Author: Martin Grolms
Subscription models for intelligent machines could lead to a Circular Economy
The interconnection of embedded production systems and dynamic processes of business and technology makes it possible to manufacture products more profitably, the so-called smart production. But intelligent linking of even old machines can do much more: it can safe resources, avoid overproduction, prevent breakdowns and significantly extend maintenance intervals. This could be the first step towards an industrial circular economy as demonstrated in the EU project RECLAIM.
We all know that our current economic system, which is widely based on resource consumption, is destroying and polluting our planet. The Earth Overshoot Day (EOD) 2021 was July 29, i.e. the calculated calendar date on which humanity’s resource consumption for the year exceeds Earth’s capacity to regenerate. If we and future generations want to continue to live in prosperity, there is only one solution: we must not consume more resources than will grow back; we must conserve resources and consistently reuse them. In short, we need a Circular Economy.
Concepts like repair and reuse sounds great and reasonable to preserve the value of the products within the system, through the extension of their useful life. However, such an economic shift would be nothing less than the manufacturing revolution. Sure, in some areas, there are already promising approaches but industrial production in particular still generates huge quantities of waste. Production consumes an enormous part of the available energy and drinking water worldwide and at the same time it emits the lion’s share of carbon dioxide and other greenhouse gases.
Researchers around the world are addressing these challenges, technically, economically and socially. Some of them believe that the production of the future has to be highly networked to meet the challenges. Industry 4.0, Smart Factory, Artificial Intelligence, we hear repeatedly. However, we are still a long way from that. There are intelligent pioneering companies, but the vast majority of factories use classic machines that have often been in use for decades. And they still do reliable and accurate work, but with a traditional, resource-consuming environment.
Reuse and refurbishment of old machines
In order to minimize the use of resources, increase the energy efficiency, optimize production and products in terms of sustainability, all production equipment and tools and all process steps must be connected and synchronized with each other in the best possible way. Which is a problem: “Most machines cannot simply be equipped with sensors and used in a digitalized environment,” explains Dr. Michael Peschl, Head of Research and Development at Harms & Wende. The Hamburg-based company is an industrial supplier for automated and manual welding technology and is leading the RECLAIM project.
RECLAIM stands for RE-manufaCturing and Refurbishment LArge Industrial equipment. This EU funded project intends to demonstrate strategies and technologies that enable the re-use of industrial equipment in old, renewed and new factories alike. Researchers and industry representatives from nine European countries formed RECLAIM with an ambitious goal to provide replicable solutions that could help European manufacturing sector meet these and future demands.
“Harms & Wende has two main objectives within the RECLAIM project,” as Michael Peschl told. “Firstly, how far can we get with reuse and refurbishment, retrofit and revamp? Where are the limits?” New re-use and refurbishment approaches are needed to ensure European manufacturing remains competitive and protects the environment, according to the researcher. Several companies have successfully retrofitted existing machines with smart sensors as part of RECLAIM in order to integrate them into the control and regulation network of their plants, highly as well as partially automated. “Secondly, we want to find out how machines will have to be designed in the future to meet the requirements of a circular economy,” he added.
These are not merely technical or mechanical issues, but also. It is not just about separating materials and recycling them comprehensively, even though this is still an important factor. The point is: The fewer resources an economy needs, the easier it will be to move away from resource-intensive production and consumption models, towards a sustainable, low carbon and zero waste economy.
Peschl and his RECLAIM colleagues want to reduce the demand for resources as much as possible. Therefore, they are seeking for ways to postpone maintenance intervals to the greatest possible extent for instance. They are developing flexible machine concepts that can be used more widely, and they are considering whether it might not make more sense to rent machines instead of buying them. For these considerations, they need data, lots of data, so called big data: Machine data, production data, material data, information about machine operators, parameters of the entire production environment – best at any point in time, details areas of product application, end-user behavior, and so on. To evaluate and interpret such a vast of information is only possible using Artificial Intelligence.
