Week in Review

The power of an internet-connected screwdriver

Bernard Hickey visited E-Go’s electric car factory in Aachen, Germany to find how it used a 5G network to flip car-making on its head, and how it’s an example of what Industry 4.0 could look like in New Zealand.

I’ve never seen anyone quite so excited about a screwdriver as Olaf Wendt.

But this screwdriver is special in a way that hints at how 5G could transform manufacturing, construction and many of our ‘physical’ industries in ways most would not expect of online technologies.

“You don’t have to fill in any paperwork. It just fills in automatically,” says Wendt, who is E.GO’s Marketing Manager and co-founder.

“That’s because this screwdriver is connected to the internet,” he says as he points out how one worker is wielding it in E.GO’s eerily quiet factory in Aachen, Germany.

Wendt’s enthusiasm helps explain how the new E.GO electric car factory was able to operate much more efficiently, cheaply and with less capital than a regular car plant.

Normally, a car worker would have to test how tightly a screw was screwed in with a separate tool, and then manually record the strength of the connection or ‘torque’ in newton metres (NM) on a clipboard. That information would then have to be put into a database carefully to ensure it matched up with the particular part used in a particular car. Tracking those parts, measuring their quality and being able to pinpoint and then tweak the weak points in any production process and product is crucial. Finetuning that process with pen, paper and guesswork from the executive suite can take months, if not years. It’s much easier when AI can pick out the ‘exception reports’ from a weak batch of parts or a slow worker or a process bottleneck by analysing its ‘Big Data’ in a real-time way.

But at E.GO’s Aachen plant there’s no need for all this paperwork and subsequent guesswork when the screwdriver has a torque sensor and is connected to the factory’s ‘brain’ by a real-time network. The screwdriver tightens the screw to the required 70 NM, quietly sends that information to the database and the worker can quickly move on to the next task.

I didn’t see many pens behind ears or in top pockets at E.GO’s Aachen factory.

Flipping the car factory on its head

E.GO is a start-up making four-seat electric-only ‘Life’ cars for a cost of €16,000 to €20,000 (NZ$27,000 to NZ$34,000). They sell for €12,000 to €16,000 after subsidies from the Government and the company. That is about a third of the cost of an equivalent BMW i3 and half of the cost of a Renault Zoe. The ‘Life’ is not available here yet and has only just gone on sale in Germany, but E.GO’s car is also half the cost of a new Nissan Leaf here in New Zealand.

E.GO has been able to dramatically transform the manufacturing costs by completely rethinking how a car is made, and it could do that because it designed the car to be low cost with a so-called ‘Industry 4.0’ factory in mind.

Industry 4.0 is a term invented in Germany in 2011 and refers to the growing use in factories of a combination of Big Data-driven Artificial Intelligence, the use of sensors connected to an Internet of Things, and the use of robotic processes and machine learning. This era is seen as the successor to the first three industrial revolutions: steam-driven factories and transport (1780-1850), mass production in mechanised and electrically-powered factories (1870 to 1920) and then the computerisation of factories and supply chains (1970-2010).

Also called ‘smart factories’, there’s a lot more information on how the Industry 4.0 movement is progressing in New Zealand via Callaghan Innovation’s Industry 4.0 Hub. MBIE’s “Beyond commodities: manufacturing into the future” report from last year also highlighted opportunities to improve productivity, wealth and wages through use of smart factories. Gallagher Group, RocketLab, Air New Zealand and Tait Electronics are leading proponents of using smart factories.

As I wrote in the first of this series (How 5G could unleash a productivity quantum leap) New Zealand’s productivity has badly lagged that of other industrialised nations in the last decade and the advent of 5G, which is a vital component in the use of AI, machine learning, the Internet of Things and Industry 4.0, is an opportunity for a quantum leap.

There is a particular opportunity for small to medium enterprises (SMEs) because Industry 4.0 is as much about being nimble with very efficient use of capital, rather than weaponising massive scale to achieve a competitive advantage globally.

