introduction ............................................................................................................................. 5

2.0 Literature Review on Industry 4.0......................................................................................... 7

2.1 Definition of Industry 4.0 ...................................................................................................... 7

2.2 Evolution from Industry 1.0 to Industry 4.0 .......................................................................... 7

2.3 Concept Origin of Industry 4.0.............................................................................................. 8

2.4 Main Components of Industry 4.0......................................................................................... 9

2.5 Technological tools involved in Industry 4.0 ........................................................................ 9

2.6 Benefits and Dark Corners of Industry 4.0.......................................................................... 11

3.0 Application of Industry 4.0 at Bosch Group ....................................................................... 11

3.1 Problem Statement............................................................................................................... 12

3.2 Implementation of Industry 4.0 at Bosch Group ................................................................. 13

4.0 Recommendations.................................................................................................................. 16

5.0 Conclusion .............................................................................................................................. 17

6.0 References............................................................................................................................... 18

2|Page
C.ABEELUCK
 List of Figures

Figure 1: Brands forming part of the Bosch Group......................................................................... 5

Figure 2: From Industry 1.0 to Industry 4.0 ................................................................................... 7

Figure 3: Concepts and components of a smart factory ................................................................. 8

Figure 4: Technologies of Industry 4.0 ........................................................................................... 9

Figure 5: Details of Technologies involved in Industry 4.0 .......................................................... 10

Figure 7: Bosch IoT Cloud and IoT suite ...................................................................................... 13

Figure 8: Areas of development of Nexeed software .................................................................... 14

Figure 9: Szozda’s flow of Industry 4.0 ........................................................................................ 15

Figure 10: Bosch flow of Industry 4.0........................................................................................... 15

List of Tables

Table 1: Details of Bosch’s Operations........................................................................................... 6

Table 2: Problem Statement at Bosch Group ................................................................................ 12

3|Page
C.ABEELUCK
 Executive Summary

This present work describes Industry 4.0 with regard to Bosch Group (also known as Robert
Bosch GmbH). Firstly, an overview of the company is presented with respect to its size, history,
business activities and competitors. Next, a concise review of the literature is performed. The
evolution, concepts, technologies and other aspects are explained. The literature review also
outlines the rationale for selecting Bosch Group for this work. The conception of Industry 4.0 in
fact originated from a report submitted by the group to the Federal Ministry of Government of
Germany. Lastly, the application of Industry 4.0 in Bosch Group is explored; with
recommendations to further effectively implement Industry 4.0 in Bosch Group.

4|Page
C.ABEELUCK
1.0 Introduction

The Bosch Group was established in 1886 by Robert Bosch. It adopted the name ‘Robert Bosch
GmbH’ in 1937 and is commonly referred to as The Bosch Group. With 460 sister companies in
130 locations across the globe, the group employs around 403,000 people worldwide, with
68,700 employees in the research and development department. The headquarters of the Bosch
Group is situated in Stuttgart, Germany and Dr Volkmar Denner is the company’s Chief
Executive Officer. In broad terms, Bosch is a provider of technology, products and services on a
worldwide basis. The group consists of numerous brands as depicted in Figure 1(Bosch Group,
2019).

Figure 1: Brands forming part of the Bosch Group

The goal of Bosch Group is to provide innovative products and services for a smart environment,
thus improving the lives of people worldwide. Bosch uses sensor technology, cross domain
solutions, software as well as its own cloud to connect its customers and providing products and
services of optimum quality. The growth of the firm is based on its innovative strength and its
belief that the future rests on artificial intelligence (AI). This was confirmed by the CEO who put
forward that ‘We not only have to develop AI but build trust in AI as well’ (Bosch Group, 2019)

Bosch’s operations can be broadly segmented into four (4) business units namely: (1) Mobility
Solutions, (2) Industrial Technology, (3) Consumer Goods, and (4) Energy and Building
Technology. Figure 2 gives details of the business activities and proportion of total sales for each
segment.

