Tag: innovation

Industry 4.0 in the food sector

Technology evolves at a rapid pace and organizations must adapt to changes as soon as possible in order to generate sources of competitive advantage. The digitalization of the industry is a revolution that will change (and in fact is already changing) the paradigm of industrial manufacturing, and those organizations that will manage to catch the wave of Industry 4.0 will achieve success in their respective sectors. However, this transformation is not only affecting the secondary or industrial sector, but is also affecting processes in sectors traditionally considered less innovative, such as the primary sector.

In some farms, for example, GPS sensors have been placed to measure the position of the cows allowing also to count the number of steps and their movements. This can be useful to allocate livestock in real time, in case of the farm where the cows are in the open-air field. However, some organizations have gone further and have begun to exploit the data provided by these sensors.

Cow insemination treatments have an important cost for a farmer. They should be done when the cow is in its fertile cycle which comprises a small time slot of about 16 hours every 21 days. To make the things more difficult, each cow has a different cycle, so it can be difficult for a farmer to guess when is the best time to inseminate each cow.

Fujitsu began to collect the data of the movements that make thousands of cows every day and started to process it to see if something could be found. The data volume was very high and could not be processed quickly by a normal computer. Therefore, a set of servers located in what is called the ‘cloud’ with a much higher calculation capacity was used. With this technology Fujitsu developed the program called Gyuho SaaS and discovered a pattern that showed that cows moved much more precisely in their fertile cycle. Thanks to this, it can be predicted more quickly and accurately when a cow is in the fertile period and therefore they can be inseminated with more chances for success, allowing to achieve a success rate from 44% to 90% in insemination treatments.

But that is not all. Apparently, it was discovered that the probability of producing male or female is different depending on whether insemination is done at the beginning or end of the fertile cycle, so the use of this software also helps to increase the probability of getting offspring with the desired gender. In addition, this software also allows monitoring the health status of the livestock or estimating the production that a farm is going to have.

This is only one example of the potential of the big data analysis. This can also be applied to people and not only to cows. Companies have a lot of our data: phone calls, credit card expenses, electricity and water consumption, allocation through mobile phone, etc. With all these data that can be crossed among themselves, we can find that companies know more about us than ourselves.

 

What is the real innovation of Bitcoin?

Bitcoin is a digital currency. Although this may seem like an innovation, the reality is that most conventional currencies today are quasi-digital: euros, dollars, etc. they are de facto digital currencies, since economists estimate that only 8% of the world currency actually exists in cash. The central banks of each country manufacture new currency digitally without having to be printed, in the form of loans with the commercial banks that exist in each country. In fact, some Scandinavian countries are taking some measures to eliminate all cash in the medium term. Therefore, the fact that bitcoin is a digital currency is not a feature that makes it different from other conventional currencies.

The innovative feature of bitcoin is that it is the first type of cryptocurrency. This means that it uses cryptographic mathematical algorithms to secure all transactions, control the creation of additional units of currency and prevent counterfeits. Bitcoin is a fiduciary currency, that is to say that its value is based on trust that its users give it to accept it as a means of payment as it happens with the currencies issued by the central banks of each country. While in conventional currencies users rely on sovereign states to control money production and provide mechanisms to prevent counterfeiting, bitcoin users rely on an asymmetric key cryptographic algorithm. This algorithm is based on a type of mathematics that allows a digital annotation to be easily verifiable, but at the same time practically impossible to reproduce it. In this way, the currency can maintain its value.

One of the great mysticisms of bitcoin is that noone really knows who was or who were its creators. Bitcoin´s underlying technical principles were created by an anonymous person (or group) known as Satoshi Nakamoto. It is believed that Nakamoto began working on this project in 2007 after the outbreak of the financial crisis of 2007 that diminished trust that users had with traditional banks. In January 2009, Nakamoto published in the network the first software to operate with bitcoins, as well as the first units of the cryptocurrency. He also created a website with the domain name bitcoin.org and continued to collaborate with other developers on bitcoin software until mid-2010, delivering control of the source code repository, as well as several related domains to several prominent members of the bitcoin community finalizing his participation in the project. Until shortly before his absence and transfer, Nakamoto made all the modifications to the source code. Due to the excellent English he used in communications and publications, it is suspected that this individual (or group) is not from Japan as the name suggests but possibly from the United States or Europe. His identity to this day remains unknown.

