In order to remain competitive in the age of the Internet of Things, the focus in production and logistics is more than ever upon client-orientation, flexibility and co-operation. In fact, digitalization is the key theme this year for many managers of industrial operations. 84 percent of companies feel the pressure to digitalize, according to a survey by consultants Accenture of 250 leading German companies .

In the opinion of the production industry sector, 2016 is the "year of change, opportunity and uncertainty", says Sean Riley, head of Global Manufacturing and Supply Chain Solutions at Software AG. "The clients and markets of manufacturing companies are undergoing a transformation process, because business processes all around the world are changing at a breathtaking pace." According to Software AG, some digital trends can be observed, which manufacturers must take account of in 2016.

Digital trends in the manufacturing sector

The value-added chain in the manufacturing industry will be increasingly influenced by the requirements of clients, and affected by their needs - both those that are already known and those that are still unrecognized. Therefore, manufacturers will have to create new abilities faster than expected, such as client-specific production, in order to be able to offer added-value products both to companies and private clients. This increased client-orientation goes hand in hand with the spread of micro-logistics networks, which deliver the finished product direct to the consumer and can react immediately to client requests.

Just as important is the optimal use of inventory. The Internet of Things enables this to be precisely measured and tracked in real-time - it is made possible by the autonomous Smart Supply Chain, with networked containers and transport systems. The ability to react to requests in real-time is increasingly important. The key building blocks of this ability - referred to as "resilience" - will be increasingly enabled by 3D visualization. This technology can be utilized to create an innovative delay strategy, in which required products are manufactured as late as possible.

Co-operation with external partners will also continue to evolve. For some time already, manufacturers have depended on their suppliers for the quality of their services. Now they will increasingly use their partners to develop innovations for products and services, with which they can improve their client orientation, optimize their operations and stabilize their supply chain.

New businesses in the Internet of Things

It is an established belief among 57 percent of German industrial companies that they will significantly alter their business model over the next five years due to the digital revolution in the industry. This is shown by the second edition of the German Industry 4.0 Index . 179 German industrial companies were canvassed in this study, about 70 percent of which are involved in plant and machinery construction, and the electrical and automobile industry. This movement towards new business models is seen as something positive by the vast majority of the companies who took part in the study, 72 percent of whom expect to become economically more successful with the conversion to the intelligent factory.

Even more optimistic were those companies who already have some operational experience with Industry 4.0. For example, they no longer invoice based on the acquisition of goods or services, but on the use to which they are put. Manufacturers of industrial equipment calculate their prices based on the production quantity, the availability and run-times of machines. By digitalising the factory they will at last be able in future to monitor the plant items precisely and dynamically predict their remaining lifetime .

The Erwin Sick company of Waldkirch demonstrates how to progress from being a manufacturer of sensors to a provider of comprehensive logistics solutions. The market leader for sensors, with which such data as packet codes can be captured, has developed a software solution as part of their digital transformation, which collects the packet data from goods on conveyors and sends this to the smart-watch of a store operative. The store worker receives reports with no delay, about damaged deliveries or the stoppage of a conveyor. For the clients of Erwin Sick this means increased efficiency - and new business for Erwin Sick.