5|Page
C.ABEELUCK
 Table 1: Details of Bosch’s Operations (Source: Own work adapted from Bosch Group, 2019)

Bosch Proportion Description of Activities

Operations of total
sales

Mobility 61% The activities are mainly production of automotive spare parts such as
Solutions injection technology in car engines, steering wheel systems, safety and
driver’s assistance systems, among others. The company is looking for the
development of electric cars to arrive Smart mobility with zero CO2
emission.

Industrial 9% This division deals with drive and control of any machines (mainly
Technology industrial). It includes software, customised systems, smart machinery,
assembly technology and modern gear technology to allow production
systems to operate autonomously with an efficient flow of data.

Consumer 23% This section of the business supplies power operated tools such as hammer
Goods drills, cordless screwdrivers and jigsaws, lawnmowers, hedge trimmers, and
high-pressure cleaners, among others. It also offers a wide range of
household appliances such as washing machines, refrigerators, ovens, etc.

Energy and 7% This section is divided into two units: one is concerned with customised
Building services for building security, energy efficiency and home automation such
Technology as video surveillance, etc. while the other deals with air conditioning,
energy management and heating systems for all types of buildings.

As per Bosch Financial report (2019), the group has had sales revenue of 78.5 billion euros for
the year 2018 as compared to 78.1 billion euros for the preceding year (Bosch Group, 2019). The
competitors of Bosch include Dephi Technologies, Honeywell, Parker-Hannifin, Siemens,
Whirlpool, among others (Craft, 2020).

6|Page
C.ABEELUCK
2.0 Literature Review

2.1 Definition of Industry 4.0

There has been an ongoing debate in the literature concerning the definition of Industry 4.0. Lasi
et al. (2014) explained it in terms of products and argued that it refers to the computerisation and
automation of the manufacturing industry. It is further argued that Industry 4.0 promotes the
formation of a communication link among the stakeholders (suppliers, distributors, consumers,
business associates, etc.) for a more efficient value chain. On the other hand, Lu (2017) viewed
Industry 4.0 as an innovation in both the goods and services sector. He expounded that it is the
sum of digitalised, adapted, optimised and service oriented technologies applied in a value chain
using algorithms, big data and high robotics.

2.2 Evolution from Industry 1.0 to Industry 4.0

Figure 2: From Industry 1.0 to Industry 4.0 - Source: Xu et al. (2018)

The First Revolution, also called ‘The Age of Steam’ occurred in the 18th century whereby the
economy shifted from agriculture and handmade manufacture to mechanical systems powered by
water and steam power. This improved the rate at which products were manufactured. The
Second Industrial Revolution was in 19th century whereby mass production was achieved using
electricity. This is why the second revolution also referred to as ‘The Age of Electricity’ (Xu et
7|Page
C.ABEELUCK
al., 2018). The Third Industrial Revolution (also called The Information Age) happened officially
in 2005 with the introduction of automation and ICT systems in the manufacturing industry (Xu,
2011) with production rates enhanced and a larger flexibility in the production process was
achieved thus yielding a greater variety of products (Rojko, 2017). In 2013, the Fourth Industrial
Revolution (The Cyber-Physical Systems-CPS) was officially recognised due to considerable
development in ICT coupled with innovative technologies (Szozda, 2017).

2.3 Concept Origin of Industry 4.0

The concept of Industry 4.0 was first initiated in 2011 with a German government project aiming
at promoting automation in the manufacturing industry. A report was presented by Robert Bosch
GmbH (now known as the Bosch Group) in 2013 through a study led by Siegfried Dais to the
German Federal Ministry for Economic Affairs (Szozda, 2017). The report detailed the concept
of Industry 4.0 which was adapted from Smart Factories Concept whereby information about
production processes flew electronically (Hermann et al., 2016). It was recommended that
technologically-connected machines should be able to communicate among themselves to
organise production processes and be controlled outside organisations or even outside the country
through internet and digital robotics for more efficient operation (Pfohl et al., 2015). An example
of a Smart Factory is as illustrated below.