Blockchain is the technology behind bitcoin. It is a distributed database (shared and replicated in multiple computers) that contains a book of annotations with all the movements of the currency grouped in linked blocks so that each block depends on the previous one. Only when the chain is legitimately modified (through the consensus of the majority of system participants), all the computers that form the Blockchain are synchronized in seconds, meaning that if one of the computers disappears or is hacked, no impact is produced. Once registered, information can never be erased, which allows a reliable record of all the transactions that have been made in the history.

The nature of the Blockchain allows bitcoin users to trust each other and make transactions among themselves, eliminating the need for intermediaries (for example, commercial banks, and also central banks and governments). This also brings unprecedented security benefits since the hacker attacks that usually affect large centralized intermediaries such as banks are practically impossible to perform against a multitude of distributed computers that comprise the Blockchain. That is, a hacker who wants to hack a block in the Blockchain, does not only have to hack that specific block, but all the process blocks that go back to the history of that blocked chain. And he would have to do it with the majority of participants in the network, which could be millions at the same time.

Possibly the most interesting feature of bitcoin is the fact that it is decentralized. This means that it is produced collectively by the whole system at a speed that is defined when the system is created and that is publicly known and that decreases with time reaching a future point in which it will stop creating new currency. This implies that with unlike conventional currencies, governments cannot produce new currency by emulating the behaviour of precious metals.

This whole system is maintained by a community of different parties that do not need to trust among themselves called miners: members of the general public who use their computers to help validate and seal transactions by adding them to the transaction book following a particular time schedule. The security of cryptographically validated accounting books is based on the assumption that most of the miners are honestly trying to keep the transaction book, also having financial incentives to do it which we will see later.

A very desirable feature for a mean to be used as currency is that it is easy to verify, but difficult to counterfeit. While the protection mechanisms in physical currencies are based on holograms, multicoloured banknotes, microprints, watermarks and inks whose colours change depending on the angle of light, bitcoin relies on strange unidirectional mathematical algorithms that allow to verify easily that a mathematical operation is correct through a public key, but does not reproduce the mathematical operation unless you have the private key.

Bitcoins just like physical coins can be lost. If the private key is lost, it cannot be recovered in any way. However, we can make several backup copies of our private keys to prevent such loss. Bitcoins like another currency can also be stolen. This could happen if someone gets our private key.

The new bitcoins are generated by a competitive and decentralized process and used to reward miners for their system support services. When more miners are, it is more difficult to obtain benefits, so the protocol ensures that the number of bitcoins that are going to be created in a certain period does not depend on the number of miners. This is currently the most common way of rewarding community members who hold bitcoin. The other way is optional and consists of charging a small fee in each transfer in exchange for prioritizing the registration of the transaction in the network. Given that the number of bitcoins established in the protocol is finite and the rate of creation of currency is decreasing over time, it will reach a point in the future where the only rewards will be the fees.

Currently the price of bitcoin is very volatile and subject to very high levels of speculation, which hinders its stabilization as currency of current use, having a very long-term upward trend. There are three main types of conditions that have an impact on its value. The first condition is governmental regulations, such as the decisions of governments to prohibit or encourage its use. Japan’s decision in April 2017 to legalize the use of bitcoins as a means of payment or the prohibition in China in September 2016 of the use of ICO (initial coin offering) calls have caused significant fluctuations in bitcoin´s value.

The second condition is the adoption and increase in the size of the market where this currency is accepted. The more merchants accept this means of payment, the value increases.

Finally, the third condition is the use in illegal activities since bitcoin allows a certain degree of anonymity. When the FBI closed the website The Silk Road, a virtual market where drugs could be bought by accepting only bitcoins as a means of payment, this caused a drop in the value of the currency (although it was temporary since this same fact made the popularity of the cryptocurrency increase subsequently increasing its price exponentially).

The final interesting point is the fact that bitcoin has opened the possibility of creating centralized cryptocurrencies. This means using cryptography to guarantee protection mechanisms against counterfeiting, but still the creation of new currency is controlled by a centralized agency (for example, Central Bank) allowing states to continue regulating the economy through monetary policies.

