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M. Küster

The Intelligent Factory

Disruptions in global supply chains have rarely ever caused more headlines than at the moment. The nature of internationally connected supply chains has been to take advantage of globalization strategies for sourcing, production and distribution of produc...



  • Introduction
  • 1 Market situation and demand for intelligent factories and plants
  • 2 Realizing transformation programs
  • 3 Business opportunities and technology requirements
  • 4 Selected Industry 4.0 use cases and an SAP customer example
  • 5 Outlook & what’s next
  • A About The Authors
  • B Disclaimer
  • Endnotes

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Otto Schell, Jörg Minge, Dominik Metzger, Volker Stockrahm


IT Management




2.1 Basic assumptions for transformation

The end-to-end transformation of supply chains has already been discussed in the introduction. Digitization of a factory is one of the many possible building blocks and implementation initiatives of a major transformation. For this very reason, digitization of a factory also requires similar questions to be answered, the right concepts to be developed, and the right implementation sequence to be determined.

As mundane as it sounds, the question “Why should a factory be digitized?” should be answered clearly and unambiguously. Depending on the answer to this question, fundamentally different solution concepts can result.

The following are examples of reasons for factory digitization:

  • New customer requirements necessitate new business models that can only be realized with sufficient digitization of factory processes.
  • Documentation of the sustainability of products throughout the entire manufacturing process and beyond is a competitive differentiator.
  • Regulatory requirements demand complete documentation of all logistical and production-related process steps.
  • New products are highly individualized and it must be possible to adapt them to the customer’s wishes even during the production process.

There are also many simple reasons for the need for factory digitization:

  • The standardization of production processes and their digitalization should create potential cost savings.
  • Centralization or outsourcing of IT organization and or IT structures is foreseen.
  • Through the simplification of processes, a better scalability of IT structures is to be achieved.

Once the basics for a transformation have been clarified, the conception of future processes and their digitization potential can begin. It is important to look at the entire production processes and the relationships between them, as well as networking and dependencies with other processes (employee skilling, cybersecurity, etc.).

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