Figure 3: Concepts and components of a smart factory - Source: Lee et al. (2017)

8|Page
C.ABEELUCK
2.4 Main Components of Industry 4.0

As explained by Roblek et al. (2016) and Hermann et al. (2016), below are the components of
Industry 4.0 namely:
1. Cyber-physical systems (CPS) - It is the new set of system which allows communication
between robots and humans through new and innovative, adapted and integrated
technologies (Baheti and Gill, 2011).
2. Internet of things (IoT) - It is defined as a network with the ability to configure itself
based on pre-established protocols using network connections and communicate with
other devices through intelligent interfaces (Vermesan et al., 2017).
3. Internet of Services (IoS)- It is a network of services linking the real and virtual
environment over the Internet which connects service providers to customers thus
contributing in providing value in the supply chain (Li et al., 2015).
4. Smart Factories
It is concerned mainly in making a factory run in an autonomous manner. Each stage of
production is automated through technologies such as data-driven modeling, big data
analysis, data-enabled prediction, among others (Zheng et al., 2018).

2.5 Technological tools involved in Industry 4.0

The technologies concerned with Industry 4.0 are summarised in Figure 5 and 6 below. They
represent the core tools which help in driving innovation and advancement in Industry 4.0.

Figure 4: Technologies of Industry 4.0 – Source: Saturno et al. (2017)

9|Page
C.ABEELUCK
 Figure 5: Details of Technologies involved in Industry 4.0 (Source: Own work)

10 | P a g e
C.ABEELUCK
2.6 Benefits and Dark Corners of Industry 4.0

The benefits derived from Industry 4.0 are as follows:

 With autonomous and interconnected robots, the cost of production is reduced by 10-30%
with a greater quantity of products been manufactured in a smaller amount of time
 the logistics cost is decreased by 10-30%, and
 the cost of quality assurance in organisations is also reduced by 10-20% (Rojko, 2017)

The dark corners of Industry 4.0 which require particular attention are:

 With large amount of data stored, there is a risk of security breach and data being hacked
 With automation systems, there is a rise in unemployment rates since many jobs initially
carried out by people are been done more effectively by robots
 Since machines can be available for work 24/7, there is a rising sense of insecurity among
employees. This creates a negative impact on their mental and physical health as they fear
machines will surpass human capabilities (Kovacs, 2018)

3.0 Application of Industry 4.0 at Bosch Group

With the aim to explore how Industry 4.0 is applied at Bosch Group, the problems which brought
about these changes are first discussed. Then the different technologies of Industry 4.0 put in
place to address these problems are detailed in subsequent sections.

11 | P a g e
C.ABEELUCK
3.1 Problem Statement

The problem statements along with their concerned departments are listed in figure 7 below:

Table 2: Problem Statement at Bosch Group (Source: Own Work adapted from Szozda (2017))

Problems Problem Statement Concerned

Department

Problem 1 Bosch needed traceability and monitoring of its 5,000 machines found in Production
its 11 factories. Having information about each segment of production
allows production schedule to be determined in a more optimum way,
with the maximum use of available resources.

Problem 2 A stringent quality control of its products was required during the Quality
manufacturing process so as to minimize manufacturing defects and Assurance
hence promote customer satisfaction.

Problem 3 A consistent and effective flow of information was required between all Supply Chain
stakeholders of the supply chain. In other words, Bosch, being the
manufacturer, needed information to flow effectively through its
suppliers, distributors, retailers and customers. In this way, the supply
chain is fully optimized and customer needs are easily identified and
met.

Problem 4 There is a growing demand to track the products within the supply Supply Chain
chain. In other words, the location of the products in real time should be
transmitted to Bosch Group.

12 | P a g e
C.ABEELUCK
3.2 Implementation of Industry 4.0 at Bosch Group

Below are the strategies used by Bosch Group to solve the problems stated in the previous
section:

1) Development of Bosch IoT Cloud and IoT suite

Bosch Group has developed its own IoT Cloud and IoT suite to connect all of its machines on a
single platform for better management and more efficient decision making. This therefore solved
the traceability and monitoring of its machines (Problem 1). Figure 7 depicts how each stage of
production, transport and delivery are able to track and monitored.

