In recent years, the term, “Connected Factory” has become a buzzword of the manufacturing industry, but what exactly does “Connected” mean? It is one thing to say that everything is connected in a factory, but depending on whether the different machines within the factory are able to efficiently communicate with one another, or whether the factory workers are connected to these machines, or the data within and outside the factory is connected, or the different systems across multiple factories are connected, the system and technological requirements to achieve each of these goals can be very different.

Professor Dr. Yashiyuki Nishioka, President of the Industrial Value Chain Initiative (IVI), has proposed four layers of connected factories, which are: Elemental Devices (Level 1), Equipment/Controllers (Level 2), Manufacturing Field (Level 3), and Enterprise Resource Planning (Level 4). According to Professor Dr. Nishioka, Level 1 refers to the actuators and sensors. Level 2 refers to the equipment and controllers that control these Level 1 tools. Level 3 refers to the Manufacturing Execution System, which manages the production line and the factory as a whole. And finally, Level 4 is the layer that governs the overall management of the company, including Enterprise Resource Planning.

Being “Connected” at Levels 1 and 2 means connecting the different tools and equipment within a factory. The controllers firstly receive signals from sensors, then they process them and finally they send signals to the actuators to actually operate the machines and equipment. Here, the actuators and sensors are connected to the controllers.

Different formats of communication are used for sending data between sensors/actuators and controllers. In Japan, Factory Automation (FA) equipment manufacturers develop a standard for their own devices, and then they normally promote their standard by establishing a Standardization Organization with other manufacturers. The policy of the organization in relation to how they try to popularize their standard is quite important, and whether the standard is kept open or not also depends on the organization.

Traditionally, open standards are not common in Japan. For many users, the stability of a system as well as the speedy support from a Factory Automation manufacturer in the case of an emergency are more important than having greater flexibility. If one uses the products made by one FA manufacturer in Japan, one receives this kind of support, and, in this case, open standards are not necessary. This is also advantageous for the FA manufacturer as they can enjoy a close tie with a factory and such a virtual monopoly means that they don’t need to worry about the risk of losing business to potential competitors. Thus, Japanese FA manufacturers have a mutual interest to continue this practice as it has not only helped to improve and create more sophisticated technological capabilities, but has also contributed to the development of Japan’s manufacturing.

Nowadays, however, the limitations of such practice are becoming increasingly apparent. One of the clear reasons for such limitations is the advances in technological capabilities on a global level. Open standards are mainstream in the U.S. and the EU, and manufacturers are using a variety of open standards to develop their products. This competition has led to the emergence of companies with a particular strength in one area – the sensors of company A are exceptional; company B makes very good controllers and so on. This, of course, has cost implications. If a factory fully depends on one FA manufacturer for the entire system of the factory, their leverage when they request cost reduction to that manufacturer will be limited. As price competition gets increasingly severe, such a factory will be in a very disadvantageous position. In addition, as certain standards being used by Japanese FA manufacturers do not conform to international standards, it has become a serious issue whenever production shifts from Japan to overseas.

In this backdrop, in April 2016 Toyota Motor Corporation announced that it had adopted the open protocol, “EtherCAT*1” and has also encouraged global suppliers to use it. Prior to this announcement, Toyota used FL-net, a standard established by the Japan Electrical Manufacturers’ Association that is mainly used by Japanese manufacturers. Using FL-net instead of the globally used EitherCAT means that you need to select products made by mostly Japanese manufacturers. Toyota, therefore, decided to use EtherCAT to maximize production efficiency as well as to introduce IoT.

“Edge computing*2” is also attracting much attention to achieve connected factories. In November 2017, Mitsubishi Electric, NEC, IBM Japan, Oracle Corporation Japan, Omron and Advantech announced that they would be coordinators of the newly established EDGECROSS CONSORTIUM. Edgecross is an open edge computing software platform to achieve greater connection between FA and IT to revitalize manufacturing. The CONSORTIUM was established to promote the platform and to foster cooperation aimed at developing its specification. Hitachi joined the coordinating team on March 1, 2018. Participating companies go beyond the company’s and sector’s barriers and provide an open platform built on their own strengths as well as work together to establish a solid foundation of IoT toward the realization of connected factories.

This is just one example of how Japan has started to catch up with the U.S. and EU in this area and advance the level of connectedness across different layers.

*1 EtherCAT: One of the industrial open field network standards compatible with Ethernet. EtherCAT was developed by Beckhoff Automation GmbH, a German provider of PC-based FA control solutions.


*2 Edge computing: Edge computing is a distributing paradigm, which brings computation and data storage closer to the location where it’s needed, to improve response times and save bandwidth. It reduces the communication delay by moving the computing process to a local place such as an edge server instead of saving all the data in the cloud. Edge computing speeds up internet devices and web applications and is expected to have a positive impact in the areas of real-time service and big data, among others.