Key Terms of Digitalization and Industry 4.0

Our growing glossary explains important specialist terms and provides an initial orientation for digital trends in a brief and comprehensible way.

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Augmented Reality

The term relates to a computer-based extension of human perception. The respective real experience is enriched by additional virtual information or the opportunity for interaction. A key function in augmented reality is played by cameras which now can be integrated into a wide range of mobile devices to give the user a view on the real world and on multimedia contents on a parallel basis. The user perceives augmented reality via an optical head-mounted display, a smart phone monitor or also special data gloves.

Big Data

With technology progressing, more and more devices are being connected to the Internet. The resulting enormous volume of unstructured data sets is analyzed and assessed using data management platforms – traditional software for data processing cannot cope with the huge data volumes. With the appropriate analysis tools, big data can help companies to optimize their processes, determine trends and address customers in a targeted fashion.

Bits and bytes

Bit and byte are units of measurement for data volume (8 bits = 1 byte). The storage capacity of any medium is given in bytes. Familiar examples include the megabyte and gigabyte storage of hardware such as USB sticks or mobile terminal equipment such as smartphones or tablets. Modern computer hard discs have a storage capacity of several terabytes (1 terabyte = 1,000,000,000,000 bytes). The unit directly above a byte is called a kilobyte, followed by megabyte, gigabyte, terabyte, exabyte, zettabyte and yottabyte - the latter being roughly the size of the World Wide Web.

While storage volumes are expressed in bytes, the transfer rate (speed of data transmission) is given in bits per second. Both figures can represent limiting factors in the processing and analysis of large data volumes (big data). Plastic presentation examples and further information can be found in our article, "Big data: moving towards the yottabyte".

Blockchain (decentralized data structure for financial transactions)

The blockchain principle takes up the growing trend to decentralized data administration and processing. As solar modules on house roofs provide centralized provision of power, the blockchain also operates with a central administrative unit. Literally it is a chain of data blocks in which transactions are linked and examined. On the basis of smart contracts, more complex transactions can also be mapped on the blockchain. For example, smart contracts can facilitate loan agreements without the previously necessary administrative work.

Business Intelligence (BI) (data-based business process analysis)

The term designates IT-based methods and processes for the systematic analysis of digital information to obtain as far as possible comprehensive insights for corporate decisions. For this to happen, data are initially collected in a data warehouse (data storage system for specific data consolidation). Generally the necessary data come from an ERP system. In a second step, those data are set in a relationship to each other. BI provides potential insights on matters such as market development, trends for individual business objects as well as on possible risks and their minimization.

Cloud/Cloud Computing (outsourced data storage)

In principle, cloud computing covers all activities taking place via an online service, e.g. sending e-mails, processing documents via an online platform and saving them there, playing videos or analyzing data. What is meant is an IT infrastructure which makes it possible for data to be saved on decentralized computer systems via internet and in principle to be available at any time at any place as long as there is an internet connection. Thus a cloud provider offers a complete working place in virtual form – computer, memory, platforms and software applications – creating a high degree of flexibility for each user.

Customer Journey Tracking (analysis of user behavior)

The term Customer Journey Tracking designates the data-based analysis of buying decision processes. If the customer buys online, it is possible to reconstruct the decision-making path of the client using special tracking tools. For example, when using the tool it is possible to find out how many advertising contacts were necessary to activate the purchase of a specific product.

Cyber Physical Systems (CPS)

CPS are objects which have embedded software and electronics connected to each other in a system, for example, robots, drones and other movable machines. This way physical and mechanical objects and processes are connected with software-controlled objects and processes – with the real and virtual worlds converging. CPS can be used for traffic control or for managing intelligent electricity networks.

Cyber Physical Production System (CPPS)

If Cyber Physical Systems (CPS) are used in production, then the designation is CPPS. In intelligent production, the CPPS unit controls itself. It can make decisions on the basis of individual parameters - does the relevant function/capacity exist for the requested version of the product? Accordingly the implementing system is controlled by the CPPS, which at the same time monitors production. An example for deployment is avoiding measurement errors, securing uniform quality and streamlining the entire process.

Data Science (knowledge generation from data)

Data Science is an academic field with several components using methodology from mathematics, statistics and information technology for data analysis and interpretation. A Data Scientist thus operates within a broad spectrum of tasks as he not only collects and analyzes data, but is involved in context-related interpretation and can pass on results to a wide range of target groups. Data Science degrees are now being offered, providing training for exactly these combined abilities.

Embedded System

These are computer system embedded in systems or machines where they fulfill precisely defined functions, e.g. the function of an airbag in a car or its navigation system. This type of system is also being integrated into mobile phones, televisions, household devices and forms the basis for the Internet of Things.