Figure 6: Bosch IoT Cloud and IoT suite

13 | P a g e
C.ABEELUCK
 2) Development of NEXEED- a software for Bosch Group

With the aim to solve Problem 3 which is to allow effective data flow in the supply chain, Bosch
Group developed the NEXEED software. It is a series of software solution designed to connect
its supply chain stream along with its production unit. As shown in figure 8, Nexeed
encompasses the source, make and delivery process of the firm while focusing on the
transparency, agility, cost, quality and time of the processes. It is broadly divided into three areas
namely manufacturing, logistics and open integration to harmonise Industry 4.0 application of
Bosch Group.

Figure 7: Areas of development of Nexeed software

A flow of Industry 4.0 was developed by Szozda (2017) providing insights about information and
product flow is shown in figure 9. A similar exercise was carried out to show how Bosch Group
devised its strategy to link the stakeholders of its supply chain. Innovative technologies were
developed and implemented. This is depicted in figure 10.

14 | P a g e
C.ABEELUCK
 Figure 8: Szozda’s flow of Industry 4.0 (Source: Szozda (2017))

Figure 9: Bosch flow of Industry 4.0 (Source: Robert Bosch GmbH (2019)).

3) Implementation of a Machine Management System (MMS)

The implementation of MSS in Bosch Group has optimized the production processes whereby it
monitors each machine operation time in real time and feeds the central data server. The system
allows the detection of any defect in the machines investigates the reason and proposes remedial
measures. In the event that the issue cannot be resolved, then the matter is transmitted to a human
being knowledgeable in the subject matter and the issue is solved online. This is possible with the
use of Bosch IoT Cloud and Suite and a combination of business applications (Shrouf et al.,
2014). With data available about the manufacturing process with each production links, Bosch is
able to solve Problem 1&2 which are traceability and monitoring of its machines with proper
production schedule and quality control of its products.

15 | P a g e
C.ABEELUCK
 4) Development & Use of TDL (Transport Data Logger)

In order to solve the problem of tracking its products in its supply chain (Problem 4), Bosch
Group has developed and adopted the use of a TDL. It is basically a small apparatus which is
attached to the consignment and is connected on the Bosch IoT Cloud. It transmits information in
real time to the main server about location, temperature, humidity and shocks encountered. The
whole process is controlled by NEXEED Track and Trace coupled with NEXEED Intra-logistics
Execution software. This digitalization of the supply chain have had great impacts such as

 Reducing inventory, booking keeping and scanning by 80%.

 Enhancing the use of logistics assets such as forklifts by 10-25%.
 Reducing the time needed to collect data and coordinate material flow processes by 50%.

4.0 Recommendations

The recommendations for the implementation of Industry 4.0 at Bosch Group are as follows:

 Cyber-security

As highlighted earlier, the involvement of Bosch Group into Industry 4.0 entails electronic data
which is being transmitted, analysed and stored through its data servers. To decrease the
probability of cyber attacks, it is advised that Bosch Group reinforced its firewalls and carry out
regular software updates to avoid any data leakage through hackers.

 Unemployment

With the evolvement of Industry 4, it is reported that 47% of the working population in the US
and 54% in Europe shall be replaced due to automation and robotics (Kovacs, 2018). Bosch
Group is therefore recommended to foresee such situations happening and preparing to train these
employees into another trade through upgrading skills sessions.

 Mental health of employees

As Industry 4.0 is unfolding, one of the main dark corners, as emphasized in the literature review,
is mental health of people. This issue has given rise to the study of ‘The Art of Living with
Information and Communication Technologies (ICT)’ by researchers and is currently the focus of
numerous researchers (Lemmens, 2017). Bosch Group is recommended to consider this important

16 | P a g e
C.ABEELUCK
facet of Industry 4.0 and give its employees psychological support to ease the new human-robots
interaction.

