Innovate Manufacturing SMEs in the Context of Industry 4.0: A Formal Approach

Teresa Taurino and Agostino Villa

## Abstract

A few years ago, the "Industry 4.0" programs have been launched in several European countries and USA to support the development and the innovation of SMEs. The common goal of these programs is to innovate SMEs in terms of automation (of machines), integration (of lines), and interconnection (of the production system with its management). For SMEs, it would be a great opportunity. However, SME managers (who usually are at the same time, owners, operations managers, and technicians) face great difficulties in accessing funding from an "Industry 4.0" plan, due to lack of information and limits on their knowledge of new information technologies. This chapter aims at guiding a manager/technician toward the opportunities offered by "Industry 4.0" by presenting some formal models on which managers can base their decisions of innovating their SMEs.

Keywords: Industry 4.0, cyber physical systems, interconnection, small and medium enterprises, innovation

### 1. Introduction

After the great financial crisis started in 2007, plans have been launched in various countries to support the development and the innovation of SMEs: until now, there are 15 European programs for Industry 4.0 all over Europe (Germany, Italy, France, Austria, Belgium, Czech Republic, Denmark, Spain, Hungary, Lithuania, Luxembourg, Holland, Poland, Portugal, and Sweden). The common goal of these programs is to innovate SMEs in terms of automation (of machines), integration (of lines), and interconnection (of the production system with its management). However, in the practical application, this innovation plan encounters a problem common among several countries: managers of SMEs, generally owners with technical competencies, do not have the knowledge and skill necessary to define their innovation programs for their own SME, such to satisfy the constraints of the "Industry 4.0" plans [1].

Information technology (IT) is the heart of all the manufacturing systems with the presence of many technological innovations such as sensors, actuators, and computerized information that have been used by manufacturing companies for decades [2], but full potential of these technologies has not been realized [3] in the current advanced manufacturing processes. This is due to the fact that connectivity and integration of information systems is limited to a relatively homogeneous area, for example, part manufacturing, or assembling or quality testing [4, 5].

Given the inadequate technical skill of typical SME managers, we need a new methodology and related formal models to guide them in identifying the most convenient innovation perspective for their company, to analyze how this innovation can be financed in the context of Industry 4.0, to evaluate costs and benefits to be developed in terms of:

c. decentralization: the various cyber and physical components that make up the production system have appropriate strategies (e.g., to correct process drifts)

Innovate Manufacturing SMEs in the Context of Industry 4.0: A Formal Approach

d.remote interaction: the devices are remotely accessible so as to be able to detect

Based on the five guidelines that characterize the typical actions of Industry 4.0,

e. real time processing and reactions: the presence of functions that allow to collect process data in real time and to adopt the necessary actions or

a wide literature has been developed according to the following main lines:

4.0 to explain changes and their usefulness [10–13]; and

that meet the constraints of the "Industry 4.0" plans [1, 17, 18].

3. The logical decision-making model

and productivity of his production process;

189

new products or define a new work organization;

better implemented by applying one of the Industry 4.0 measures.

• Schematic description of the Industry 4.0 program to highlight the main

• Analysis of the development trajectory from lean manufacturing to Industry

• Discussion of any critical issues in the application of Industry 4.0, especially in

Consequently, it is understandable why small enterprises managers ask to have a "method" to guide them in selecting which innovation of their business could be

The logical model of the Industry 4.0 decision-making process can be interpreted as follows: known the current state of the production process, the manager decides to

a. buy a new high-tech machine in case the manager wants to increase efficiency

b.develop a research and development program (R&D), if he wants to design

choose the measure of Industry 4.0 which he considers the most convenient according to the needs of innovation of his SME, by estimating which financing or which tax credit could get. The four main measures of Industry 4.0 corresponding to

the following choices (see the following decisional scheme in Figure 1) are:

With reference to the analysis of the Sommer paper, it is necessary that the researchers make clear that in the practical application of the Industry 4.0 plans, the technology road-map is still not clear in industry and in academy [15]. Some literature reviews show that Industry 4.0 projects only is a cost-driven initiatives; however it is rare to find papers where precise indications on the convenience of using some actions of the Industry 4.0 program are given [17]. This is particularly evident in the case of micro, small and medium-sized enterprises. Usually, the SME manager is also the founder of the company and the holder of the knowledge and techniques on which the industrial process was built and developed. These figures of manager/ technician, and owner, are very tied to their original technical knowledge. Therefore, they resist to accept that their company becomes the object of innovation programs

in an autonomous manner;

DOI: http://dx.doi.org/10.5772/intechopen.88017

corrections.

enablers [1, 9];

SMEs [14–16].

operating data and introduce corrective measures;


Therefore, this chapter is organized as follows. Section 2 provides an outline of the mail existing literature. Then, a new logical scheme decision-making process to select one of the four alternative measures of the Industry 4.0 program is presented (Section 3). To describe in formal terms the main usable Industry 4.0 measures, the most utilized alternative measures of the aforementioned logical model are reformulated in terms of mathematical models, defined in a sufficiently simple form to be understood by SME managers and technicians (Sections 3.1 and 3.2). By analyzing a real applications of Industry 4.0 to an Italian SME (to be developed within the Italian PMInnova Program, that is, a program to promote innovation and development of SMEs under the official agreement of Politecnico di Torino and the Bank Group of Asti, Biella, Vercelli, North-East Italy), the difficulties and benefits of Industry 4.0 are discussed in a small mechanical production plant (Section 4). Section 5 contains a comparison among Industry 4.0 programs in some European countries. Then, some concluding remarks are reported in Section 7.