Enterprise Resource Planning System (ERP)

An ERP system refers to software solutions with which business processes such as procurement, production, controlling and sales can be managed on a centralized basis. This enables a rapid overview in all company units. For example, it makes it simple to determine when which parts need to be ordered for manufacturing processes. Alongside the overall management, the ERP system contains important data for reporting, as the system contains meaningful data to assess the corporate situation.

Horizontal Integration

This terms denotes networking of companies operating at approximately the same level (for example, manufacturing similar products). Horizontal integration also occurs within one and the same organization. There it relates to hierarchy levels and departments which carry out similar tasks. One of its functions is to achieve optimized material and information flows.

Internet of Things (IoT)

The IoT consists of physical objects which can communicate with each other via internet. The connection is made via integrated microchips which allow a unique identifier of the device in the network. An example: Appropriately equipped printers can order printer cartridges automatically once the ink level reaches a critical value. This communication can be understand using the example of the "smarthome" where several or all household devices are interconnected, the fridge independently reports used food via the smartphone or the user can switch on the heating using the tablet before he comes home.

AI – Artificial Intelligence

The term Artificial Intelligence refers to programs which map human intelligence by deploying cognitive technologies – for example, by speech control or machine learning. AI programs are independent and are based on the recognition of patterns which on the basis of the analysis of behavior and habits allow them to align themselves to the individual users. Artificial Intelligence or "virtual agents" are deployed in objects of daily use (for example, security mechanisms in the car to prevent microsleep). But they are also used in industry, for example, in robots used for process management or production.

Machine to Machine (M2M) (communication between machines)

M2M denotes the largely automated communication between devices, such as machines, automatic machines, vehicles and measuring units. Exchange takes place via internet or mobile phone and is used in medical engineering, facility management or in automated production. M2M is used for remote maintenance and monitoring of machines, the use of automatic machines such as mobile pay terminals or mobile transfer of consumer data. M2M brings together information and communication technology.

Manufacturing Execution System (MES)

MES are production systems which allow production management and control in real time. These systems record and link operating, machine and personnel deployment data and are generally connected to all additional systems of process automation within a corporation. MES operates as a system at operating management level and establishes the link between the corporate management level and the operating level.

OSI Model (Open Systems Interconnection Model)

OSI is a standardized model which describes how different network components communicate with each other. The model divides this communication in seven layers, also called stations. For example, between sender and recipient an e-mail goes through all these standard stations and arrives only if each layer/station fulfills its task. All steps from the sender to the recipient are recorded in a protocol so that the respective layer receives the necessary information on the object (sender/recipient, file properties) and carries out its function accordingly. All links within a process must know the procedure. This is the way the layer model works, irrespective of whether sender and recipient are using different components and software.

Plug & Work

Similar to the more well-known term "plug-and-play", this term denotes solutions from hardware and software that can allow a computer to be combined with other devices without much work in configuration. No additional driver software needs to be installed. This results in uncomplicated work directly after being installed. This requires technical compatability of the modules with each other.

Predictive Analytics/Predictive Maintenance

Predictive Analytics goes one step beyond normal data analysis and uses the results and the knowledge gained from the analysis to make statements about possible events in the future. An example is the Smart Grid (intelligent power grid) which calculates future power requirements and then provides them.
Predictive Maintenance operates in a similar fashion: Using sensors machines and vehicles can transfer operating data and thus allow predictive maintenance.

RAMI 4.0 (Reference Architecture Model Industry 4.0)

RAMI 4.0 is a three-dimensional structural model which presents all levels and participants of Industry 4.0 in a comprehensible manner. In this architecture, processes are divided in smaller packages. There is an axis for the grid-like hierarchy structure within a modern factory, an axis for the architecture structure (functions, processes, data) and a third axis which describes the product life cycle. It is intended that RAMI 4.0 functions on a global basis, identifying and bringing together all developments in the manufacturing industry, securing a standardized exchange of information.

Radio Frequency Identification (RFID) (automatic object identification)

RFID devices are chips which communicate with a reading device using an electromagnet field. Like a barcode or a magnetic strip, the chips contain information which can be obtained using a scanner. This information can also be recorded over large distances. Chips are often used in storage as objects marked in such a way can be localized at any time.

Smart Factory

A Smart Factory is a production facility in which the production processes are optimized automatically and managed via network machines. Individual tools contain – for example using RFID chips – information that can be read by other machines. One of the advantages of Smart Factories is that they can manufacture small lot sizes efficiently or even on a specially customized basis.

Vertical Integration

Vertical integration describes the networking of inter-company departments of the procurement chain (c.f. horizontal integration). It allows simple exchange of information, contributes to greater efficiency in production flows, for example in optimizing the value added and supply chains of the company and operates as a control instance.