5.0 Conclusion

Though the Fourth Industrial Revolution started in 2011, it has had tremendous impact on the
operations of Bosch Group with great advancements in the operational activities of the firm. With
a dedicated and strong Research and Development unit, Bosch Group is not only developing
technologies for itself but is also actively marketing these technologies to the world and strongly
believes that Industry 4.0 is not a topic for the future but is itself the future. After implementation
of its own cloud and developing software and hardware, the company is now gearing its efforts
towards the development of artificial intelligence. With a good turnover and skilled labour force,
Bosch Group aims at being the leader of Industry 4.0. However, the recommendations put
forward with regard to its people and cyber security are important facets of Industry 4.0 which
should be considered.

17 | P a g e
C.ABEELUCK
6.0 References

Baheti, R. & Gill, H. 2011. Cyber-Physical Systems. The Impact Of Control Technology,
12, 161-166.

Craft. 2020. Bosch Competitors [Online]. Available: Https://Craft.Co/Bosch/Competitors

[Accessed 05 March 2020].

Hermann, M., Pentek, T. & Otto, B. Design Principles For Industrie 4.0 Scenarios. 2016
49th Hawaii International Conference On System Sciences (Hicss), 5-8 Jan. 2016 2016.
3928-3937.

Kovacs, O. 2018. The Dark Corners Of Industry 4.0 – Grounding Economic Governance
2.0. Technology In Society, 55, 140-145.

Lasi, H., Fettke, P., Kemper, H.-G., Feld, T. & Hoffmann, M. 2014. Industry 4.0.
Business & Information Systems Engineering, 6, 239-242.

Lee, C. K. M., Zhang, S. Z. & Ng, K. K. H. 2017. Development Of An Industrial Internet

Of Things Suite For Smart Factory Towards Re-Industrialization. Advances In
Manufacturing, 5, 335-343.

Li, S., Xu, L. D. & Zhao, S. 2015. The Internet Of Things: A Survey. Information Systems
Frontiers, 17, 243-259.

Lu, Y. 2017. Industry 4.0: A Survey On Technologies, Applications And Open Research
Issues. Journal Of Industrial Information Integration, 6, 1-10.

Pfohl, H.-C., Yahsi, B. & Kurnaz, T. The Impact Of Industry 4.0 On The Supply Chain.
Innovations And Strategies For Logistics And Supply Chains: Technologies, Business
Models And Risk Management. Proceedings Of The Hamburg International Conference
Of Logistics (Hicl), Vol. 20, 2015. Berlin: Epubli Gmbh, 31-58.

18 | P a g e
C.ABEELUCK
 Roblek, V., Meško, M. & Krapež, A. 2016. A Complex View Of Industry 4.0. Sage Open,
6, 2158244016653987.

Rojko, A. 2017. Industry 4.0 Concept: Background And Overview. 2017, 11, 14.

Saturno, M., Pertel, V. M., Deschamps, F. & Loures, E. D. F. Proposal Of An Automation

Solutions Architecture For Industry 4.0. 24th International Conference On Production
Research, 2017.

Szozda, N. 2017. Industry 4.0 And Its Impact On The Functioning Of Supply Chains.
Logforum, 13, 401-414.

Vermesan, O., Bröring, A., Tragos, E., Serrano, M., Bacciu, D., Chessa, S., Gallicchio, C.,
Micheli, A., Dragone, M., Saffiotti, A., Simoens, P., Cavallo, F. & Bahr, R. 2017. Internet
Of Robotic Things : Converging Sensing/Actuating, Hypoconnectivity, Artificial
Intelligence And Iot Platforms. In: Ovidiu Vermesan, J. B. (Ed.) Cognitive
Hyperconnected Digital Transformation : Internet Of Things Intelligence Evolution.
River Publishers.

Xu, L. D., Xu, E. L. & Li, L. 2018. Industry 4.0: State Of The Art And Future Trends.
International Journal Of Production Research, 56, 2941-2962.

Zheng, P., Wang, H., Sang, Z., Zhong, R. Y., Liu, Y., Liu, C., Mubarok, K., Yu, S. & Xu,
X. 2018. Smart Manufacturing Systems For Industry 4.0: Conceptual Framework,
Scenarios, And Future Perspectives. Frontiers Of Mechanical Engineering, 13, 137-150.

19 | P a g e
C.ABEELUCK