In this case, the maintenance of the transaction book is done in a set of computers supervised by the central bank instead of a distributed network. Compared to decentralized cryptocurrencies, it could provide better control against illegal activities and tax evasion, but also less anonymity. This can provide more confidence and supervision as the currency is secured by an important banking authority, although there remain doubts as to who controls this authority.

What is in reality Industry 4.0?

The essence of every industrial revolution is to increase productivity. Three previous industrial revolutions were triggered by technical innovations: utilization of water- and steam-powered mechanical manufacturing which took place at the end of the 18th century and allowed organizations to gain higher productivity, introduction of mass-production techniques by using electrical energy at the beginning of the 20th century and the shift from analogue to digital technology in the 1970s. Now, though, we are in the middle of the fourth wave of the technological advancements. The fourth industrial revolution is going to have more extensive impact triggered by Internet and allowing communication between humans and machines in Cyber-Physical-Systems (CPS) throughout large networks. Industry 4.0 will make it possible to collect and analyze different data across machines, allowing faster, more efficient and more flexible processes to manufacture goods of higher quality at reduced cost.

The term “Industry 4.0” describes the expected digitalization of industrial value chains with the idea of using emergent technologies to implement internet of things (IoT) and services in order different engineering and business processes being integrated allow production to operate in an efficient and flexible way with low costs and high quality.

The main aspects addressed by Industry 4.0 are the following:

  1. The IT-enabled mass customization of manufacturing products, meaning that production should be adapted to the needs of the individuals.
  2. Production chain’s adaptation in a flexible and automatic way to the requirements of the rapidly changing environment.
  3. Tracking and self-awareness of different parts and products and their mutual communication with other products and machines.
  4. Advanced human machine interaction paradigms, which includes new radical ways to interact and operate in the factories.
  5. Production optimization thanks to Internet of Things enabled communication in the Smart Factories.
  6. Appearance of completely new business models which will contribute to the radically new ways of interaction in the value chain.

Technological advancements on which Industry 4.0 relies, can be summarized into nine following concepts: autonomous robots, the cloud, industrial Internet of Things, big data, cybersecurity, simulation, additive manufacturing, horizontal and vertical system integration and the augmented reality.

Autonomous robots

Even though manufacturers have been using robots for complex assignments for a long time, robots and their capabilities are evolving dramatically. They become more flexible and autonomous and eventually will interact with one another and work side by side with humans.

The cloud

Within Industry 4.0 more organizations will start using cloud-based software allowing them to store and share data across organizational boundaries.

 

Industrial Internet of Things


The Internet of Things comprises of enriching different devices with embedded computing and connecting them using standard technologies. This allows different devices to communicate and interact both with one another and with more centralized controllers.


Big da
ta

In the environment dominated by Internet of things and Internet of services, new technologies will generate a huge amount of data. The internet of data will allow mass data transfer and storage as well as provide new and innovative analysis methods for mass data interpretation in the context of target application.


Cyber
security

CPS equipped with internet technology require reliable concepts and technologies to make sure that safety, privacy, security and knowledge protection are taking place. Therefore, reliable and secure communications together with sophisticated identity and access management of machines and users are crucial.


Si
mulation

Even though 3-D simulations are being used in the engineering phases nowadays, such simulations will also become widely used in plant operations in the future. They will use real-time data to mirror physical world in a virtual model, including products, machines and humans. As a consequence, the quality of products will increase dramatically.


Add
itive manufacturing

With the arrival of Industry 4.0 additive-manufacturing methods (e.g., 3-D printing) will become widely used to produce small batches of customized products offering different construction advantages, among those lightweight and complex designs. Such systems will also decrease stock on hand and transport distances.


Hor
izontal and vertical system integration

The horizontal integration means cross-organizational and organizational-internal intelligent cross-linking and digitalization along the value chain of the life-cycle of the product and among value chains of adjoining life-cycles of the products. Vertical integration is seen as the intelligent cross-linking and digitalization of different hierarchical levels of the value creation module.


Augm
ented reality

The organizations of the future will widely use augmented reality to provide employees with real-time information allowing better decision-making and improvement of work procedures.

In summary, Industry 4.0 tries to deal with personalized needs and global challenges in order to achieve competitive strength in the globalized markets. It has also a huge world-wide impact mostly concentrated in 4 areas: revenue growth, productivity, investment and employment. In general, Industry 4.0 is thought to have a great impact which is not limited to the industry itself but to the way the humanity works and rests.

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