The ‘Lego’ vs bespoke approach

E.GO is a perfect example of how a very small operation without much capital in a capital-intensive industry can use a smart network to create a product designed to be dramatically more competitive than its rivals.

Wendt explained how E.GO essentially used a Lego-like approach to compiling parts made by others in a low-cost factory to come up with an electric car at half the usual cost. The ‘Life’ was essentially designed to a cost target by flipping the usual automotive design and manufacturing process on its head. It could only do that with a smart 5G network integrated into its production lines.

The ‘Life’ is made up of Peugeot steering gear, a Bosch powertrain and standard Heller headlights that cost €100 each. All that meant E.GO didn’t have to spend hundreds of millions of euros designing components and building special machines to press sheets of steel into the exact shape of the car. Instead, the E.GO used a simple space frame overlaid with coloured plastic polypropolene with only five colours. That meant E.GO didn’t have to spend €300 million building bespoke metal press machines and €1 billion for a massive new factory requiring annual throughput of 100,000 cars to be viable.

Instead, E.GO spent €35 million on its factory/warehouse the size of a football field and aims to produce up to 30,000 cars a year. It has been able to do that by using a dedicated 5G ‘sliced’ network to set up its factory to track each individual component, production process, staff member and the quality and specifications of each vehicle.

It is able to tweak and adjust the process on the run thanks to the interconnectedness of the devices, the parts, the cars and the staff. Wendt describes how this was only possible with the always-on and low latency nature of the 5G network provided by Vodafone at Aachen, and the special base station set up by Ericsson with 36 antennae in a Massive MIMO configuration. To find out more about how 5G works and what a Massive MIMO antennae is, see the 2nd article in this series (5G: Atomic clocks, beaming Massive MIMOs and sliced networks)

Construction too?

The poorest performing part of the New Zealand economy in the last decade has been construction, which has been slow to adopt Building Information Management (BIM) systems for digitizing the construction process and Computer Assisted Design for buildings.

Using AI and machine learning in tandem with sensors on building materials and RFID tagging could revolutionise how buildings and houses are built, or even how a building site or landscape is engineered.

Vodafone’s 5G lab in Dusseldorf showed how autonomous diggers using 3D models of the landscape could carve out the required holes in the right places, regardless of whether the right trained staff had or had not failed their drug test. All it required was the right sensors, the right software, the right robotic digger and a reliable 5G network.

Just as E.GO halved the cost of electric car building, perhaps a new company or sets of small companies could use new off-the-shelf technologies to come up with cheaper housing and infrastructure that is built from the start with an Internet of Things approach that allows the creation of more efficient and low-carbon emitting transport and electricity.

At the moment, the belief is that only the largest companies with the biggest balance sheets and training budgets can afford or are able to roll out what seem like complex, but prohibitively expensive, integrated workflow management, fleet tracking and GPS monitoring systems.

But as E.GO showed, it may well be the SMEs of New Zealand that most quickly do their own Lego-style pulling together of off-the-shelf software and hardware in a much more nimble and responsive way than the big guys. After all, both large and small companies will have access to the power of the same network. Deep piles of capital and specialist expertise are not as crucial as they once were.

Are you Kodak or Instagram?

Just as Instagram and Uber and Airbnb have disrupted the once very physical businesses of photography, taxis and hotels, 5G has the potential to create new brands and business models that create exponential value for some, and put others out of business. Who would have thought, for example, that small and capital-starved retailers and tradies would have access within just a few years to the most sophisticated business accounting software (Xero and MYOB) or Point of Sale/Scheduling software (Vend or Timely) for a monthly fee.

The question is whether businesses and organisations choose to use 5G to create these new models, or can put together these new models and tools to create their own brand new businesses.

Who will be the Kodak or Blockbuster or Blackberry of the 5G era? And who will be the IBM or Nokia or Apple of the 5G Era?

* Bernard Hickey traveled to Dusseldorf and Milan to visit Vodafone’s 5G labs and Nokia R&D centres courtesy of Vodafone, which is a foundation sponsor of Newsroom.

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