Industry 4.0 Audit
To determine the digitalization potentials of production facilities Maurice Herben, Program Director Fraunhofer Project Center at the University of Twente, Netherlands, and his colleagues from the Fraunhofer Institute for Production Technology IPT developed an Industry 4.0 Audit. The comprehensive Industry 4.0 Audit pledges to provide companies with an insightful bird’s eye view of the current digitalization status, as well as a research-backed, data-driven blueprint for future success.
The audit starts with an on-site Quick Scan, a brief investigation to develop an understanding of the company’s specific needs, goals, and expected challenges to scope a tailored audit approach. It includes on-site talks to company’s leaders and employees. Using the information from the quick scan, the Fraunhofer experts will develop a custom audit plan tailored to the specific requirements of the organization.
The main Industry 4.0 Audit takes up to two weeks of in-house workshops with various stakeholders. It comprises a current state analysis, a benchmark and gap analysis and finally a road map development. The company receives a breakdown of the current processes and Industry 4.0 competencies and gaps. Maurice Herben and coworkers create a custom implementation and action plan. If desired, they provide implementation support and workshops.
“The key customer benefit of our audit is that many companies don’t even know what is possible with digital transformation”, says Herben. “We have various experts for individual areas who are familiar with the latest trends and technological developments in smart industry, such as adaptive production or analytics in production, Digital Twin or subscription models. They know the specific benefits, opportunities and challenges.”
Recently, the Dutch Smart Industry Hub “Innovatiecluster Drachten” (ICD) applied the 4.0 Audit to develop an action plan for introducing a completely paperless production. “It actually sounds like a lot less work than it really is”, Herben recalls. The ICD companies Quadient, Variass, Ventura Systems, NTS Norma and photonis spend two years successfully working on solutions for paperless production. The results go beyond instructions for operating machines on iPads. Thus, the new comprehensive solution calls for an innovative IT infrastructure that, linked to the production process, can respond to the latest consumer needs.
Machine as a Service (MaaS)
According to the Fraunhofer Project Center, analytics in production and Digital Twins enable new business models – with an extended scope or a consistently sustainable orientation. Of course, this requires transforming the current production processes. Moreover, if companies are willing not only to rethink their production but also their financing principles, subscription models could be the next big step: Companies such as MAN, Siemens, Philipps, Caterpillar and Saint Gobain have already implemented the subscription instead of purchase trend. More and more companies simply want use machines and tools; access to such a service is more important than the acquisition. For many companies, this is a question of availability, flexibility, variety of options, and sustainability.
The increasing digitization of processes and products raise great hopes among manufacturing companies in the form of the resulting value creation potential. Due to the mounting possibilities of digitization, special potential is possible in the reinterpretation of industrial subscription models possible. Traditional distribution models resulted in significant overproduction, wich means a considerable waste of resources associated with enormous costs shared by manufacturers and customers. This could be avoided by using subscriptions. Subscription models offers an increase in performance and leads to an alignment of the interests of manufacturer and customer. Furthermore, machine users benefit from an enhanced dynamic connected with productivity and quality, comprehensive maintenance and repair service, cost transparency and lower usage costs as well as simplified re-procurement.
“Subscription models have not yet become established,” explains Michael Peschl. “But the advantages are obvious. We have to create trust and acceptance. That’s exactly what we’ve started to do with RECLAIM.” Now Peschl and his colleagues demand to adjusted European tax depreciation options to support subscription approaches that facilitate the circular economy.
However, new idea on refurbishment and remanufacturing based on big data analytics, machine learning, predictive analytics, and optimization models using deep learning techniques and digital twin models in the RECLAIM project was very successful. Stakeholders were able to make informed decisions about whether to remanufacture, upgrade, or repair heavy machinery that is nearing the end of its life cycle.
“Harms & Wende could substantially improve the welding technology within the RECLAIM project,” Peschl proudly presents the results. “So far, we’ve reduced incidents by 50 %, reduced maintenance costs by 50 % as well, and extended the service life of our systems by eight years.” As soon as the RECLAIM project partners implement the knowledge gained and the fundamental findings on the design requirements of the circular economy, further improvements are very likely in the very near future.